7/18/10: Still Trying to Modify Your Loan? Tip the Scales in Your Favor with Martin Andelman
Feeling undersized when going up against your lender in a loan mod negotiation? It’s a big problem to wrestle with, but you’re not alone! Recent developments are tipping the scales back toward the borrower – and none to soon! To get up to speed on the latest and greatest, we invited back to the show one of the most prolific commentators on the topic.
In the Sumo sand pit for this episode:
- Your larger than life host, Robert Helms
- Co-host and sand pit groomer, Russell Gray
- The Godfather of Real Estate, Bob Helms
- Special Guest, Mortgage Industry Pundit, Martin Andelman
Even though we see lots of opportunities in all the crushing problems facing today’s real estate market, that isn’t much consolation to people still grappling with mortgages that don’t make sense. No wonder our special report, What You MUST Know Before Attempting a Loan Workout (available in our Resource Center) has been our most requested publication for the last 18 months. And when you consider that the number of modifications actually getting done are dwarfed by the huge number of mortgages currently in default, there’s no way to take this problem lightly. When it all shakes out, we know there’s still a LOT of work to do before the balance sheets of banks and borrowers are stabilized. It’s a sizable task.
Enter Martin Andelman. Martin reminds us of Don Quixote from Man of La Mancha. We almost went there with this blog, but the Sumo thing was way too much fun. Still, Don Quixote was a crusader pursuing an impossible dream (the theme song from the movie), so it seemed to match. It was hard to combine “impossible dream” with Sumo, unless there was a Speedo involved, and we didn’t think that was a good fit, if you know what we mean.
Anyway, Martin’s been an observer, commentator and outspoken critic of the banks and lenders who claim to care about the borrowers, but can’t seem to do anything substantial to help. Do you remember the Bible verse in James, where it basically says “talk is cheap” (our paraphrase)? That is, what good does it do to say you care, if you don’t really do anything real to help?
Please don’t misunderstand. We’re not advocates for, or supporters of, bailouts for borrowers or for banks. Philosophically, we think things would get better a whole lot faster if the government would get out of the way and let the banks and borrowers negotiate. After all, these are contracts between private parties. But the government has had its nose in the mortgage business for decades, so it’s a threesome, like it or not. (We’re sorry. Is our opinion showing? We’ll tuck it away.)
So we start this show with an update from Martin on the state of the government’s HAMP program. Can you feel it yet? Is it working? Is it getting better? Martin gives us the scoop. His answer surprised us.
And while the Executive Branch is trying get its HAMP fired up, what about the Legislature and the Judiciary? Martin briefs us on a couple of interesting court cases which affect loan modifications. Of course, we can’t help but talk about California’s SB94, which now “protects” consumers from all the “greedy” loan mod attorneys who selfishly want to be paid for the work they do. Why wouldn’t the attorney just do the work first and then send a bill? It’s so unreasonable to think that a client who isn’t making their mortgage payment would be a bad credit risk. We’re sure all the underwater borrowers are sleeping much better now that now that most of the loan mod companies have shut their doors. Yeah, that helped. Unless….do you think maybe it wasn’t the borrower the law was intended to help? Hmmmm….? Sorry. That pesky opinion keeps popping out. These Sumo shorts don’t give you much room to hide.
But lest you think this episode is just a rant about what isn’t working, the real highlight of the show comes when Martin tells us about a new “secret weapon” that’s now available to borrowers. And he says it IS working! He says borrowers armed with this powerful new tool find themselves no longer getting squashed in their negotiations with the lender. That’s right! The little guy is starting to win. We like it.
Off mic, we impose upon Martin to write a special report on this topic, which he generously commits to do. He calls it The Underwater Borrower’s Secret Weapon: How to Make Modifying Your Loan Your Lender’s Idea. Wow. That’s a mouthful. But if you know Martin, it’s not surprising. You can bet he’ll have a lot to say – and it will be fun to read!
The bottom line (that’s a Sumo pun in case you missed it) is we got so jazzed about the whole thing, we’re working on adding the company which supplies this “secret weapon” to our resource network. Meanwhile, if you or someone you know has been wrestling with a lender that seems immovable, be sure to request Martin’s report. Maybe his secret weapon will work for you and your friends. We want to help get the secret out, so everyone has access. Not just because we like to root for the underdog. But because the sooner all these bad loans get re-done, the faster the world can get back to focusing on more productive things. And that’s good for everyone.
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1/31/10: Underwater or Under Motivated? Options to Rescue Your Property When You Can’t (or Won’t) Pay the Mortgage
Amidst the green shoots, silver lining and contrarian investment opportunities – there are still millions of property owners in America struggling to make the payments. The Real Estate Guys™ Special Report: What You MUST Know Before Attempting a Loan Workout has been (by a big margin) our most requested report. So we know there’s still a lot of working out to do before many people are able to move forward.
Because of all the changes in the mortgage mitigation business over the last several months, we thought it was time to re-visit this fun and exciting (not!) topic. After the show, we decided to lighten up a little and go get a root canal. Of course, dentists like it when people get root canals, so it appears we can’t escape the reality that there is opportunity in pain.
Enjoying the nitrous oxide in the studio for this week’s show:
- Your Host, Robert Helms
- Co-Host and Financial Hygienist, Russell Gray
- The Godfather of Real Estate, Bob Helms
- Loss Mitigation Industry Insider, David Lies
Once the nitrous kicked in and we were feeling no pain, we drilled into our discussion starting with the State of the Union in the Loan Modification business. With changing laws and attitudes, plus bailouts and political pressure – as well as an industry that is no longer considered fledgling or renegade, we had a lot to chew on.
To fill the cavities in our understanding, we quickly turned to our special guest David Lies. Davis is a 20 year loss mitigation industry veteran, 10 of which he spent directing the efforts of lawyers and collectors to reduce the lender’s losses. Even though it’s a whole new ball game, he has a great understanding of what motivates lenders to re-negotiate.
David shared what he sees as the most common misconceptions and misunderstandings about mortgage loss mitigation. He reminded us that lenders are actually the source of some of the confusion – and that lenders loss mitigation department’s mission is to reduce the lender’s loss, NOT the borrower’s.
David also shaped our understanding of who the ideal candidate for a workout or modification is. When time is short, it’s important to know what scenario is most likely to be accepted by the lender – and why professionals often can delay foreclosure faster, better and longer than do-it-yourselfers.
We talked about the government programs like HAMP, HASP and HEMP. Actually, there is no HEMP, but after the nitrous it sounded like a good program. Anyway, when the smoke cleared, David explained the 4 step waterfall process that lenders go through when deciding if and how to modify a mortgage. Then he shared the two things lenders always require before they will consider modifying a loan.
Before we knew it the show was over and we could feel our cheeks again. But it was so much fun, we’re going to do a follow up show on renegade strategies for delaying foreclosure. Even if you are not personally facing the loss of a property (and we hope you’re not), if you’re trying to acquire a property from a distressed seller, it could be very useful to know how to help them hold on until you can get your deal done. Be sure to tune in!
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