Robert Rinehart asked:




There is a new type of Home Loan Modification coming soon to your city. This one promises to be easier, faster, and more beneficial to you. You won’t need to worry about HAMP or hardship letters or 31% debt-to-income ratios any more. The new home loan modification is a reduction of the principal balance of your loan and it’s a direct result of the dramatic revelations of lender mistakes and abuses that have come to light in September and October of 2010.

The biggest mistake lenders made was using MERS to register the sale of loans in the secondary market. We have coined the term the “MERS Charade”. Using MERS or the “Mortgage Electronic Registration System”, lenders bypassed the legally required process of tracking sales of mortgages to a new owner. The seller of a mortgage is legally required to file a “Notice of Assignment” at the county recorder’s office. But lenders realized the cost of these recordings would reach several hundred million or perhaps billions of dollars. So, they created MERS to keep track of mortgage sales. This, however is illegal, and has resulted in foreclosures being vacated by the courts.

If your loan was registered in MERS, it’s likely you can get a principal reduction on your loan. There is no “qualifying” for a MERS principal reduction as there was with a federally sponsored HAMP loan modification (HAMP stands for Home Affordable Modification Program and is the federal government program for interest rate reduction loan modifications). You simply negotiate with your lender to have your principal balance reduced.

There is no more hardship requirement, no more income qualification, no more “trial” modification. You don’t have to wonder if your lender is going to arbitrarily deny you for reasons you can’t fathom. It does help the negotiation process if you are underwater to some extent, but this is not required. Also, you don’t have to be behind in payments. You simply approach your lender with your negotiation request and find out what they’ll be willing to negotiate.

Of course, it’s never going to be that easy. Your lender isn’t going to just roll over right away. You have to be persistent and present your situation from a legal perspective – make them see that you know the law and why your loan is no longer secured by your home. It’s only when faced with a credible threat of lawsuit that they will be willing to negotiate. The good news is that the lenders know they have no recourse now and are more willing than ever to salvage something out of what is so obviously a terrible situation for them.

If you don’t possess the legal expertise or time and effort needed to see your home loan modification negotiation to the end, you can get help from reputable loan modification companies. Look for a loan modification company such as Loan Modification USA that has a 100% money-back guarantee for their work and will let you see the status of your negotiation in real-time using a web portal. You can also click the following link to find out if your loan is a candidate for a mers loan modification resulting in a principal reduction on your home.

Tyrone

Kristin Abouelata – Home Loans asked:


As you’re sitting across from your mortgage lender who is going over, line by line, the charges and fees associated with your loan, he/she mentions MERS.  It’s only costing you $4.95, so you don’t pay particular attention to it.  I mean after all, $4.95 is nothing compared to the state tax stamp fee or other line items you see.  But, aren’t you curious as to exactly what MERS is?  At face value it sounds like something you should get an inoculation to avoid.  But in actuality, it’s a little system that has revolutionized the mortgage industry.

 

MERS is kind of like a microwave.  You never knew how much you depended upon it until you consider taking it away.  Seriously.  Our microwave was broken for a short period of time, and I couldn’t believe how much we used it or how much it simplified our lives.  Half the food I cooked became a real trial to prepare the old fashioned way. Not to mention heating up leftovers. Ironically, it’s a very similar situation for the mortgage industry if they had to do away with MERS all of a sudden.  It would be perplexing, annoying and time consuming.

 

MERS stands for Mortgage Electronic Registration System. If you visit the MERS website (www.mersinc.org), you can read their overview: “MERS was created by the mortgage banking industry to streamline the mortgage process by using electronic commerce to eliminate paper.  Our mission is to register every mortgage loan in the United States on the MERS (registered trademark) System.”  Nice.  Everyone likes paperless systems these days.

 

In the old days, if you sold a loan on the secondary market, you had to assign the mortgage to the new buyer.  You created a paper assignment and recorded it at the courthouse.  If there was an error on the assignment, you had to correct it (have it initialed by the appropriate parties) and re-record it.  Then you sent this original recorded document to the new buyer for them to keep.  If they in turn sold the loan, they had to prepare another assignment, record it and forward it, along with the first recorded assignment, onto the new buyer.  And so on and so forth.  Lots of paper being printed, recorded, regenerated and reconstituted.  MERS came up with a fabulous system to eliminate this nightmare.  Now, when you sign a mortgage, MERS assigns a unique identifying number to that mortgage.  The lender, upon closing, registers the loan with MERS to show it exists.  Then, any transfers can be done electronically.  The mortgage servicing and mortgagees can also be tracked electronically, which allows for title searches to be streamlined.  It’s a beautiful thing.  This system has saved a lot of time and energy for the industry.

 

However, if you were to tell a mortgage operations person that MERS was going away, and they were going back to paper assignments, it wouldn’t go over well.  They would probably be at a total loss.  Sort of like tossing someone a bag of popcorn and telling them to cook it without a microwave.



RUDY