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Avoid Foreclosure – Loan Modification Can Save Your Home – Part 2 of 2

This is the second installment of a 2-part series on mortgage loan modification.  Here’s what I said in the first part:

“Most home loan borrowers don’t know that it is sometimes possible to obtain what is called a “loan modification” if they get behind on their mortgage payments.  When a lender agrees to provide a loan modification, your mortgage is modified to move the past due payments to the end of the mortgage loan term and often the loan is modified to allow for smaller monthly payments.

“So, if you are behind on your mortgage payments and are faced with loosing your home through foreclosure… don’t give up hope quite yet.  You may still be able to save your home.

“Before I go any further, I need to point out that when this happened to me, I lived in the State of Ohio and I and my home come under the laws of the State of Ohio.  Everything in this post is written from that perspective.”

Here’s a link to the first part of the article: <Click Here>.

I’ll now pickup with the rest of the article…

How I Think You Should Tell Your Story

As a part of the mediation process, I was required to fill out some paper work and explain why I was in foreclosure and why I thought that I could be trusted to pay back my mortgage loan if the loan company granted us a mortgage modification.  As a side note, because of the way I set up the mortgage when we bought our home, my wife was not actually on the mortgage.  She was, however on the deed.  This was by design since it gave her “dower rights” type protection but no legal responsibility for the mortgage loan itself.

We Thought We Had Lost Our Home

We Thought We Had Lost Our Home... But We Were Wrong!

When I filled out the paperwork for the court appointed mediator, I was perfectly honest and divulged relevant information about our situation fully.  However, I played up the parts of my story that were in my favor and did little more than mention things that were not in my favor.

A consultant’s trick that I used (I’ve been a professional consultant most of my adult life) that may help you too is to mention any negatives as briefly as possible without being deceptive and follow each negative or group of somehow interconnected negatives by a related offsetting positive or group of related positives.

I like to keep the negatives to a maximum of one sentence per negative, if possible.  Sometimes I will put multiple negatives in the same sentence if it makes sense to do so.  This may cause speed readers to skip some of the negatives.  Lawyers for your mortgage company (called Opposing Counsel) have a tremendous amount to read most days if they are doing their job and may actually skip over the sentence.

Another trick that I will occasionally use is to bury negatives in the middle of a longer paragraph which begins with a positive or group of positives.  Along that line, it doesn’t hurt to also end the paragraph with a positive if appropriate.

And, I like to write at length about any positives without belaboring the subject.

I always make sure to not put all the negatives together or all the positives together if that is reasonable in my situation.  Plus, I go out of my way to structure what I’m writing so that my best positive is the last thing that I present to the reader.  Two positives in a row is even better if it comes across right.

I believe that doing it this way leaves the best possible impression with the reader.

Another thing that I think that you need to do is to do exactly what your attorney or the assigned individuals from your attorney’s staff tells you to do.  And, you absolutely must do it in the time frame they say you need to do it.  They know the process and if they say it needs to be done by a certain time it probably does.

If, for some reason, you can’t make a deadline tell them as soon as possible so they can help you meet it.  If you don’t understand how to do what they tell you to do, be honest and let them know that you don’t understand.  It is in their interest to help you succeed.

Meeting deadlines and providing required information to the Court and Its representatives like the mediation specialist is essential to successful navigation in “legal waters.”  There are deadlines that you literally cannot recover from if you miss them in a legal process. Avoiding a foreclosure on your home contains deadlines like that.

Help your attorney and staff to help you; do what they tell you to do in the time frames that they specify!

The Steps in Our Loan Modification Process

Remember, everything in this post is about what happened to us.  Our home is in Ohio so everything that I’m describing happened according to the laws of the State of Ohio.  Anything that you do that is based upon the information in these two articles will need to reflect the laws of the State in which your residence is located.

The beginning of the loan modification process was actually our first missed payment.

Most mortgage lenders require you to resolve all missed payments at the same time or they will not accept your current payment.  The fancy term for this is that you must “cure all arrearage.”

This, unfortunately, makes it impossible for many, if not most, people to avoid foreclosure once they get behind.  I know it did for us.  Our money situation was so tight at the time that it would have been almost impossible to even make one payment let alone make all the past due payments too… So, each month the amount due became worse and worse.

Finally, when we were about a year late on our mortgage payments our first mortgage lender filed a civil court suit to get ownership of our home.  In Ohio that kind of suit is called a “Foreclosure Complaint.”  It was filed in our county’s Court of Common Pleas.

After they filed suit, two things happened:

•  A process server appeared at our front door and delivered a certified copy of the Foreclosure Complaint to us.

•  A day or two later, we received a copy of the complaint via the U.S. mail.  If I remember right it came via regular mail.

According to the complaint, we had 28 days to respond.  The mail copy of the complaint also contained forms to complete if we wanted court-appointed mediation of our situation.

Then, as a side note, we received Attorney Patterson’s marketing letter about this time.  I interviewed him and decided that he would do what he said he would and I’m glad I believed him!

My wife and I agreed to have his firm represent us. And, at that point, his staff began controlling the process.

They told us what we needed to do, how to do it (when appropriate) and when they needed to have our information so they could make their filing deadlines.  They made sure that the information that we provided was presented in such a way as to put our situation in the best possible light.  And, they handled making sure we provided all the information that was needed to meet our objective which was to stay in our home.

Attorney Patterson’s staff also made sure that all necessary paperwork was filed properly and on-time to get any time extensions that we needed to complete the paperwork and meet any court-ordered deadlines.

His staff also handled all communications with Opposing Counsel (the mortgage company’s lawyers) and with the Court and the Court-appointed mediator.  About all I had to do was fill out the mediation-related paperwork which included the explanation of my situation that I discussed in the previous section.  Attorney’s Patterson’s staff handled everything… They were great!

Finally, one day, about two months into the process, I got a call from Kelly (Attorney Patterson’s staff member assigned to my “matter”) to let me know that the mortgage company had agreed to modify my mortgage.  If you are trying to avoid foreclosure of a property in Ohio, I suggest that you call Attorney Patterson’s office in Willoughby, Ohio.  His telephone number is 440-943-4700. Ask for Kelly to be assigned to your case… I think she really knows what she is doing!

Kelly also explained to me exactly what I had to do to complete the process.

And Now, the Rest of the Process

The mortgage company was obviously working with me. They agreed to change my Adjustable Rate Mortgage (also called an “ARM”) to a fixed-rate loan.  The interest rate is less than 4% and my payment, including escrow, is about half of what my monthly mortgage payment had been before I stopped paying my mortgage a bit over a year earlier.  And, to make it even better, all of the arrearage (the payments that I missed) was moved to the end of the loan.  The whole process cost me nothing but some time, attorney fees and wear on my fingertips as I wrote up my explanation of my situation and did some emails.  The attorney fees that I paid were approximately but less than one of my pre-modification monthly mortgage payments.

In order for the mortgage modification to take effect I had to do two things.

First, I had to sign a modification agreement.  With terms like I got it was a “no brainer.”

Second, I had to make a specified number of monthly modified mortgage payments early or on-time with “certified funds.”  Short of showing up at the mortgage company and handing them cash (never give them cash, by the way), I only know of two ways to provide them with certified funds… Either you give them a teller’s check or certified check (the name varies from state to state) or you wire the money from your bank to their account.

I chose to wire the money, based upon the instructions that accompanied my copy of the modification agreement.  Then, again based upon the mortgage company’s instructions, I sent them an email informing them that I had wired money to their bank account along with the pertinent information.

After I had met the terms of the mortgage loan modification agreement, the mortgage company dropped their Foreclosure Complaint and my loan was returned to current status with the new interest rate and monthly payment amounts.

And what’s happening now?

Darn, when am I going to learn? I’m late again :–(.  What can I say, life happens!