Table Of Content

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Loan Modification FOR ‰ DUMmIES by Ralph R. Roberts, Lois Maljak, and Paul Doroh, with Joe Kraynak 01_501993-ffirs.indd i 7/22/09 9:41:32 PM ® Loan Modification For Dummies Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2009 by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permit- ted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at http:// www.wiley.com/go/permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITH- OUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. 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Library of Congress Control Number: 2009932703 ISBN: 978-0-470-50199-3 Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 01_501993-ffirs.indd i 7/22/09 9:41:32 PM About the Authors Ralph R. Roberts, GRI, CRS, is an award-winning REALTOR® and author and a tireless defender of the American dream of homeownership. Ralph experienced the loss of real estate to foreclosure and added a foreclosure division to his nationally recognized real estate business. Since then, Ralph has led thousands of families through the foreclosure maze, informing them of their options, including loan modification, and steering them clear of the most common pitfalls while empowering them with the information required to save their homes and get on with their lives. Ralph is a nationally recognized expert in the fields of loan modification, foreclosure self-defense, and real estate and mortgage fraud prevention. He’s also an award-winning author who has penned several successful real estate books, including Foreclosure Self-Defense For Dummies (Wiley) and Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan). For the latest news, information, and insight on foreclosure alternatives, including loan modification, visit www.KeepMyHouse.com. Lois “Lane” Maljak is Ralph’s second in command and a foreclosure expert in her own right. Lois formerly ran Ralph’s foreclosure department, HomeSavers, during which time she met with hundreds of distressed homeowners every year, assisting them in foreclosure and pre-foreclosure, counseling them on their available options, and helping them leave a difficult situation in their past. Lois has a combination of compassion and expertise that makes her uniquely qualified to counsel distressed homeowners. She’s also coauthor of Foreclosure Self-Defense For Dummies (Wiley). Paul Doroh is an attorney and residential real estate professional who would like to see all homeowners empowered with the information and guidance they need to keep their homes, understand and lower their mortgage payments, make educated and sound financial decisions, and get on with their lives. Paul also coauthored Foreclosure Self-Defense For Dummies (Wiley) and periodically contributes to numerous real estate-related publications. Joe Kraynak is a freelance author who has written and coauthored numerous books including Foreclosure Self-Defense For Dummies, Flipping Houses For Dummies, Financing Real Estate Investments For Dummies, and Foreclosure Myths (Wiley); Take the Mic and Stage a Poetry Slam (Sourcebooks); and Master Visually: Optimizing PC Performance (Wiley). For more about Joe, visit his blog at JoeKraynak.com. 01_501993-ffirs.indd i 7/22/09 9:41:32 PM 01_501993-ffirs.indd iv 7/22/09 9:41:32 PM Dedication To the homeowners on Main Street and those who assist them in keeping the American dream of homeownership alive and thriving. Authors’ Acknowledgements Thanks to acquisitions editor Lindsay Lefevere, who chose us to author this book and guided us through the tough part of getting started; and to our agent, Neil Salkind (www.studiob.com/ salkindagency), who ironed out all the preliminary details to make this book possible. A special thanks to Barbara Jacobs, owner and manager of B&S Consulting Group LLC in Southfield, Michigan, who shared her extensive knowledge and experience through several of the case studies presented in this book. The knowledge and skills she acquired while working as a senior credit analyst, in loss mitigation, and in special investigations for companies like Fannie Mae, Lehman Bros., and Aurora Loan Services are now put to work educating and helping homeowners (with a special focus on seniors) discover their modification options and interpret their mortgage loans. Sarah Faulkner, our project editor, deserves a loud cheer for acting as a very patient collaborator and gifted editor — shuffling chapters back and forth, shepherding the text and graphics through production, making sure any technical issues were properly resolved, and serving as the unofficial quality control manager. Elizabeth Rea, our copy editor, earns an editor of the year award for ferreting out our typos, misspellings, grammatical errors, and other language faux pas, in addition to assisting Sarah as reader advocate — asking the questions we should have asked ourselves. We also tip our hats to the Composition crew for doing such an outstanding job of transforming a loose collection of text and illustrations into such an attractive bound book. We owe special thanks to our technical editor, Craig D. Doyle, Esq., for flagging technical errors in the manuscript, helping guide its content, and offering his own insight and advice from the world of foreclosure self-defense and loan modification. 01_501993-ffirs.indd v 7/22/09 9:41:32 PM Publisher’s Acknowledgments We’re proud of this book; please send us your comments through our Dummies online regis- tration form located at http://dummies.custhelp.com. For other comments, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Media Composition Services Development Project Coordinator: Sheree Montgomery Project Editor: Sarah Faulkner Layout and Graphics: Reuben W. Davis, Senior Acquisitions Editor: Lindsay Melissa K. Jester, Christin Swinford Sandman Lefevere Proofreaders: ConText Editorial Services, Inc., Senior Copy Editor: Elizabeth Rea Caitie Copple Assistant Editor: Erin Calligan Mooney Indexer: Valerie Haynes Perry Editorial Program Coordinator: Joe Niesen Technical Editor: Craig D. Doyle, Esq. Editorial Manager: Christine Meloy Beck Editorial Assistants: Jennette ElNaggar, David Lutton Cover Photos: iStock Cartoons: Rich Tennant (www.the5thwave.com) Publishing and Editorial for Consumer Dummies Diane Graves Steele, Vice President and Publisher, Consumer Dummies Kristin Ferguson-Wagstaffe, Product Development Director, Consumer Dummies Ensley Eikenburg, Associate Publisher, Travel Kelly Regan, Editorial Director, Travel Publishing for Technology Dummies Andy Cummings, Vice President and Publisher, Dummies Technology/General User Composition Services Debbie Stailey, Director of Composition Services 01_501993-ffirs.indd vi 7/22/09 9:41:32 PM Contents at a Glance Introduction ...................................................... 1 Part I: Getting Up to Speed on Loan Modification ... 7 Chapter 1: Keeping Your Home by Modifying Your Loan .................... 9 Chapter 2: Taking Stock of Your Situation ........................................... 23 Chapter 3: Evaluating Your Options ..................................................... 41 Chapter 4: Deciding Whether to Team Up with a Pro or Fly Solo ..... 59 Part II: Kick-Starting the Process: Applying for a Loan Modification ..................... 75 Chapter 5: First Things First: Contacting Your Lender ...................... 77 Chapter 6: Gathering Facts, Figures, and Documentation ................. 91 Chapter 7: Knowing What to Ask For .................................................. 101 Chapter 8: Preparing and Submitting Your Application .................. 117 Chapter 9: Keeping the Process on Track and on Time ................... 131 Part III: Hammering Out the Details with Your Lender ........................................... 141 Chapter 10: Discussing Loan Modification Scenarios with Your Lender ............................................................................ 143 Chapter 11: Evaluating Your Lender’s Initial Offer ........................... 155 Chapter 12: Negotiating a Better Deal ................................................ 167 Part IV: Dealing with an Uncooperative Lender ... 181 Chapter 13: Brushing Up on Your Legal Rights ................................. 183 Chapter 14: Auditing Your Mortgage Loan ........................................ 197 Chapter 15: Applying Some Legal Pressure ....................................... 213 Part V: The Part of Tens ................................. 225 Chapter 16: Ten Tips for Long-Term Success .................................... 227 Chapter 17: Ten Common Loan Modification Myths ........................ 233 Part VI: Appendixes ....................................... 239 Appendix A: Resources ......................................................................... 241 Appendix B: Glossary ............................................................................ 255 Index ............................................................ 263 02_501993-ftoc.indd vi 7/22/09 9:42:23 PM 02_501993-ftoc.indd vi 7/22/09 9:42:23 PM