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December 2011 Ten Reasons Why You Should Not
Do Your Own Loan Modification By Morton Grabel, Esq.
“Don’t try this at home.” We all have heard this old cliché. Dealing with banks
really brings this warning home! With their number one motivation to maximize profits so to keep their stock prices high, giving you a discount is much more than “pulling teeth.” So, here are 10 important reasons why it can be foolish to try this on your own.
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You are emotionally invested in your home and lenders can smell fear far bet- ter then dogs. When it is personal, you cannot help but get defensive. My hat goes off to those rare few who have been able to stifle their emotions and turn on the analysis and do it themselves. More often then not our emotions give the calculating adversary the edge
Negotiation is a learned skill. To weather the flow of offers and counter of- fers, a plan and a strategy must be followed. Knowing when to give and when “not to blink,” is usually best done by trained professionals. They know what it takes to win.
The banks will fight you before agreeing to a reduced payment. Your lender is not going to voluntarily give up a large amount of money over thirty or forty years. They have to answer to stockholders and have you looked in the paper lately? Whoa.
They do want to take your home. They say they are “here to help” but they have already made up their minds in advance. The friendly voice that says “just send in your bank statements one last time” is pretending! The new phrase is “pretend and extend,” maybe get some Trial Plan money, and then take the home.
Experienced negotiators know if the bank’s offer is “as good as it gets.” There is no Kelly Blue Book for how much of a lowered interest rate still allows the bank to make a profit. It is hard to know what truly is a good deal. Is that really an 1850 dresser or a knock off?
Banks prefer working with someone who speaks their language. They cannot make a decision without a complete application, and only a professional can fax the same thing eleven times without blowing a fuse! Seriously, profes- sionals at the bank prefer dealing with other professionals. Don’t take a knife to a gunfight.
You must force the banks to say yes. The reasons the bank must say yes, usu- ally the Home Affordable Modification Program guidelines and their own in- house policies, must be shouted from the roof tops. Banks have more excuses than I had for not turning in my homework
The banks know after a long run around you will give up. It’s true; the aver- age underwater homeowner can only take so much. The long slow pace of the bureaucratic process is more frustrating then twenty pulls on my lawn mower cord, even tempting me to give up, and I am a bull-dog that never cries “uncle.”
Sound financial reasons must be clearly shown. Their formulas and ratios are extremely complicated. Like a CPA paints a tax return, the skillful negotiator confidently marches to the end zone. Score!
The stakes are too high. If you lose, you lose your home. The car can still sputter, the sprinkler head still drip, but there are no “do overs” in eviction court.
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