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By now, everyone has heard of lender loan workouts. Very few however, know anything about how to negotiate them successfully. Many struggling homeowners have tried to contact lenders on their own, to be strung along for months without end, only to be told nothing can be done. Many have opted to take on the services of professional loss mitigation agencies to negotiate their loans, but they are often not informed of the loan modification timeline and how it works. Before entering into an agreement with any loss mitigation agency, you will want to have realistic expectations of the entire process. I am writing this short article to let the general public know what to expect, before relying on a strange 3rd party to save their homes. If anyone you know has concerns about using a loan modification agency, please feel free to pass this information along. I cannot speak for any other firms, but here's what you can expect from my agency, from the moment we first speak on the phone:
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Understanding the Loss Mitigation Timeline
Loan Modification Demystified
 INTERVIEW - DAY 1
During our first conversation, I'll ask you to tell me about your situation. It is important that you explain everything that has led to your mortgage problem and why you are now seeking advice. Based on the information you share with me, I'll make an initial assessment of the possible resolutions with your lender(s). If it sounds like we may have a case, I will ask you to complete a short financial information form, detailing everything regarding your mortgage, credit and personal budget, as well as the amount of money you take home monthly. Ideally, we are looking to prove your financial hardship, while at the same time, prove that this hardship will be cured if the lender agrees to make changes to your loan.
ASSESSMENT - DAY 3
Once you email me the completed financial form, I will immediately schedule a time for us to speak again. The goal of our 2nd conversation is for you to clarify the information you've provided and for me to give you my honest opinion of possible outcomes to a mitigation. If we mutually agree that there is real possibility for relief, I will then discuss your scenario with my agency to determine if we can accept your case. [The reason why I must first pre-qualify your case with my team, is because the agency offers a guarantee of resolution. If a favorable resolution is not likely or we are not confident we can negotiate a beneficial result, then unfortunately we will not be able to represent you. However, if it is determined that there is a real possibility for financial relief, then we'll accept you as a client and move things forward swiftly.]
CONTRACT & AUTHORIZATION - DAY 5
After we have agreed to take you on as a client, I will forward a soft copy of our "Work & Trust Agreement" along with a 3rd party authorization to negotiate with the lender on your behalf. You will want to carefully review these documents and inquire with me on any clarifying questions.
CASE SUPPORT - DAY 7 to 14
Over the following week, I'll be in constant contact with you to collect the required support documentation to substantiate your case. Our negotiations are backed by hard documented evidence of the reasons why your lender(s) should provide relief and do it quickly. Until all of the necessary documentation is successfully received and verified, we cannot engage your lender(s). Requested items include but are not limited to: tax returns, bank statements, credit card and utility bills, W2s, payroll stubs, property tax statements, lease agreements (if any), and a letter of hardship.
CASE PREPARATION - DAY 14 to 21
Once you've successfully faxed all of the required case support, my agency will work diligently to prepare your case for submission to the lender. This stage typically takes 5-7 business days to complete. If any inconsistencies or inaccuracies arise during case preparation, you will be informed immediately.
CASE SUBMISSION - DAY 21
Know that your case may be submitted to various governmental relief agencies, your lender(s), as well as the ultimate insurer of your loan (i.e. FHA, Fannie Mae, Freddie Mac) in order to get you the best possible relief. Once your package is verified as received by your lender(s), there will be a waiting period for your loan to be assigned to a negotiator on their side. It is important to know that lenders do have their own way of prioritizing loss mitigation cases for review. *Some lenders now have an automated underwriting process for this. The waiting period will depend on the severity of your situation and the way your specific lender(s) prioritize your case.
NEGOTIATION - DAY 21 to 60
After your case has been assigned, negotiations will take place and hopefully a beneficial resolution will be reached. I say hopefully, only because no matter how strongly we negotiate your case, the lender can always resolve to do nothing. Be cautious of a loss mitigation agency that is overly optimistic to win your business. The lender has the ultimate decision making authority to accept a short payoff or modify your loan, and presently there are no laws that require them to do so -unless ordered by a judge in bankruptcy court. With that said, lenders have much more to lose in this housing market when they opt for foreclosure, so they will only exercise that option after evaluating all other remedies. Today, lenders will suffer tremendously if they refuse to modify loans where it makes better business sense to work something out. These are the cases that we accept.
TERMS - DAY 30 to 60
Depending on how quickly your case is assigned and negotiated, you may be waiting 30-60 days on average, before modification terms will be reached. If the terms are deemed as fair, I will then connect with you to discuss the details of their offer.
RE-NEGOTIATION - DAY 60 to 90
If the terms are determined as unfair, and we feel we can obtain more beneficial terms from the lender, your case will enter a RE-negotiation phase. *By the time I contact you with modification terms, we shall have arrived at the best possible result the lender would accept.
MODIFICATION AGREEMENT - DAY 60 to 90
Due to the overwhelming requests for loan modification, the entire loss mitigation process typically takes at least 2-3 months for terms. If all is agreeable, you will then sign the final loan modification agreement as drawn up by your lender and make future payments as agreed. Depending on our negotiation strategy, other remedies can also be reached. For example, if a short refinance was in negotiation, you will then payoff your existing lender with a new FHA loan. If a short sale was in negotiation, you can begin to submit buyer offers for the lender to consider. *It remains your right to turn down any loss mitigation offer from your lender, so long as you are willing to accept the consequences of reverting to your original loan terms or ultimately losing your home.
During the loss mitigation process, understand that your lender may attempt to contact you directly. Only a bankruptcy court can temporarily stop foreclosure proceedings or cease calls from their collections department. It is important that you continue to take their calls, but make sure to relay any communications to me. However, it is important to defer any loan negotiations to our agency, as to avoid confusion and potential conflicts with your case. Hopefully this helps make the loss mitigation process a bit more clear, and you now have greater confidence to face your lender. Please feel free to call me about your situation and find out your options.
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Why work with Randy?
My expertise comes from years of providing financial and mortgage advice. When you enter into negotiations with your lender, you want representation by an expert who truly understands the industry - not someone who simply sees opportunity to earn profits. When pre-qualifying for a loan workout, it is essential to work with a true professional who can assess your present situation and offer real solutions. Otherwise you might just get the runaround, and there is very little time to act when your lender is demanding full payment. Please, there is absolutely no cost for a preliminary phone consultation and no obligation to use my services. And unlike dealing with your mortgage company, at least you already know my real name. I look forward to making things better for you and your family. -Randy Miguel
Flat Fee: $2200 in advance, deposited into my broker trust account. No funds will be disbursed until a resolution is obtained from your lender. I guarantee a resolution within 120 days or your advance fee will be returned in full.
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