Even though mortgage and housing market news seems to be all negative, there are several opportunities to grow your business, particularly if you are helping homeowners with loan modifications. Homeowners are desperate for assistance. Meanwhile, bank and government programs are struggling to get the attention and reach all of those that are in need.

This offers enormous potential for those willing to work load modification leads and have the ability to offer consumers the help they so desperately need. If you are considering purchasing loan modification leads, there is no better time.

Let’s go over the basics of a loan modification sales process:

Loan Modification Sales Process

Step 1 – Contact the homeowner in need. First, create a marketing process that identifies likely loan modification leads, preferably in your local area area. However, there are large portions of the country in dire need to modify their existing mortgage loan , so don’t hesitate to broaden your market if you are appropriately licensed. Once you have your leads acquired, begin by contacting the homeowners directly.

Step 2 – Focus on stopping a foreclosure. If the homeowner moves into foreclosure-options become severally limited. So, your first order of business is to stop the foreclosure. No consumer wants the blemish of a bankruptcy or foreclosure on their credit history if they can avoid it, which means that you are likely to have a very attentive audience. Focus on the benefits of a loan modification and shape your pitch around their needs, not what is in it for you.

Step 3 – How a loan modification works. A loan modification is a renegotiation and restructuring of the terms of an existing mortgage. This solution benefits both the bank and the borrower saving the expensive nature of foreclosures and the homeowner’s home.

Step 4 – Guide the borrower through a loan modification. Your primary value to the homeowner is quickly and efficiently getting them to the right people and into the right program. Spend your time understanding and creating good processes to expedite all of the various loan modification programs available.

Things to Look Out For

Unfortunately, there are many loan modification scams–companies taking advantage of stressed consumers and it will be important to differentiate your business. Take the time to build a relationship with the homeowner so that they feel comfortable working with you. They’ve likely been through the ringer and may be a little hesitant until you can gain their trust.

Loan modifications are a great way to improve your business, but they must be handled carefully. By following these guidelines, you’ll be well on your way not only to a successful loan modification business, but also to helping someone who is in dire need of your assistance.

Related articles by Zemanta

• How To Do Loan Modification Without Losing Gobs Of Money (refinanced.blogspot.com)
• “Multi-Agency” Crackdown on Housing Fraud and Scams (hsh.com)
• Avoid These Loan Modification Scams (refinanced.blogspot.com)
• Reader: How Do I Make Use Of the HASP? (hsh.com)

However, some of the biggest challenges occur once you have the client in front of you or on the phone. This is when you have to structure a workout that the homeowner’s lender or servicer is likely to accept.

I found a great blog post on BlownMortgage.com on how to calculate Loan Modification DTI to improve your probability of structuring a successful loan workout.

Here is the introductory demo video:

Take a look at BlownMortgage.com for more information on this loan modification teaching program.

CALL 949-861-3122

Let’s get specific on what is working…try these mortgage lead filters:

• 80% LTV and above
• No poor credit
• $200,000 mortgage balance/loan amount and above
• Adjustable rate (where provided)
• High interest rate (where provided)
• States in the most pain (FL, CA, IL, MI, OH)
• Behind on payments (where provided)

Why aged leads and not the new loan modification leads?

Simple–loan modification leads have only been available and in the lead generation game for about 3-4 months. Chances are both consumers and marketers are just figuring out what loan modifications are–this leaves a lot of loan modification prospects dropping into the aftermarket or unserved category of aged leads.

As it is very hard to find loan modification leads over 3 months old, that means buying loan modification leads will mean having to pay a higher cost per lead and some call centers need tremendous volume for pennies and this is why refinance leads that suggest someone likely to be a good loan mod candidate are often the solution. While we do not sell them, aged payday loan data and triggers are another way call centers are keeping their cost per lead at just pennies.

This strategy works particularly well if your business model uses thousands of leads to feed a dialer sales organization or call center. Meanwhile, you get to keep your costs to $0.01-$0.25 per lead for 3 month to 3 year old mortgage data.

These filters will help you to target homeowners making refinance inquiries on the edge of trouble. This is the classic profile of someone likely to experience hardship, but has not yet declared bankruptcy or received a notice of default.

CALL 949-861-3122

Gather Up the Loan Modification Programs

There are more and more each day. Starting with the FDIC benchmark program at IndyMac Federal Bank, implemented upon the FDIC seizure of that bank, study each of the principles in these programs. This will give you a foundation to advise clients on loan modifications based on where their current mortgage is serviced.

• FDIC/IndyMac Federal Bank
• FHFA/Fannie Mae & Freddie Mac
• Citigroup
• JP Morgan Chase
• Bank of America/Citigroup

Start with Government Assistance

Build you mortgage loan modification education on government assistance programs and information. The various agencies have already built enormous libraries of information about not only their loan modification programs, but also government assisted mortgage refinance.

You client may be better suited to refinance that distressed mortgage (especially as mortgage rates plummet) than to work out their current mortgage.

• Hope for Homeowners
• Hope Now
• FHA/HUD
• FHASecure

Educate Your Clients on Avoiding Scams

This should be your top priority. As loan modifications become mainstream there will be lots of scams and opportunists–not unlike the predatory lending that got us into this mess. Add value to you clients by keeping them on the alert.

Other Related Loan Modification Articles:

• Guide to Mortgage Loan Modifications
• Picking a loan modification program
• Mortgage Loan Modification Primer for Mortgage Industry
• Could Mortgage Loan Modifications Prevent Foreclosure?
• Loan Modification Software

CALL 949-861-3122

(photo credit: wealthyaffiliate)

Understanding Loan Modifications

Doing loan modifications are not that unlike counseling for a mortgage refinance. In fact they are often called modified refinance.  Your objective is very similar to  mortgage refinancing. You are helping a homeowner achieve a more affordable mortgage payment.

The difference comes in when a borrower is constrained in their financial hardship to the mortgage they have. Often they are in a position that prevents them from doing a traditional refinance. For example, their income has changed, the current ARM has adjusted and increased the payment, or their home has depreciated.

This leaves the borrower with loan modification as their only option, with a modification being the change in the original mortgage terms. Often it includes the following changes:

• Change from an adjustable rate to a fixed rate mortgage
• Reduction or temporary freezing of mortgage interest rate
• Extension of amortization term and maturity date
• Reduction in unpaid principle balance
• Few month extension before commence foreclosure proceedings

What is the Objective of a Loan Modification?

The objective of a loan modification for the borrower is simple–obtain a payment that they can make every month.

However, for the lender the objective of the loan modification is a bit more complex. This is where your negotiation on behalf of the borrower should add value. To make this easier most loan modification programs are setting a “benchmark ratio” or debt-to-income ratio that defines “affordable payment.” Most are being set at 38 percent.

Banks and servicers are focused on a few key points in the loan, and so should you be in negotiating:

• Regular and timely payment
• Current income (this is particularly important to securitized [servicer] assets)–this is the interest portion of the homeowners payment
• Minimizing write-downs or current losses in the mortgage

As an experienced loan officer you should be able to propose a restructuring of the loan that balances the best interests of all parties.

Who Can Offer a Loan Modification?

This is also a very important part of your loan modification business. The only people that can “do” a loan modification for a homeowner is the bank, servicer(s), or investor(s) that are holding the loan. Unlike a mortgage refinance you can not shop around for the best bank deal. A consumer or a company operating on behalf of consumers (usually required to have legal counsel) must contact one of holders of the original loan and attempt to negotiate a loan workout.

Therefore, it behooves you to build strong relationships and contacts with the top entities currently offering loan modifications to their mortgagees:

• IndyMac Federal Bank
• Citigroup
• JP Morgan Chase
• Bank of America/Countrywide
• Fannie Mae and Freddie Mac

You should also familiarize yourself with the parameters of each of these programs. Each is slightly different. The more familiar you are the more streamlined the process can be for your loan modification client.

Aged leads can be full of opportunities to educate consumers about the benefits of a loan modification. Most mortgage brokers and debt counselors don’t understand these important solutions for borrowers getting pinched in a bad economy.

Even if your aged leads have been contacted you are more than likely a fresh, better solution for their financial needs.

Mortgage Refinance

Consumer credit is getting tighter and tighter. More borrowers are being turned away without any hope. These homeowners are stuck with adjusting interest rates, ballooning principle, or lost jobs and no hope of refinancing.

However, they are not without options–their mortgage brokers just don’t understand loan modifications. This is where aged mortgage leads can send you in like the knight in shining armor. Educating them on how to save their homes and get back on their feet.

Debt Settlement

Aged debt leads give you the same opportunity. This customers are probably looking for debt relief because of a mortgage problem, but they are being turned away because many debt companies don’t have a loan modification program.

Picking up a batch of of aged debt leads is certain to have numerous loan modification opportunities. Make sure you listen for the consumers’ real debt source and challenge. Chances are you will find an adjusting mortgage payment or lost income that is putting them behind on a big mortgage.

Even the FDIC Recommends Loan Modifications

Making this an even bigger opportunity is the fact that many of these consumers have never even heard of a loan modification. They may have even made their online inquiries prior to this being a viable option. Only recently did the FDIC start to really push this concept. Their success working out thousands of borrowers in Bank of America and IndyMac Federal Bank’s default mortgage portfolio put mortgage loan modifications on the front page.

Scoop up a few aged leads today and dig in for some great loan modification success stories.

—

Next Wave Marketing Strategies brings over 5 years of integrity, innovation, and client satisfaction to the aged mortgage leads market. We offer industry leading quality control, data cleansing, and a generous return policy to empower you to build your business in the fastest, most cost effective manner. Learn more about aged mortgage leads.

However, here is a word of caution. When looking to shave cost from your marketing budget avoid short-cuts and gimmicks, they will ultimately cost you more and yield little. In contrast, the key to developing an economy marketing plan is to look for pockets of inefficiency in traditional marketing. Here are a few gems most neglect:

Create and Own the Local Mortgage Web

Web technology is getting easier and easier to use. Even a non-technical person can get up and running on the web with cheap or even free blog services like:

• Blogger
• WordPress
• TypePad

Set-up one of these simple websites and start talking about your local mortgage and real estate market. Before you know it you will start becoming the top Google search listing for your local mortgage and real estate business. Add to this free professional mortgage news, information, and rates using a variety of mortgage calculators and widgets and your website will have the credibility and authority of much bigger websites.

These larger mortgage websites are forced to focus on national volume and neglect the little local markets. Yet, these are exactly the people you want to serve.

Marketing inefficiency number 1.

Buy Aged Mortgage Leads

On to the next pocket of mortgage marketing inefficiency–aged mortgage leads. Big mortgage companies buy thousands of leads a day, but mortgage lead providers often over compensate demand. This leaves hundreds of customer inquiries a day unplaced and customers unserved.

These mortgage leads quickly drop in value as they age, but the customer is still looking for help. The opportunity for your mortgage business is that as these customer request age their lead price drops dramatically. However, their interest in getting a mortgage is still very much intact.

Developing an efficient way to buy and work these aged mortgage leads is a surefire way to close more loans each month for a fraction of the cost of buying real-time Internet leads. The extra benefit of course is helping a customer that would have otherwise been abandoned–talk about a loyal and trust-based relationship.

Marketing inefficiency number 2.

Don’t Forget Your Past Clients

Here is my favorite marketing inefficiency to harvest in hard times–your own customer database. So often we forget that our own customers have changing and evolving needs. The economy has been in radical change over the last several months. I will guarantee that many of your clients have a completely different financial picture.

Dig into your mortgage CRM or lead management software. Pull out these prime leads–call them, email them, ask them if their current mortgage financing is still appropriate. More importantly ask them if their mortgage financing can protect them from a long economic decline. This can also be a perfect opportunity to capture loan modification leads.

Marketing inefficiency number 3.

Times May Be Hard, But Continue Marketing

Times are certainly hard, but don’t forget marketing is how you touch prospective clients in need. So, don’t stop doing it. Just reposition your marketing to hit pockets of value, saving money without hurting sales.

—

Next Wave Marketing Strategies brings over 5 years of integrity, innovation, and client satisfaction to the aged mortgage leads market. We offer industry leading quality control, data cleansing, and a generous return policy to empower you to build your business in the fastest, most cost effective manner. Learn more about aged mortgage leads.