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.

Listen Now:

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.

9/27/09: The Real Estate Guys Answer Your Questions

Every day we get emails from our listeners.  Some like to tell us how awesome we are (oh, go on!), but most have questions.  We’re working on some new ways to be able to be more responsive.  So keep those emails coming!

For this week’s show, we decided to grab a few question out of the email in box and talk about them on the air.  Joining host Robert Helms in studio are his trusty sidekick, Russell Gray and “The Godfather of Real Estate” Bob Helms.

We kicked off the show  commenting on Ben Bernanke’s pronouncement that “technically speaking, the recession is over.”  Yippee! Right?!?

After having fun with that, we reached into the mail bag and pulled out a question about which U.S. markets are “best” for appreciation right now.  Our crystal ball wasn’t warmed up, so we chatted on this one awhile.  It’s a question that comes up all the time and though easy to ask, it’s hard to answer.  So we talked about the conditions we look for to cause appreciation, how today’s economic environment affect them, and some specific markets we’re watching.

Another question that is salient to the times was about the availability of financing in today’s market.  There are certain product segments and demographics that can’t find financing, while others have abundant financing available.  Obviously, when you know where the money is flowing and why, you can position yourself in its path and do well.  Having just been at the Rich Dad Real Estate Summit with Ken McElroy, Robert Kiyosaki and several veterans of investing and finance, we had some fresh insights to share.

The next question was also all too common in today’s economy.  “I have a property that is upside down with negative cash flow, what should I do?”  As Kenny Rogers sang, “You gotta know when to hold ’em, know when to fold ’em, know when to walk away, know when to run.”  Lots of people are struggling with the issue of “strategic defaults” and its ramifications.  (Side note:  The Real Estate Guys wrote a free 18 page report What You MUST Know Before Attempting a Loan Workout to help people in this situation understand their options.

The discussion of  what to do with an upside down negative cash flow property had us reflecting on the previous discussion of where’s the appreciation most likely.  It also lead directly into another topic:  The Price of Maintaining You Good Credit.  Good credit has never been more important, but if you have lots of negative equity and negative cash flow, how much is it really costing you to maintain it?  This is a very timely topic and we tossed around our thoughts on the subject.

Listen Now:

  • Want more? Sign up for The Real Estate Guysfree newsletter and visit our Special Reports library.
  • Don’t miss an episode of The Real Estate Guys™ radio show.  Subscribe to the free podcast!
  • Stay connected with The Real Estate Guys™ on Facebook!

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.