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Welcome back to the Velocity of Money, it is New Year’s Eve and the day is almost over Bill O’Rilley is coming on in just a few moments but for right now we have Dan Havey with us talking about loan modifications this segment Dan we want to talk about the specifics of the actual mechanics of, how does it actually work for the homeowner? Let me just start it off and if you would and will let you explain the back end of how it works
Important to point out here in this is one of the things I do not talk about all that much there is no upfront fee for us or for velocity financial
We do collect retainer for the attorney
Our job is to determine where you’re at now, be very specific about where you’re at with your mortgage now, what the rate is what it’s done, those specifics
How much you make? We have to help the lender with one thing which is to establish a hardship which is crucial to this
You can’t be making half $1 million a year paying $5000 a month in a mortgage, they are not just a lower your interest rate because you want it
There actually has to be some sort of change, financial change, hardship
We determined that and then there is a significant amount of paperwork involved, velocity financial takes care of that for you we fill out the paperwork along with your help, review all of the documentation, we then recommend be right loan modification whether it be an interest rate reduction, or extending the term of your loan, waiving some of the balance that you owe which is very very rare
To make sure that once we’re done with this whole process you can sustain and live in that house and be happy forever.
So process itself really what you are explaining to me is really not that much different than what people went through when they got their loan in the first place.
That is correct and it’s kind of funny, this has to be exactly the reverse
There is a work that we need to collect some of the mortgages and you know we do not need to get an appraisal we get the value of the property to see where you’re at and in most cases your underwater with the value
We do not do an appraisal though, there is no credit analysis we do review your finances, and these sorts of things but essentially it’s just like doing a loan
What we’re trying to determine is exactly what is sustainable for you.
So what we do at the modification hotline at velocity financial is to put together the entire package, just like we do for a loan package because were basically can send this to a underwriter are not known as an underwriter they’re known as a loan modification coordinator but at modification hotline we are the first set of eyes.
We work with you directly, getting all the paperwork in, getting it put together because we know exactly what has to be in that file, how it has to be stacked, how it has to be presented, before it goes to the loan modification coordinator who works for the attorney
Then once it is at the attorney’s office at the modification coordinator there, they take a look at it, they make sure that everything is in there, they make sure that it is a doable modification this all happens before it is ever presented to an attorney
Is that correct?
Yes it is correct and it sounds like there are a whole lot of steps
There is a lot of paperwork
The process like you said is very similar to a loan with the exception of the different costs of the title company and all that other stuff
Those do not exist, we do not charge an upfront fee, and we do collect a retainer for the attorney
At some point during our process we make our recommendations and we turn it in
Then the attorney does their due diligence and that’s where we really want to, real quick, I want you to explain what happens, what are these attorneys looking for?
Well this is where it completely goes off track, versus what a homeowner would do if they were doing their own modification because they would do everything we just talked about, they would fill out the paperwork, get-together tax returns, pay stubs, whatever the lender wanted and they would present all to the lender
Now they probably wouldn’t know exactly how to stack some of the paperwork, and how to calculate some of the things that we know how to calculate
But they would put all that they work together
Where the difference comes in is once against the attorney because of the attorney ultimately wants to get to a loan modification by they can’t just call up the bank and say hey I want loan modification because he is going to get the same result you did
So when he has to do is he has to go through the file, and he has to look for things like, I am going to use a bunch of acronyms here
He’s looking for things like a TILA, RESPA, HOEPA, HUD all these different guidelines that the lender was required to meet while giving you the loan
We have to check to see that all those things were done properly
And then he will send a letter to the bank explaining that’s what he’s doing, that he may or may not have found any violations
And that he is requesting certain documents from the bank
As we talk about in an earlier show
One of the things is going to requests from the bank is that they produce a copy of the note
Because if they don’t have a copy of the note they legally they can’t be foreclosing on you in the first place, if that’s where you are in the foreclosure process.
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