Scott: Today, we’re going to talk about loan modifications. Loan modifications is essentially if you fall behind on your mortgage or it’s foreseeable that you’re going to fall behind on your mortgage, then you’re looking for your mortgage company to give you some help you renegotiate terms and repayment of your loan. This has really come up in the last five years especially, with the downturn of the economy. A lot of people have lost their jobs, have changed careers. Even with the same job, they actually have had reduced hours. It’s caused them hardship to be able to maintain their mortgage payments.
With this, obviously, there are a lot of loan modification companies out there. There are attorneys out there that perform loan modification services. Like everything else, unfortunately, there are some people out there that perform these services, that all they do is take your money. At the end of the day, you’re out of your money and you wind up losing your house.
What we’d like to talk to you about today is that you can get a loan modification absolutely free of charge. Where do you find that?
Alex: So confusing! Get to the point.
Scott: Okay, I’m getting to it.
Alex: Wrap it up. Let’s go.
Scott: First off, the best place is to approach your bank or mortgage company that has your mortgage loan. When you call up for the first time, you’ll probably get their customer service department. They call them a number of different names, but what you’re looking for is the loan modification department. They may call it the loan modification department, they may call it the …
Alex: Sexy shoe department.
Scott: Um, no.
Alex: Okay. Loan modification department.
Scott: Loan modification department, the workout department, hardship department.
Alex: Hardship pepperoni department.
Scott: No pizza here. Loan modification, workout … Some will call it the short sale department, hardship department.
Scott: HAFA department? They call it all kinds of different things.
Scott: Be very specific. Say look, I need to talk to the department that’s going to help me with my mortgage, making my mortgage payments. If they can’t figure that out, then … You never open an umbrella inside a room! What are you doing?
Okay. Anyway, you want to contact one of these departments. Most of them will have a package you’ll have to complete, which essentially will be a budget, a hardship … You’ll have to supply some documentation, like your tax return, your payslips, almost like you’re getting the loan all over again. You do have to explain what’s going on and give them a plan or show that you have enough information where you can move actually forward and have a reasonable expectation of repaying the loan under negotiated terms.
For some reason, if you feel that you cannot move forward or you don’t feel comfortable talking or dealing with the bank directly, you can still get help for free. You can get that from a HUD-approved housing counseling agency. A HUD housing counseling agency is forbidden to charge you any fees associated with assisting you with getting help with your loan modification.
Alex: Wow, no fees. Nothing.
Alex: So, how do they get paid? By the government?
Scott: They get paid by the government. That’s right.
Alex: By the government?
Scott: That’s right.
Alex: Ah. Thank you government.
Scott: Yeah. Don’t worry. You’re paying the government to pay them, so you’re good.
Alex: Oh, f**k you government.
Scott: So, you’re paying it.
In any event, a HUD housing counseling agency cannot charge you any fees for doing a loan modification. The easiest place probably to find these people is actually a government website called MakingHomeAffordable.gov. When you get to that website, there’ll be a link on the top that says find a housing counselor.
Alex: Oh God.
Scott: Are you okay? We’re almost done. Come on. Chirp up! I’ll take you out for drinks later.
Alex: All right. Let’s go. All right, so, the government pays all the stuff, what’s up, what’s up, what’s up …
Scott: That’s right, the government … Well, they don’t pay all the stuff. They pay the HUD housing counseling agency.
Alex: I pay for these f**kholes to mess up their credit and …
Scott: You pay the government, the government pays them. Yes.
Alex: And then the HUD comes along like little angels in their angel hats …
Scott: Something like that.
Alex: Yeah. Then what?
Scott: These HUD housing counseling agencies will help the homeowner put their package together to get it submitted to the bank, and, hopefully, if everything goes well and everything is prepared properly, they will get a loan modification.
Alex: Yea! We all win.
Scott: We all win. And what happens with the loan modification? It will do one of a few things. It will reduce the interest rate that’s charged on the mortgage. They may extend the term, which will lower the payment. They may write off part.
Stay with me now. We’re almost done.
Alex: I’m going to kill myself. So hard …
Scott: They may write off part of the mortgage balance or they may do a combination of all three to get to some sort of plan to get the mortgage paid in a reasonable period of time.
Alex: That’s a wrap.
Scott: Need some help?
Alex: Oh Lord, Jesus! There’s gonna be a (bleep).
Scott: With that said, in summary: Number one: Never, ever, ever, ever pay anybody for a loan modification.
Alex: They’re robbing you.
Scott: They are. They actually are robbing you.
Number two: Contact your mortgage company directly. Speak with them. Ask for the loan modification department.
Alex: Can’t be happy all the time.
Scott: Get in contact with them and look for a hardship package to work on a loan modification. If you feel uncomfortable talking to the mortgage company or the bank directly-
Alex: They could call you.
Scott: Well, they do call you when you don’t make mortgage payments.
Alex: No, they’ll call you directly, like to your cell. You’ll help them out.
Scott: I will. I will. I will. However, lastly: If you feel uncomfortable doing it yourself, you can talk to a HUD housing counseling agency and remember you can find a HUD approved housing counselor at MakingHomeAffordable.gov.
Alex: I got a new shampoo that I used. Do you smell it?
Scott: I do, but can I finish, just so we can go.
Alex: Sure, yeah.
Scott: Are you ready to go?
Alex: Yeah, yeah, yeah.
Scott: With that, you’ve got the tipster. For DCC Financial Freedom Community, I’m Scott Tennell.
Alex: And I’m (bleep).
Scott: Good Lord.