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Trying To Get A Mortgage Modification? Better Get A Loan Audit First.


So if your like a lot of homeowners out there, you may be having a hard time making ends meet. In most cases your largest obligation per month is going to be the roof over your head. So what do you do when your having a hard time paying your mortgage? Ok.. besides, begging borrowing and stealing. You call your mortgage company and ask for help. You no doubt have heard all of the stories in the news about Loan Modifications. "The Obama Loans." So on and so on. Also, undoubtedly, you have heard the horror stories as well.

I'm betting either you or someone you know has some type of horror story when trying to get a loan modification. It might be that you called a "Loan Modification Company" that promised you the world only to take your money and just give you the run around. Or, in an increasing number of cases, it was your actual mortgage company that gave you the run around. Tell me does this sound familiar…

You are having a hard time making your mortgage payment. So, like a good boy/girl… you call your mortgage company. You say "Hi. This is Mr. and Mrs. Homeowner. We are having trouble making our mortgage payment and would like to apply for one of those modifications we heard about."

Now. Here is where it gets tricky. From this point you will get a wide variety of responses. Everything from…. "You have to be late on your mortgage to apply. Your not late enough. You make too much money. You don't make enough money…… blah blah blah." All ways, seemingly to discourage you from applying. Or…

The mortgage company will tell you they are sending out a modification package. Just fill it out and send it back and they will get to work on it. So you get the package. Of course it takes you several weeks to gather the seemingly endless stream of paperwork they require. You finally get it all together and send it in. You wait anxiously for a response by phone or letter. You finally call and check on the status to get someone on the phone who says… Oh well it's in process. You wait some more. You call back. You get another person on the phone who says…. Oh.. well, you were missing some documents so we need you to send those before you proceed. So you send them again….. You call back… You get yet another person that says the docs you sent are expired so we need you to send the updated ones……… Sound familiar? I bet it does. That's because it is happening a lot out there. More than you might imagine. In fact, it is happening to the vast majority of people that I speak with.

This is the point where most get frustrated and either try calling one of those "loan mod" companies or just stop paying the mortgage all together and let it go into foreclosure. What a lot of people don't know is that you can legally fight the foreclosure action. You can present a case to the mortgage company that may get you an offer from the bank for a modification.

NO- It's not hiring the services of some shady mortgage modification company.
NO- It's not trying to negotiate with the bank by yourself.
NO- It's not signing a letter allowing your Uncle Rupert who used to be a real estate agent in the late 80's negotiate on your behalf.

2 things you need to do.

A Forensic Loan Audit- is a process where your mortgage/loan documents are audited for mistakes/fraud/ or omissions by the lender or broker. If it turns out your lender/broker made some critical errors while originating/processing/servicing/ or selling your loan, you may have an actual case to have an attorney fight for a loan modification for you.

If your wondering.. Mortgages originated between 2002 and 2008 have a little over 80% instances in which mistakes or fraud where committed by the lender. This can be everything from excessive rates, STATED OR NO DOC INCOME LOANS, not disclosing terms of the loan properly, etc.

Now as it relates to a foreclosure defense attorney, this won't be too hard to find. I have some warnings for you as well on this end. Make sure you get an attorney who specializes in this area. Foreclosure defense is a highly technical area of law. It involves securities law among other things. Make sure you find an attorney who specializes in this area.

There is a non profit group that gives free workshops for homeowners interested in finding out their options when facing a foreclosure. The website is

They have workshops all over Chicagoland. Again, it's free and the speakers there are actual foreclosure defense attorneys. They donate their time and even have a Q and A after the workshops.

Upcoming events are in Chicago on July 19th and in Oakbrook on July 26th. Click here for a full list.

Remember, you can't win if you don't fight!

Sean Cochran

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