Job loss, Foreclosure, Depression... or just bad timing, let's face it, these are difficult times. This article is intended to share my 15 years of real estate experience and to help enlighten my readers on how to save your home, protect your credit and fend off the fraudulent foreclosure scam artists. If you are in foreclosure, or like 5 million other Americans headed in that direction, then we have a lot of work to do. A 'Default Notice' from your lender is not the end-it can also be a new beginning.
A woman in Pennsylvania recently contacted me after reading my book on foreclosure. Her husband had died and in that dreadful week their mortgage interest rate increased to 7.25% or by $300 per month. Mrs. Phillip was panic stricken realizing that she had not just lost a husband of 45 years, but also his retirement income of $1,880.00 per month ... the money that was making those mortgage payments.
Her husband had 3 kidney transplants in 30 years, heart bypass, hip replacement and a knee replacement. He was surely the authentic "bionic-man." The final surgery to stop internal bleeding took his life. The $75,000 home equity loan was being used to pay for medications above and beyond Medicare and any insurance the couple had. This additional loan posed another problem that I had to resolved.
Their charming Tutor-style home in Western Pennsylvania was worth about $220,000, but with the current mortgage of $300,000 and the equity line, this widow was terribly "up-side-down" at this point in time with little to no prospect of selling the property in this ugly real estate economy. My first question to this widow was: "Do you want to stay in the house?" She did, and she could not imagine walking away from all of those memories, or worse, facing foreclosure.
"Loan Modification" is a rather unknown term to many homeowners; it is a phrase that with this growing financial crisis will become used and abused in the immediate future. With a letter from this homeowner granting me access to her mortgage records I was permitted to step in to resolve the widow's crisis. I negotiated both of her loans with each of her lenders and was able to "modify" her first variable interest rate mortgage from 7.25% down to a fixed 4.78% thereby reducing her monthly payments to enable her to keep her home and live within her own retirement income.
But that left an unresolved equity loan with CitiBank for $75,000. Like too many lenders these days, CitiBank simply ignored my correspondence and telephone calls for nearly 60 days. I don't like being ignored, especially by a $10.00 per hour paper-pusher that was playing God with this widow's life, so, I went into action and wrote a letter utilizing a number of tricks under my hat including offering CitiBank $0.30 cents on the dollar and admonished the lender for ignoring the plight of a woman who just lost her husband through medical circumstances. A copy of that letter to the CEO of CitiBank and to several media outlets in the vicinity of the lender's corporate office. Within a week a Loan Mitigation officer was calling me three times a day wanting to settle.
This process took numerous letters, the widow's previous tax return which they seemed to have "misplaced," dozens of telephone calls and yes, stubborn tenacity on my part. After agreeing to the settlement I had negotiated, I prepared to wire the money from the widow's bank account into the CitiMortgage account which failed three times because the incompetent $10 per hour employee gave me the wrong bank transfer numbers, to a state where the lender did not have a branch. But that is another story.
The end of this story is that my widow gets to stay in her home and cherish happier memories of her husband and their life together. Nothing is impossible in today's mortgage crisis... just keep in mind these lenders cannot afford to take back these properties and it costs them $30,000 to $60,000 to foreclose. In order for them to accept federal funds they are compelled to sell one repossessed property for each 5 new loans they create. The name of the game therefore is to get to a loan mitigation officer who can make decisions. Stop talking to telephone receptionists or $10 per hour paper-pushers.
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