The Next Step in My Financial Education
October 12, 2011 in Finance
The lack of a quality financial education plagues society. As I wrote previously, those who understand the financial game often benefit at the cost of those who don’t. As a result, many people struggle to make a living when it doesn’t have to be that way.
For example, when the home loan modification program was first introduced, everyone told me I couldn’t get a loan modification because my loan was current. After asking many questions, I learned there was a way to do it and I got it done in spite of experts telling me I couldn’t.
My financial situation changed drastically over the past few months and I wondered if I could get another modification. Everyone told me this wasn’t possible since I previously received a modification. Then, I heard through a casual conversation that an additional modification is possible just twelve months after receiving the first one.
When I called my lender to ask about it, they told me this wasn’t possible, as long as I had a loan modification currently in good standing. This carefully worded phrase held a clue so I decided to talk with those who share our house and explain the situation.
I told them that I had reason to believe that if we didn’t make payments for two or three months, that the mortgage would achieve a “bad standing” status and we could possibly get a loan modification. Unanimously, everyone said, “Quit making payments.”
I explained that we could lose our dream house to foreclosure and the response was the same.
“Quit making payments.”
This goes against everything I’ve ever done in the past. However, it made sense, especially if this is what it would take to reduce the loan interest rate.
So, early last month, I requested the loan modification paperwork, completed it, and sent it to the mortgage company. Then, I called the mortgage company to tell them the news. The call went like this.
“Hi, I’m calling to tell you I have just submitted the paperwork for a loan modification and I won’t be making a payment until you approve it.”
“Oh, I’m sorry. We must deny this modification because you have a modification that is currently in good standing.”
“I understand. Therefore, we will not be making a payment until you give us a new loan modification. You can decide when the current modification is no longer in good standing.”
The representative realized what I was doing and said through a chuckle, “Please, may I put you on hold? I need to talk with a supervisor.”
After a few minutes, the call resumed and the representative still had a chuckle in his voice.
“Mr. Matthew, I’m sorry. We must deny your modification because you have a modification that is currently in good standing.”
“I understand. Therefore, we will not be making a payment until you give us a new loan modification. You can decide when the current modification is no longer in good standing. It doesn’t matter to us how long this takes. I just want to be honest and upfront with you about our plans.”
The representative continued to suppress laughter before asking, “Is there anything else I can help you with?”
“Yes, please put a note on my account so that anyone else who calls in an attempt to collect will understand what it takes to resolve this situation.”
“I will do that Mr. Matthew. Have a good day.”
This call repeated a couple of times until our first payment was thirty days late.
Then, I received a different call.
I’ll tell you about that conversation in a future article.
Would you be willing to risk foreclosure if you could reduce your mortgage payment by fifty percent?