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Loan Modification Secrets Revealed

Yesterday I hosted a call with Billy Alvaro of ModificationSecretsRevealed.com.

Billy was 2005 Long Island Business Man of the Year and Inc 500's 136th fastest growing private corporation. He built his mortgage bank to over $1Billion in fundings within just 3 years of opening his doors.

This is the guy I go to when I'm stuck with a home financing problem. (Hey, even Michael Jordan had a coach) I've seen him take loan modification packages that had been declined more than once by competitors and get them approved in a few weeks using out of the box techniques... even with lenders who were refusing to approve anyone.  He is the best I've seen...hands down.

Having been the CEO of a mortgage bank, he brings a unique perspective to the loan modification process. During this call I grilled him to find out more details about loan modifications, like who qualifies and who doesn't, what the secret is to getting them approved, etc.  We even discussed what and who to avoid.

Here is the call in its entirety, in case you missed it. Just press play:

Loan Modification Answers

This comment was posted the other day.

Brian,

What are some of the loan modification companies that do NOT charge up front costs on loan modifications for customers?

I am a bank loan officer for 18 years with no fraudulent background. I have an attorney based loan mod company I work with, led by an attorney I have known for years and trust.

He charges upfront with a money-back guarantee. His pre-qual process is very particular; most consumers with bank-negotiated loan mods are back in trouble - which is a file the attorney usually cannot help at that point...

Where do you find these "true" loan mod companies?

-Tony

First, let me say that if you're trying to negotiate directly with the lender, you should know that the banks aren't going to give you the loan modification you deserve voluntarily. They're in business to make money, so they'll fight you and your attorney every step of the way to keep the balance and payments as high as possible. Lenders do a great job of making you feel as if the deal they're offering is the only one on the table and if you don't take it, too bad for you.

The truth of the matter is the lender probably did no research as to the borrowers ability to repay the loan. Why spend the money doing research when they can just stall and bully you into taking whatever they want to give? That's exactly what they'll do if you don't know your rights. That's why a majority of consumers who take the lender's deal end up right back where they started. 

I don't know your attorney, but I would want to know what he was doing for the past 5 years.  How many loan modifications did he process?  I ask because most attorneys are new to loan modifications.  I remember during the refi boom, even divorce attorneys were getting into loan closings for the easy money.  The difference here is that the mistakes an attorney may make while learning the game can really hurt their clients financially.

That's a big reason you need a professional who knows the laws and the lender's games better than they do. That kind of professional doesn't need to be paid his $2500 until he delivers the results first.

The question isn't WHERE you find that kind of professional, but HOW do you find one. (Geez. I hope there's more than one.)

It comes down to being educated about what it takes to qualify for a loan modification and being realistic about your expectations. That way if you're talking to someone who is promising you the moon and stars, you'll be able to see right through them.

I asked the one man I trust to know more than me when it comes to home financing to answer your questions.

My adviser ran the largest mortgage bank in New York. He was 2005 Long Island Business Man of the Year and he even made Inc magazine's 136th fastest growing private corporation. He started the company with $5,000 and grew it to over a billion dollars a year in loans funded within 3 years.

As a banker, he has a unique perspective into a lender's business operations and tactics.  I've seen him take a lender's counter offer of $3600 a month and beat them down to $2600.  I've also seen him negotiate short sales of $300K+ down to $96K.  He achieved these results after other loan modification companies and their attorneys failed to help these clients.

He knows his business like few others I've ever met.

And I got him to spill the beans for you... for FREE.

Click here to join us for a free teleseminar on loan modification secrets.

Loan Modification Scam Alert

You may not know it, but I'm a proud whistle blower.   My first press release was called, Dirty Tricks Your Bankers Don't Want You To Know About, and it got me the cover of the Wall Street Journal. It was mainly about negative amortization loans (AKA: Neg Am or Option Arms).

The point of the press release was to make the public aware that these mortgage products were being sold under false pretense, meaning the majority of brokers and bankers who were selling them were selling them to the wrong type of borrowers...on purpose. 

Note: NegAms have their uses, but they are an advanced product, completely unsuitable for the average home buyer, yet they were being sold to first time home buyers or home owners who were drowning in debt.

How did I know?  My bank sold loans both wholesale an retail. I often worked with mortgage companies to help them close loans with my bank.  I would listen to the loan officers on the phone and see the files they submitted. It was plain to me they didn't care about the lives they were ruining as long as they made their sale. It made me sick.

When the market collapsed, these guys went for a number of months without making money.  No one wanted their garbage loans.  Then the inevitable happened.  They discovered loan modifications.

A loan modification is a procedure in which the lender agrees to change the terms of the loan in order to help a borrower who has experienced a hardship.

The key word here is HARDSHIP.

In other words, if you lost your job due to the changes in the economy, or you had a medical emergency, etc. 

It doesn't apply to people who simply want lower payments or are just bad with money.

That didn't stop the new wave of scammers who needed to make some fast money.  Shops opened up everywhere almost overnight.  Hiding behind the guise of, "Get your share of the bailout!", these guys promise you that you'll qualify for a lower payment, reduced principal balance, and more.

They work with law firms, so that they can charge you up to $2500 up front for their services. Most even offer a money back guarantee.

Here's the scoop. 

The telemarketers, which for the most part are the same guys who sold you your mortgage which you shouldn't have qualified for in the first place, are trained to say just about everything and anything you want to hear to get the $2500 out of you.  They then split the fee with the law firm. 

The law firms hire a number of paralegals to file the paper work for them.  The big picture is they know they're getting paid regardless of whether they get your loan modification approved or not.  Their guarantee is almost impossible to enforce.  I'll show you.

The paralegals don't know a thing about RESPA or any of the laws which protect you and make the loan modifications possible.  The lawyers know that the lenders will make some form of pathetic counter offer, though it will be no where near what they promised you or that you really qualify for, which they'll then carry to you.  If you don't accept, too bad.  Your money is gone.

You could get the same results yourself if that's all they're going to do.

I have spoken with a number of guys that work at these shops. They tell me less than 2% of their clients get the deal they were promised. The truly sad thing is that even these guys feel like they're robbing good people of their last few dollars.

You know you're at the bottom of the barrel when your hired guns start having a conscious.

There are professionals that do loan modifications legitimately.  They negotiate aggressively with your lenders to get you the lowest possible payment (never taking the BS low ball offer your lender automatically generates without even researching your file), reduce your balances (in some instances), and don't charge $2500 up front, but only charge after they've successfully negotiated your loan modification as promised.

I would say the difference between what they do and what these chop shops do is similar to the difference between what we do at Score More Credit and what other companies in my industry do to repair your credit.

Your thoughts?