Loss Mitigation contracts

[JoDee]

Once you are going through the loss mitigation process - is there a software that you would use, or certain docs we would need to have access to to complete the loss mitigation process? for instance disclosures or compliance docs? I mean I have Calyx Point - but am wondering if this would be like structuring a whole new loan - which I am assuming if we are modifying the loan - but I am wondering where / who the docs come from- the lender / counselor? weird question?

[877YouKeep]

Documents are very similar to what you use with a short sale:

2 paycheck stubs
2 years tax returns
2 months bank statements
hardship letter
document from company explaining what we want for a workout...
Authorization to Release
a few other minor docs

[JoDee]

soo -in end though- wouldn't there be an end HUD - provided by the lender? I am wondering in I would need to do GFE still - because wouldn't it in actuality be a modified loan / new loan? sorry - just sponging

[LossMitigation]

No a loan modification is not a new loan. There is no GFE nor HUD. There are mod docs that are to be notarized and if the capitalized amount is over $20,000.00 then it will be recorded in the homeowner county.

[JoDee]

sooo -do the docs "needed" come from the lender then? I don't come up with them? to give you a background - I am also a mortgage broker - and would normally be producing disclosures. who does those? if I do, where do I get them ? hope I am not making this more confusing. capitalized amount over 20,000 - not understanding - do you mean the amount that the ultimate loan amount is reduced by? sooo the mod docs - are they produced then (similar to a HUD?) by the lender, then "closed" upon with the title company?

[Mike Dolan]

There are no "required" disclsoures needed because it is not a regulated activity by the department of real estate or any governing body. So, hence, there are no required disclosures on behalf of the loss mitigator.

All that will be done is a verbal agreement on the phone and then a new "note" with the new terms will be sent to the client to be signed and notarized. That then is recorded with the county recorder as the new note for that mortgage.

[Becca/FL]

Hi Mike,

Notes are not recorded unless the mortgage is a purchase money mortgage or contract for deed. In my experience, a mortgage modification is signed, notarized and recorded in the public record. A new note is executed, but the note is not recorded.

[LegalLM]

Question to all how do you know what the governing policy is for the lender, let us say in a Subprime Mortgage situation as it relates to their loss mitigation process and whether what the lender as proposed is the best option and in your clients best interest?

I hope the level of sophistication offered her is greater then what the client could have done on their own.

Rick Carrara, LM Counselor

[877YouKeep]

whether or not a workout can be done is based on investor criteria, give me a investor and I will be able to provide a more concise answer. The workout depends on the agreement between servicer and investor the agreement is called an Pooling and Servicing agreement and it determines options available as well as contribution and fees that can be capitalized. On the other hand if the lender and the investor are one in the same it is called an asset loan and there are creative levels available. There are many more factors but these are the basics.

Be on the lookout for our Manual on Loss Mitigation comming soon.

[877YouKeep]

the only time a modification is recorded is if the capitalized amount plus the unpaid principal balance is in excess of $ 20,000.00 over the original note. That is it in a nutshell