Savings for House Payments: Yes or No?

There appears to be a shift away from lenders granting loan modifications despite all the news coverage to the contrary. I've noticed lenders refusing to grant short sales due to rising market values obtainable from REO (Real Estate Owned) property sales. In two separate instances, over the past 4 weeks, the foreclosing lender completed the foreclosure process in almost exactly the allowable minimum time. Not one postponement of the Trustee Sale during the entire process even though a loan modification was being considered. It's a disturbing trend for homeowners. The sequence goes something like this: the borrower spends months making payments on a loan using savings, retirement money, personal loans, everything but actual income, while trying to get a loan modification. After exhausting of all their cash the foreclosure process begins. The lender continues to have the borrower wait for a final answer on the loan modification. Then, within days of the actual Trustee Sale, the lender denies the loan modification. This leaves the borrower with no time to take another course of action, no cash reserves, and they end up losing the property to foreclosure in the end. To add a final sock-in-the-stomach the lender offers a Cash for Keys deal to have the homeowner move out in a timely way (timely for the lender). As if on cue while thinking about this issue today, I received a call from a very distressed homeowner. She, we'll call her Susan, recounted with fascinating detail a 16-month odyssey in pursuit of a loan modification with no success. Just as described above she struggled to make her $5,000 per month mortgage payment on a $1,900 per month unemployment income. Susan and her husband exhausted all their savings making their mortgage payments each month. They finally missed their first payment this past month, prompting a call to me. Frequently I am the referral of last resort. That aside, the real concern is, are lenders doing this on purpose or is it coincidental? Well, regardless of the answer to that question time will tell. If faced with a similar decision what should you do? Answer: if you have to use your cash reserves to make mortgage payments it may be a better plan to sell, and keep your retirement savings for just that.

Customer Service and Communication

Is it rude to ask for another customer service person if you're having trouble understanding the one you're talking to? After five or so voice prompts, a couple of hang up's, discontinued number responses, Ms. Techno voice and a few "Can you hold for 1 minute, please" interruptions to your very polite hellos, the answer is: no. I say this for two reasons. The first is when calling customer service the objective is to get one problem or another resolved. Obviously that will be harder to do if you first have to overcome the problem of being understood, and understanding the person you're talking to. In this world of outsourced customer service your call to customer service from San Francisco can result in your talking to someone in Thailand. It may not be PC but being understood is a necessity to getting the proper help. This is especially true when your real estate property is on the line. The second reason is: would there be any hesitation, by customer service answering operators, to transfer a call when the caller is not versed in the sane language of the answering customer service operator? Again the answer is no. If the customer service operator does not understand the caller, they don't hang up on the caller, right? The customer service operator gets someone on the line that can communicate with the caller. So why shouldn't the same procedure apply when you're having trouble understanding the customer service operator you're talking to? Answer: it shouldn't. I've frequently asked for a different operator when having trouble understanding the person to whom I'm speaking. What works every time is this question: "Due to the time constraints regarding this issue, can I speak with someone in my own time zone, California?" The answer to this question is usually yes. Then if the transfer still lands me in the hands of someone hard to understand, I specifically ask for a transfer to the state where I live. That usually gets the job done.