What's FICO Scores All of a Sudden?

People ask me all the time if I have any idea where the federal bailout money is going. Will they really help homeowners or is the money going to stay at the highest levels of corporate America. And where is this money coming from?

Some of the answers remain unclear, but we are facing an even greater problem, which is perpetrated by these same lenders who seek bail out money. Their greed and inability to see the whole economic picture will solidify their demise.

Of course every taxpayer is going to be on the hook for this money. It has to be repaid somehow and it will. If not in hard goods, then repayment will occur in lifestyle changes.
If you’re wondering how the mortgage bailout is going to help everyday citizens, consider that the rules may have changed, but the people making the changes are still the lenders. If you want to apply for a Mortgage Loan Modification, you still have to follow the rules set forth by your lender.

I haven’t seen any mortgage principal reductions and even getting a lender to respond to cries for help is difficult unless you’ve already missed a payment. Concerned with their bottom line, lenders can’t see another segment of the population ready to take the stage. Take the following situation.

A friend of mine is upside down on his second home by $100k. His adjustable loan is getting ready to adjust upwards and he is very concerned. He is doing well at his sales job, despite a weak economy, but he is concerned that he will use all his reserves by debt servicing a home that will take forever to regain any equity.

Six months ago, he and his wife decided to rent the home and have thus become long distance landlords. Still, the rent they collect isn’t enough to fully pay the existing loan and he is tossing nearly a thousand dollars in each month. The thought of running out of money is causing sleep loss as well as tension within his family.

At my recommendation, he contacted his lender and as I instructed him to do, he asked for the Loss Mitigation Dept. Twelve tries and two months later, they still haven’t returned his call. He’s begging me to prepare a loan modification package for him, but he doesn’t want to damage his 790 FICO score and is wondering if he should stop paying the lender. Surely, they’ll return his calls then.

I wouldn’t advise anybody to miss a mortgage payment. The main reason is that these payments may have to be made at some point in the lifetime of the loan. To fall behind on mortgage payments can have drastic effects on your financial health, but what should he do?

It’s common knowledge that lenders won’t respond to pleas for help from homeowners until a payment is missed. This thinking has to change and to adhere to the rigid principles of the past is only forcing homeowners with good credit and solid intentions to join the throngs of those already in foreclosure.

If you want to apply for a loan modification, the first thing you're going to need is a hardship letter. You can get a Free Hardship Letter at our website.