In today’s topsy-turvy market, you may find yourself needing to talk to your lender about more than just a change of address. Here’s how to minimize your headaches and maximize your valuable time while on the phone with your mortgage company.
Tip #1 – They’re all idiots.
While this is probably not true on an individual basis, you would do well to remember that your lender is not your friend, and treat the company somewhere between a hostile witness and an idiot. Speak slowly, be patient, and remember they often have (literally0 no idea what they are doing).
Tip #2 – The rules are changing almost daily.
Use this to your advantage – if you don’t like what they are telling you, look on the bright side. It may be different next week, or in the next department. On the other hand, if you like what you hear, be prepared to act on it immediately, since the program that works for you this week may be gone next week.
Tip #3 – The right hand doesn’t know what the left one is doing.
I spoke with 3 departments last week at Citibank, about a client’s loan mod. Every single person was lovely, and completely contradicted the last person. It’s not their fault. See #2, above.
Tip #4 – Make sure your workout package is complete.
If you want a loan mod, or a short sale, or a deed in lieu of foreclosure, to be approved, make sure you have all your paperwork filled out correctly, and all the supporting docs in place. They will not start your paperwork in process without it.
Tip #5 – File electronically if you can.
Once your package is together, try scanning it and eFaxing it to them or e-mailing it to them – submitting it online is faster, you can track when it was sent, and if they lose it (I have heard horror stories of people submitting the same package 6 times as their house inched towards foreclosure) you can hit a button and send it again.
Tip #6 – Get your authorization letters in.
If you are working with a realtor on a short sale for your property, or you are buying someone else’s property on short sale and need to speak with the bank, or are working with an attorney, the bank needs an owner’s authorization letter to talk to any party other than the owner. If they fail to send you the form in a timely manner (one of my clients called the bank 4 times, and each time was told the letter was forthcoming. It wasn’t) call them and ask them what it needs to say, and then write your own. It’s perfectly fine if it’s not on their form.
Tip #7 – Give yourself enough time.
Everyone you talk to at the bank, even when you are transferred to the wrong department accidentally, will need to ask you a series of qualifying questions and review the notes on the file. Don’t make things harder for yourself by trying to put in a call between meetings. You’ll just end up having to call back to start the whole process over. Also, the whole process will probably take between two and three months once your package is in. Plan for this amount of time at least. Whatever you are doing, make sure you start the process early enough so that you do not end up on the courthouse steps. The lender will give you more time if they see you trying to work out a solution. This goes for the houses you are trying to buy on short sale, so long as the owner requests more time.
Tip #8 – Take copious notes.
Note the name, ID number, and time and date you speak with every person at the mortgage company. More importantly, make sure they take notes on the account of every important step in the process. For example, if you submit your workout package, and they agree to delay a NOD because of it, make sure their notes reflect this – otherwise, you may call back in a week to find out that your file says, “Talked with owner about loan mod” and nothing more specific.
Tip #9 – Not everything they tell you is true. (See Tip #1 & 3).
In my conversations with Citibank, I was told my client’s loan mod would not be approved because he has a Fannie Mae or Freddie Mac investor loan. Someone else told me Freddie was ok, but not Fannie. Yet a third person told me both were fine, so long as Citi did a regular loan mod, and not the new HASP program Obama just approved. Two of these things will prove inaccurate – send me an e-mail if you want to know the outcome, but for right now, I’m just as clueless as they are.
Tip #10 – Get a lawyer. Or a realtor.
Decide what’s more important to you, your time and your peace of mind, or your money. Unless you can’t afford it, hire an attorney or a loan mod firm that uses attorneys, to fight the good fight for you. For between $2K and $4K, you can have most of the hassle taken care of, once you put in the paperwork. If it’s a short sale, the bank will often require you to use a realtor, and you would do well to have one anyway, since most of them are starting to have a lot of experience with short sales. Let them do the hard work and negotiate with the bank. Meanwhile, you can be out doing better deals.
In today’s unprecedented new world of short sales, pre-foreclosures, foreclosures, and loan modifications, remember this bonus tip:
Tip #11 – Always give more than you say you will.
And be nice to whomever you talk to at these giant conglomerates. No matter how frustrated you are, they have to have the same conversation over and over, every twenty minutes or so, for the next two or more years. It’s even less fun for them than it is for you. Good luck.