My Mortgage Modification -- Part 3 -- The beginning of the end

If you just stumbled across this on this page, the public probably want to read mortgage loan modification part one and mortgage loan modification part two as well, to see how I got into this mess in the first place.

By the time March of 2009 rolled around, I knew I was in deep trouble. Up until this point I had made my mortgage payments on time, albeit with some difficulty. But in April for the first time ever, I missed a payment. It took us until the middle of May to get that April payment made, along with the penalty fees.

In the first week of March, I had requested the proper paperwork and submitted an application for mortgage modification. According to my bank, they receive the package on March 19. Weeks went by and I heard nothing.

My real estate agent, who was a family friend, stopped by one afternoon and asked how we were doing. I related to her the events of the previous several months. I explained to her that we were finding ourselves unable to make our mortgage payments. She asked if we had sent in a modification package. I replied that we had, and she asked if we had had any help with it.

When I explained to her that I had done it all myself, she replied that that may have been a mistake. Although there are many unscrupulous organizations out there just now taking advantage of people in trouble with their mortgages, she believed that she knew someone who could help me.

The Mortgage Modification Expert

Okay -- at this point you think I'm going to launch into some sort of cheesy sales pitch for some equally cheesy company that helps you to do modifications. Well, you're wrong. I have no ax to grind here. I'm simply relating the story of how I found myself in this position and what I'm doing to extricate myself.

Anyway, she gave me this guy’s name and number and I went over to see him. I was pretty skeptical at first. I pointed out to him that the way the program is set up you don't need any professional help. That you either are approved or you are not. I also told him that I was aware that there were a lot of companies scamming desperate homeowners just now.

He absorbed all this and then asked me a question:

“Would you go into court without a lawyer?”

“Of course not” I replied.

“Well then why would you attempt to enter into negotiations with a gigantic bank which has thousands of lawyers and millions of dollars at its disposal, with no professional assistance at all?”

Well I didn't have an answer to that. I paid him a small fee on the spot. We went over the package that I had sent them the month before. He then pulled out some paperwork and showed me the package that he would be sending in on my behalf. There was a world of difference.

The Mortgage Modification Proposal

His paperwork pointed out in no uncertain terms exactly what the bank was required to do with respect to the provisions of the new laws enacted by the Obama administration. He quoted chapter and verse, and then practically demanded what seemed to me almost unbelievably huge concessions on their part.

His proposal would reduce my interest rate from 6 3/8% to a flat 2%. It would remain at 2% for the next five years, at which point my rate would jump to 5%. And it would stay at 5% for the remainder of the loan. That was amazing enough, but what came next was even better. If the bank agreed to the terms of his proposal, I would also be forgiven my May and June mortgage payments, and not have to make the next four months’ payments either. When monthly payments resumed, my mortgage would have dropped from just over $2500 per month to just over $1600 per month.

We finished up the mortgage modification paperwork and faxed in the proposal. Last week I received an overnight package and a phone call from a company which had been hired by my bank to handle all of their mortgage modification work.

Since then we have filed paperwork to enable my representative to negotiate directly with the bank and this third company on my behalf.

One interesting thing was that during the phone call I received from the bank’s modification company last week, the representative emphasized that I did not need help with this, and that I would either be approved or not, and that there was no negotiating.

That's a ton of crap. I personally know two people who have entered into this situation with their banks and they have come away with different results. It seems obvious to me that anyone or any organization will attempt to manipulate the outcome of a given situation to their advantage. This applies to my bank, and to me as well.

So what will happen next? Beats me. But whatever does I’m putting it up here on HubPages for everyone to read about.