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Loan Modification Outlet offers mortgage modification relief for homeowners that are struggling with an adjustable rate mortgage or an employment issue that caused a loss of income. LMO offer loss mitigation solutions with low rate loan modifications that stop foreclosure!

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February 2009
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I received another inquiry about a mortgage relief through a law firm.  A loan workout is a negotiation with your attorney and lender with the goal of modifying your mortgage terms to something you can afford.  The process is very strategic and requires a significant amount of legal maneuvering to achieve the best results for you.  The attorney that represents you means “everything” to your case.  That is why you should feel comfortable working with a law firm to negotiate a reduced payment achieved through a loan modification.

Loan Modification Tips from Jeff Morris on Negotiating with Mortgage Lenders


There are 4 primary reasons why most people like working with an attorney-backed loan modification company versus a mortgage broker or individual. 


1.    First, make sure the law firm is an AV rated law firm which means it’s ranked the highest in the nation – sort of like a Johnny Cochrane style law firm. 


2.    Secondly, the lead attorney should be ranked in the top 1% in the state of California – which puts him ahead of 99% of the rest of the attorneys statewide. 


3.    Thirdly, choose a law firm that will allows you to break up your payments into 3 or 4 low payments.  This helps significantly when a person is in a financial bind. 


4.    Lastly, 95% of your calls are coming from pop up loan modification companies.  You should contract work from one of the most well respected law firms in all of California that was doing business prior to the turn of the century.


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Harry Smith spoke with Ray Martin about how President Obama’s new mortgage plan will help homeowners in various states of foreclosure. 


Watch Federal Foreclosure Options for Struggling Homeowners


Ray Martin considers the two main foreclosure prevention options:

1. Loan Modification

2. Mortgage Refinance

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Most home financing experts like Jason Cardiff believe that “we have not hit the bottom of the market and lending companies have lost so much that they can’t afford to repossess more homes in this foreclosure crisis.

Mortgage executive Scott Hess sat down with Loan Modification Buzz recently and discussed the mortgage relief movement by lenders who simply do not want to take over more properties from foreclosure. Hess said, “Many properties in California owe significantly more than their home could be sold for.”

Watch Video of Loan Modification Buzz Interview with Scott Hess

More than 12% of homeowners in one Solano County ZIP code are more than 90 days late making their mortgage payments, according to an online data base.

According to the First American CoreLogic database, as of November, the 94589 ZIP code -- the part of Vallejo north of Redwood Street and West of Interstate 80 -- had the area’s highest rate of late payments, at 12.48%. That’s about three times the previous year’s rate. Homeowners in this region of California have been targeted for loan modification plans by many of the mortgage lenders that funded most of the mortgage loans between 2005 and 2006.

First American CoreLogic is a firm that collects national, state and local real estate sales-related data. Homeowners in the 94533 ZIP code had the second-highest late payment rate at 9.56%. In that area -- which covers most of Fairfield proper -- only just over 4% of homeowners were in that position in November 2007. Vallejo’s 94590 ZIP code, which incorporates most of central Vallejo, is right behind at 9.32% of homeowners more than 90 days late.

Foreclosure rates in Vallejo-Fairfield increased during December over the same period last year, as well, CoreLogic found. According to its most recent data, the foreclosure rate for the area was 2.20% for December, an increase of 0.40 %age points over last year’s 1.90% rate. That’s higher than the national foreclosure rate of 1.7% for December. The home loan delinquency rate in the Vallejo-Fairfield area increased to nearly 9% in December from 5.50% in the same period in 2007, CoreLogic reports.

In the 94558 ZIP code, Napa’s Spanish Flat area at the tip of Solano County, only 2.42% of the homeowners are behind 90 days or more on their mortgage payments, according to CoreLogic. But though that is the area’s lowest late rate, it is a significant jump from .73% from last year.

Homes in Vallejo’s 94591 ZIP code, the area east of I-80 and includes Hiddenbrooke, seem to be selling best, Collins said. A high percentage of homeowners at least 90 days late paying their mortgage would ordinarily mean a correspondingly high percentage of new foreclosure proceedings, said Alan Schwartzman of Benicia’s Advance Mortgage. But these aren’t ordinary times. Some mortgage lenders are in the middle of a foreclosure moratorium and distressed home owners may get some mortgage relief from the national stimulus package, he said. Read the complete article online written by Rachel Raskin-Zrihen of the Herald Times.

You can visit them online at Loan Modification Leads or Live Transfer Leads online. LMB provides premium mortgage modification leads for many of the most respected law offices and top producing loss mitigation companies nationally.

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Treasury Secretary Henry Paulson, trying to deal with a worsening housing slump, discussed a new initiative aimed at helping homeowners who risk losing their homes.  Struggling homeowners are seeking loan modification programs from their lenders, but the process is taking 4-6 months in many cases.  Mortgage lenders simply have not invested in their loss mitigation departments. Maybe the banks thought this foreclosure crisis would just go away on its own.


Watch Paulson Discuss Loan Modifications, Liquidity and the Mortgage Rescue Plan

Some delinquent homeowners are reporting that they can’t get through by phone to their mortgage company’s loss mitigation center.   Many mortgage companies and bank institutions laid off thousands of employees last year, leaving most lenders unprepared for a significant increase rise in mortgage relief requests. That has led to a bottle-neck in processing loan modification applications. Some borrowers are having a hard time getting their lenders on the phone.  

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Reuters recently reported that U.S. mortgage companies increased their use of loan modifications in foreclosure prevention efforts to a record level in December, an industry group said on Thursday. 

Mortgage loan modifications, or permanent mortgage changes to lower payments, reached 122,000 in December, compared with the previous high set in October, said Hope Now, a coalition of mortgage service companies, home loan lenders and credit counselors.  Total “workouts,” including negotiated payment plans, increased to a record 239,000 in the month.  Regulators and lawmakers have criticized the industry’s foreclosure prevention efforts as too slow, or not effective, given reports that more than half of the modifications were failing after six months. The Federal Reserve said this week it would make additional measures to limit foreclosures by encouraging servicers to provide loan modification plans for at least $74 billion loans it owns, or has stakes in.

Mortgage Foreclosures Spiked 81% in 2008

More than 2.3 million American homeowners faced foreclosure proceedings last year, an 81% increase from the previous year.  Recent foreclosure reports suggest that one in five of those households in California are presently delinquent on the home mortgage.


Hope Now, an industry group that includes major mortgage lenders such as Wells Fargo & Co (WFC.N: Quote, Profile, Research) and subprime loan servicers, said members will likely turn more to re-underwriting new mortgage loans with lower interest rates or principal, over the less draconian practice of setting new payment plans to stretch out costs.  “Hope Now expects that the increasing reliance on loan modifications rather than payment plans will continue as economic conditions warrant,” the group said in a statement.  Data showing more prime borrowers than subprime borrowers were facing foreclosures in December underscored the urgency of foreclosure prevention. Total foreclosure starts rose by 34,000 in December from November, 75 % of which were prime loans, it said.  

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In an attempt to boost the weak economy, the Federal Reserve cut interest rates to a record low of less than .25 percent. This is good news for loan modification agreements because lenders are offering lower mortgage rates with more affordable loan workouts.  Federal Reserve cut its key interest rate to below 0.25%.

RealtyTrac reported that 850,000 foreclosed homes are already on the market and real estate experts anticipate that this number will increase by another 1 million homes in 2009, with 2 million more homes entering the foreclosure process during the same period. 

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Countrywide Loan Modification Information

Corporate owner: Bank of America
Department:  Home Retention Division.

Call (800) 669-6607
Web site:
Call the customer service telephone number on your loan statement.

Important loan modification qualifications: Proven financial hardship and target debt-to-income (DTI) ratio: 34%

Mortgage Relief Options:

ü  Temporary Forbearance

ü  Repayment Plan for Delinquent Loan Payments

ü  Mortgage Rate Reduction

ü  Extended Mortgage Terms

ü  Re-Amortization of Outstanding Mortgage

ü  Foreclosure Stay

ü  Home Refinancing

ü  Short Sale
Deed in Lieu of Foreclosure

Hardship letters are being sent to borrowers who are sixty days delinquent or who are deemed likely to become delinquent based on a computer model that crunches the borrower’s credit score, payment history, debt-to-income ratio, home value, interest rate reset and other factors. If you don’t get a loss mitigation letter, that doesn’t necessarily mean you won’t qualify. Countrywide and Bank of America reserve the right to approve or deny loan modification plans.  Income documentation and signed financial statements are required.

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Noted IndyMac Loan Modification Qualifications:

Government agency:  Federal Deposit Insurance Corp., or FDIC.
Call (877) 908-HELP (4357)
Web site:

ü  Inability to afford your current mortgage payments.

ü  Missed home loan payments.

ü  Ability to make modified payments.

ü  May need to prove financial hardship.

Target debt-to-income (DTI) ratio: 38%.

Mortgage Relief Options:

-      Repayment plan

-      Interest-rate reduction

-      Extension of loan term

-      Conditional forbearance

-      Foreclosure stay

-      Principal deferral

-      Short sale

-      Deed in lieu of foreclosure

Hardship Letters: IndyMac sends out “invitations to apply” for a mortgage modification and ready to sign preliminary loan modification offers based on information that’s on file.  IndyMac loan workouts require verification of income and expenses and financial statements must be signed. Borrowers who have missed two payments are more likely to receive a letter.

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Chase/ WAMU Contact Info for Loan Modification Programs

Corporate owner:   J.P. Morgan Chase
Contact:  Call the telephone number on your mortgage statement.
Call (800) 848-9136
Call (866) 550-5705
Visit a Chase regional counseling center.
Web site:

Hardship letter may be required.  Loan modification plans are offered only to owner-occupied residence.  Mortgage owned by Chase, WaMu or EMC or with investor approval.

Target debt-to-income, or DTI, ratio: 31 % to 40 %, capped at 50 % for borrowers who’ve demonstrated they can pay more.

Loan Relief Options:

Ø  Repayment plan

Ø   Principal forbearance

Ø  Mortgage modification in hardship situations

Ø  Extension of loan term

Ø  Deferral of principal

Ø  Interest rate reduction

Ø  Foreclosure moratorium

Ø  Interest-Only Payments limited to ten years

Ø  Hope for Homeowners Program

Ø  Refinancing with lender-paid closing costs

Ø  Pre-foreclosure short sale

Ø  Deed in lieu of foreclosure

Hardship Letters:  Chase will send letters to borrowers who have subprime adjustable-rate mortgage loans or payment-option ARMs. Borrowers are more likely to receive a letter if they’ve racked up the maximum amount of negative amortization and their interest rate is scheduled to reset. Chase and WAMU reserve the right to approve or deny loan modification plans.  Income documentation and signed financial statements are required.

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Citi Mortgage Contact Info for Loan Modification Programs

Departments:  Office of Homeowner Preservation, Borrower Relief Centers.
Citi Contact: Call the telephone number on your loan statement.
Call (800) MORTGAGE, or (800) 667-8424
Fax (480) 753-7832.

Web site:

Required qualifications for loan modifications:

Ø  Principal residence   Ø  Sufficient reliable income to afford modified mortgage payments.

Ø  Mortgage must be owned by Citigroup Inc.   Ø  Target debt-to-income (DTI) ratio: 38%

Mortgage Relief Options:

Ø  Mortgage Rate Reduction.

Ø  Extension of loan term.

Ø  Forgiveness of principal.

Ø  Foreclosure moratorium.

Ø  Financial education services.

Hardship Letters:  Citi is “reaching out to customers through calls, written correspondence, e-mail, toll-free assistance lines, online social networks and external counselors,” according to a company statement. Homeowners in Arizona, California, Florida, Indiana, Michigan, Nevada and Ohio are most likely to receive a letter because of declining home prices, high unemployment and economic distress in those states.

Loss Mitigation Tip: Citi also conducts local outreach programs with nonprofit counseling organizations.  Citi Mortgage reserves the right to approve or deny loan modification plans.  Income documentation and signed financial statements are required.

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With its bailouts of Bear Stearns and American International Group, the Federal Reserve took a vast portfolio of mortgages onto its books. Now, it is trying to use its control of billions of dollars worth of home loans to help prevent foreclosures. The Fed will seek to revise negotiated mortgage terms it owns that might otherwise enter foreclosure, Chairman Ben S. Bernanke told congressional leaders in a letter yesterday. The decision won praise from congressional Democrats, who took it as a sign that the central bank’s leaders are cooperating with mortgage relief efforts from the government’s power to try to reduce home foreclosures nationally.

It is unclear how many homeowners stand to benefit. Under the program, the Federal Reserve can provide loan modifications by reducing what a homeowner owes on a mortgage, lower the interest rate, lengthen the term of a loan or take other steps to keep a loan from defaulting, if doing so would offer taxpayers a better long-term payoff than foreclosure. Individual borrowers are unlikely to know whether their mortgage loans are owned by the Fed, but if they qualify for a renegotiation, they would deal only with their mortgage servicer. The Fed is emphasizing reducing the amount of principal owed by people at risk of foreclosure, particularly those with a mortgage loan balance that is more than 125% of the estimated value of their property. Private lenders have been reluctant to renegotiate mortgage rates that way, as some of the institutions that own those loans, in the form of mortgage-backed securities, stand to lose money and therefore object. Bernanke has previously advocated principal reductions, saying in a speech in March that they could be an “effective means of avoiding delinquency and foreclosure.” Mortgage modification programs remain the hottest alternative to home refinancing.

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This week the House Judiciary Committee approved legislation aimed at helping Americans keep their homes through bankruptcy. I introduced the Helping Families Save Their Homes In Bankruptcy Act of 2009 to give courts the power to modify mortgages to bring them in line with underlying home values. For families in distress, this is a much-needed home financing reform. And considering the realistic mortgage alternatives, it is fair to all concerned.

I have been working on this bill for nearly two years. I believe it represents one of the most tangible and productive steps we can take to limit the fallout from the real-estate depression that has been sweeping the nation. While it is not the entire answer to the economic crisis, it is a common-sense and practical approach to stopping a downward spiral where foreclosures also depress nearby home values and thereby hurt other homeowners. This spiral is not helping anyone — not homeowners, not lenders, and certainly not communities.

Some argue that we are acting too quickly, and that we should delay my legislation to give homeowners and lenders more time to modify the terms of existing home loans on a voluntary basis outside of bankruptcy. But the evidence shows that such modifications don’t work. For one thing, many of the service companies who control the mortgage loans claim they are not legally permitted to agree to voluntary loan modifications. And even when they are legally permitted to agree, their financial incentives are stacked in the direction of foreclosure.

As a result, the much-vaunted federal “Hope for Homeowners” program launched in October has been only a limited success. The program is supposed to facilitate new mortgages for homeowners if FHA mortgage lenders agree to reduce the amount of money owed on a home to 90% of its assessed value. The FHA loan program went into effect with the goal of helping hundreds of thousands of homeowners. To date, it has processed less than 400 FHA Hope for Homeowners applications. To those who claim that my bill will end up harming consumers by increasing the cost of credit, I would respectfully suggest that they are not taking account of the track record of the modern-day bankruptcy code.

For more than three decades, the bankruptcy code has permitted the very kind of court modification we are considering today, for every other form of secured debt, including loans secured by second homes, investment properties, luxury yachts, and jets. For over twenty years, this very kind of mortgage modification has been available for home mortgages already — if the home is a family farm. There is no indication that this has in any way increased the cost of credit for any of these kinds of home loans.

As for my legislation, we have narrowed it to apply only to existing mortgages. So it will have no effect on new home mortgages and cannot impact their cost. This is one reason why Citigroup is now among the many business and consumer groups that support this proposal. It’s also one reason why the Obama administration supports my bill. Article Written By JOHN CONYERS JR. Read the complete article >

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Recent mortgage loan delinquency reports indicated that 10% of homeowners in the United States are now in default with their lender. Mortgage loan modification experts forecast that in the next year or two that the number of borrower’s defaulting will double to more than 20 million households, with many others on the verge. This is nearing epidemic proportions, say industry professionals. With the fear of foreclosure and the threat of losing their houses, many homeowners remain discouraged because they have been turned down for mortgage refinancing. In addition, these borrowers are often misinformed about loan modifications and alternative mortgage relief solutions that may be available to prevent foreclosures. The Loan Modification Buzz reports that consumers are fed up with low rate talk that in most cases is only available to homeowners who have high credit scores and tangible equity in their home.

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