Mortgage Modification 101
by Mike Rockwood

The nature of the economy these days is having an impact on many people, including on their ability to continue to make their agreed-upon home mortgage payments. Many people are struggling to meet these payments, sadly. But there are a few programs they can take advantage of, including loan modification. What to know about this program can be important to those paying on a mortgage, in fact.

Many people fail to take advantage of these programs because they mistakenly assume that a loan modification is something they wouldn’t be able to obtain, for various reasons. But with the government now in the loan modification game, it’s the case that many do, in fact, qualify. With a new, lower monthly mortgage payment, many more people are able to stay in their homes, which is a happy circumstance.

Understand, first of all, that these modifications are basically a way of asking the lender to completely change the terms of the loan. For the person holding the mortgage, it’s essential that the new terms are favorable enough to result in a lower monthly payment. Usually, this will mean that the lender is agreeing to write off a portion of the loan in order to lower the monthly payment.

Now, most lenders — because they’re in the business of making money — wouldn’t normally agree to do such a thing but they’re staring at huge numbers of possible defaults and foreclosures. Because of that they’re more amenable to a modification than would have been the case just a few years ago. And with the government also helping out, many are more willing to try to work something out as well.

Many lenders have also set up their own private modification programs, which should come as welcome news. If a person holding a mortgage doesn’t qualify for the government version, he might be able to qualify for a private lender version. It might not have as generous a term setup as the government program, but it should still result in a lower payment nonetheless.

It’s always much smarter to contact a lender about a modification at the beginning, when financial hardship first begins to rear its ugly head, than at the end when the loan is so far gone and into default that there’s almost nothing that can be done about it other than foreclosure. Taking care of the issue at the beginning might also result in more favorable new terms than waiting, for what it’s worth.

There’s usually a significant amount of paperwork involved when it comes to getting a modification, so keep that in mind. At minimum, the government will require a detailed hardship letter in which the reasons for why the modification will be needed are laid out. As well, extensive income documentation — showing that enough income exists to pay the new loan — will also need to be provided.

Home loan modification should be considered whenever circumstances arise that might prevent a person from making his regular monthly mortgage payments. Remember, though; there needs to be documented income coming in that will cover the new, modified home loan and there also needs to be at least a hardship letter submitted with the application. 

Thousands of homeowners apply for a HAMP mortgage modifications every day. With those applications, for thousands of honest and hard-working Americans go their best hopes of keeping their homes. So, shall we say this is just a little bit important?

Yet the vast majority of applicants who review their application with me prior to submittal make errors in the Income Section of the application. That’s right, they get their own income wrong! Since my advice is to not submit an application with even a zip code error, this one really “gets my goat” (you know that’s a racehorse term, right?).

Here’s my advice about the income section of your mortgage modification application:

1. Include the right household income. That is, you must include the income from the parties singed on the loan. Any other household income need only be included at your discretion. So, even if your spouse, partner, significant other or adult children or parents contribute income, you need only include their income if you decide to.

2. Calculate your income correctly. You may laugh at this but MANY people miscalculate their own income! Common errors are using net instead of gross income, confusing bi-weekly with semi-monthly paydays and using last tax year’s income instead of the most recent past 90-days.

Show your calculations right on the pay-proof. That is, show exactly how you extrapolated and calculated. That way, they understand and, hopefully, agree.

3. Document your Income extensively. I say extensively because I recommend you go beyond what is normal or expected. Think of it as an actual loan application and document it like it’s going straight to underwriting. This includes, notarizing self-employed P&L, including annual award letters AND check stubs for SSI and EDD income, Attestation Statements (signed and notarized) on bank statements when used to show deposits to document cash earnings, etc.

Sure, some of these measures are beyond what the bank requires, but the requirements are met by the hundreds of thousand s of others in line ahead of you. Your application has to stand out and be bullet-proof.

4. Augment your income, if you must. If your income is insufficient to qualify for the modification (if your DTI is just too high, then you have to augment your income or give up. To apply when your ratios are off is a waste of time.

Some ways my clients have augmented their incomes in order to qualify include:

• If self-employed…use your best period!!
  
• Rent a room
  
• Rent a garage
  
• 2^nd job
  
• Kids pay rent
  
• Parents pay for care, driving, room, etc.
  
• Contribution Letter from Others
  
  • Notarize it
    
  • Include proof of funds, income
    

5. Reduce your income, if you must. That’s right, some folks fail to qualify because their mortgage payment is too small a percentage of their household income. They actually have to reduce their income!

Some ways my clients have reduced their incomes in order to qualify include:

• Remove income from any household member not on the loan
  
• Scrutinize untraceable income…like tips
  
• Remove “at risk” income…like bonuses based on company performance    
  
• Scrutinize expense items on self-employed P&L
  

 

Get the Income section of your mortgage Modification right and you have a solid base on which to build a winning application.

 

Mortgage Modification 101
by Mike Rockwood

The nature of the economy these days is having an impact on many people, including on their ability to continue to make their agreed-upon home mortgage payments. Many people are struggling to meet these payments, sadly. But there are a few programs they can take advantage of, including loan modification. What to know about this program can be important to those paying on a mortgage, in fact.

Many people fail to take advantage of these programs because they mistakenly assume that a loan modification is something they wouldn’t be able to obtain, for various reasons. But with the government now in the loan modification game, it’s the case that many do, in fact, qualify. With a new, lower monthly mortgage payment, many more people are able to stay in their homes, which is a happy circumstance.

Understand, first of all, that these modifications are basically a way of asking the lender to completely change the terms of the loan. For the person holding the mortgage, it’s essential that the new terms are favorable enough to result in a lower monthly payment. Usually, this will mean that the lender is agreeing to write off a portion of the loan in order to lower the monthly payment.

Now, most lenders — because they’re in the business of making money — wouldn’t normally agree to do such a thing but they’re staring at huge numbers of possible defaults and foreclosures. Because of that they’re more amenable to a modification than would have been the case just a few years ago. And with the government also helping out, many are more willing to try to work something out as well.

Many lenders have also set up their own private modification programs, which should come as welcome news. If a person holding a mortgage doesn’t qualify for the government version, he might be able to qualify for a private lender version. It might not have as generous a term setup as the government program, but it should still result in a lower payment nonetheless.

It’s always much smarter to contact a lender about a modification at the beginning, when financial hardship first begins to rear its ugly head, than at the end when the loan is so far gone and into default that there’s almost nothing that can be done about it other than foreclosure. Taking care of the issue at the beginning might also result in more favorable new terms than waiting, for what it’s worth.

There’s usually a significant amount of paperwork involved when it comes to getting a modification, so keep that in mind. At minimum, the government will require a detailed hardship letter in which the reasons for why the modification will be needed are laid out. As well, extensive income documentation — showing that enough income exists to pay the new loan — will also need to be provided.

Home loan modification should be considered whenever circumstances arise that might prevent a person from making his regular monthly mortgage payments. Remember, though; there needs to be documented income coming in that will cover the new, modified home loan and there also needs to be at least a hardship letter submitted with the application. 

This is a transcription of a live WebTV program in July 2010. Ryan and Mike are fielding questions about missing mortgage payments as part of the loan mod or foreclosure workout.

Ryan Rockwood:  Hello everyone and congratulations.  You have arrived at the call.  You’re in the right spot.  This is the 60-Minute Loan Modification Insider Secret Teleconference Series.  We’re here to beat the bank, to save your home, and help you escape bad debts forever.  My name is Ryan Rockwood.  And as usual, I’m joined by my father and business partner, Mike Rockwood who is kind of breathing into the microphone a little bit there.

Mike Rockwood:  Yes, I think I got to figure out now.

Ryan Rockwood:  Okay.

Mike Rockwood:  Thanks.  Hi, everybody.

Ryan Rockwood:  Before we begin a couple of announcements.  This is a first of our client’s only teleconference series.  As always, we’re adapting and changing the way we do business to better serve you.  And we hope that this smaller, more advanced teleconference each Thursday will prove to be a value to all of you, all right.  Announcement number two, here is something to think about with your lender.  If at first you don’t get the answer you want, try, try again.

Mike Rockwood:  And again.

Ryan Rockwood:  Yes.  Do your best not to get emotional and not to get frustrated that the person on the phone is being slow, rude, or just playing stupid.  Sometimes, you get representatives that are great but most are overworked and undertrained and many say things that are just not true.  I got to say it’s hard to not be emotional.  I mean, I’m not saying you’re going to be a sobbing mess.  But, you know, when it’s me and my property, I get kicked off and I guess that’s the emotional thing.

Mike Rockwood:  Right.

Ryan Rockwood:  Whenever I say emotional, I think it’s about – yes, screw this.  I don’t need this in my life.  Yes.  Yes.  I don’t need this in my life.  But the price doesn’t go to that person, right.  The price goes to the person who can live to fight another day.  They’ll say things like we’re currently not accepting loan modifications from fixed rate loans or things like, “We don’t have a program for people like you.”

Mike Rockwood:  Or you don’t qualify and I can’t tell you why.

Ryan Rockwood:  Yes, or you know there’s some program that’s probably coming up next month that’s going to be good for you.  Call back.  In some cases they will be telling you the truth.  But it’s wise to be skeptical.  Ask, ask, and ask again.  Keep your cool, be polite.  But make sure you’re not getting bumped out of the line just because some trainee happened to answer the phone when you call.

All right also, all of you on this call owns our 60-Minute Loan Modification kit, which means you have critique coupons.  Now, those coupons are good for a full review of your budget at hardship plus a 20 minute one-on-one coaching call with Mike.  So, because of the time constraints, we really can review only one property.  But if you’ve got more properties and you really need help, we have upgrade packages that are completely reasonable and could make a big difference to you.  But of course, if it’s multiple loans on the same property, of course you know, we’ll do everything we can to help you there.  So for more info, e-mail help@60minuteloanmodification.com.

Mike Rockwood:  And Ryan, I got to say that a couple of times this week, I had clients say “Listen Mike, I want you just to forget about the charges because we do have a small fee that I add on when we go over the 20 minutes.”  And a couple of clients this week said, “Hey, just forget about that.  I’d gladly pay for increments of additional 30 minutes.”  Or the way we charge it is 20 minutes at a time and it’s so incredibly reasonable.  But a lot of folks just like to talk issues through and get opinions on this and what do you think about this?  My brother-in-law said that, et cetera, et cetera.

Ryan Rockwood:  They say you’re too quiet.  So, could you move – I guess move it up a little bit or something.

Mike Rockwood:  Yes.  Got it.  Got it.

Ryan Rockwood:  Okay.  The thing that strikes me as, I don’t know, interesting is that a lot of times on the phone, I hear you and me repeating the same things we say here.

Mike Rockwood:  Right.

Ryan Rockwood:  And I think that’s okay.  It’s just a matter of getting it through your stall, getting it or your mind wrapped around it.

Mike Rockwood:  Sure.  Yes, that’s right.

Ryan Rockwood:  Yes.  Okay so anyway, let’s get on with tonight’s call.  Before we do, we might have to swap out your phone or microphone apparently.

Mike Rockwood:  Oh, is it still too quiet?

Ryan Rockwood:  This is terrible.  Why don’t you actually say a little bit here and I’ll try to…

Mike Rockwood:  Okay.  Hey, you know, I’m noticing that you’re forgetting to announce when we have live events and we’re having quite a few live events.  And we do have another one coming up on Monday.  So any of our clients that are on the line that in the Southern California area, we’re having a live event on Monday night upon Silver Spur Drive on the Palos Verdes Peninsula.  So, keep that in mind anybody in the South Bay area.  It’s an hour and a half of really running through the loan modification process really intensely and then we take some time for questions and answers.  So, sometimes live events are kind of fun.

Ryan Rockwood:  Okay, well, the people on the call say that it sounds like you’re in a cave.

Mike Rockwood:  Oh.

Ryan Rockwood:  So, why don’t you swap out that microphone because I think that’s the new variable and I’ll just sing and dance here for a sec and amuse everyone in the meantime.  Let’s see, what’s the latest in loan modification?  Still, battling with Countrywide, haven’t had any success with them and accepting people who are, I guess, not late yet.  No, and that’s the big problem.  Finally, I’ve got this client that I’ve kind of been telling people about from week to week.  And finally they’ve decided to go late.  Each week I’ve been telling them, “I think that if you just hold out, we can probably – Countrywide’s probably going to give in and you don’t have to go late.  Finally that you said enough.  So anyway, still frustrated with that, but however, we are seeing loan modifications get faster and faster.  And in particular, a lot of the applications are getting more and more streamlined.

Mike Rockwood:  Oh boy, is that the case.  Now, see if this might work better now.

Ryan Rockwood:  Okay.

Mike Rockwood:  All right, now, that is definitely the case.  In fact today we went up on IndyMac’s new software online with the client to fill out their application and wow, they have really got a good system.  You know, it’s interactive.  There’s somebody online with you working through your budget.  Put it all together.  You get to see the totals and the ratios, and things like that.  So, it’s really, really getting good.  But you know the better and better the banks get at it, the more and more placed to our do-it-yourself program because you really – this process is getting easier.  But that doesn’t mean you don’t need the street smart tips to know what the right answers are and how to craft your budget and craft your hardship letter to fit in and hit the target, right?

Ryan Rockwood:  Well, you know the thing that I wanted to let people know is that in some ways, the super easy forms we start checking boxes, can actually – well people could start falling under the same traps they do when a person who deserves a loan mod calls and gets rejected immediately.  In some ways, you have to remember that even if they don’t want your budget, you’ve got to have that thing filled out because it’s going to come up.  And if they get too easy, they can low you into [Indiscernible] or this will just sail through.  That’s not going to happen.  It will sail away and they’ll refuse you out of hand.

Mike Rockwood:  Yes.

Ryan Rockwood:  Anyway.

Mike Rockwood:  And you know, just because loan modifications are getting a little faster now that the lenders are starting to make a little headway in terms of staffing and systems and stuff, at the same time rejections are getting faster and they’re rejecting you out of – really fast.  So, you were succeeding fast and failing fast.  But yes, you’re ready for me to move on to the topic for tonight?

Ryan Rockwood:  Well, I have one more thing I want to say because I get excited when I think of something.  I wanted to tell people that there are ups and downs.  And that it’s to remind people that it’s absolutely not fair because we have one client this week, heartbreaking week, lost the house, not only lost the loan mod but lost the house to foreclosure.  One fell swoop, right?

And we have another client who hasn’t paid in over a year and has not received – has not even been schedule for a trustee sale, not a year, like 12 months.  Okay.

Mike Rockwood:  Yes.  Ups and downs, you’re right.

Ryan Rockwood:  And you’ll hear stories about someone else who got this and that and this and that.  Don’t concern yourself with that.  If we find a strategy, we’ll bring it to you absolutely but you really have to go with what’s here because it’s just crazy how inequitable it is.  You know.

Mike Rockwood:  Yes.

Ryan Rockwood:  Okay.  So, now do it.

Mike Rockwood:  All right, so we want to talk today about missing payments and I know this is a hot topic for so many of you because we talk often about the struggles that we all go through about whether or not we should miss payments.  If I miss a payment, what are the implications?  What happens financially?  What happens legally?  What about FICO damage?  What about Notice of Default, Trustee Sale, all the fees, et cetera, et cetera.  How many payments can I miss, et cetera, et cetera?

Honestly, it probably causes more emotional consternation than it’s worth.  But it’s kind of a testimony to the fact that we all really intend and really are trained to do the right thing, to do the ethical thing, to do the thing that we agreed to do and that is to make payments.  But you got to throw logic and rationale and old ethical paradigms, just what I call them, to the wind.  Because everyday I’m telling you, I craft strategies with homeowners that would have been unthinkable just 12 or 18 months ago.  Missing a payment is unethical on the surface.

But I want you to think for a minute about these three elements in the context of the bailout that is our tax money being given to banks in order to modify our mortgage.  Number two, the fact that so many of our homes, many, many millions are so far underwater that they will never recover the loan value again in our lifetime, and number three, the fact that modifications are not available without missing payments.  Let that one sink in.

Ryan Rockwood:  You know, I think you got to qualify your statement they’re unethical.  But, you know, you’re talking about voluntarily missing a payment, right?

Mike Rockwood:  Yes.  I know exactly.  Yes, missing a payment is unethical on the surface.

Ryan Rockwood:  You wouldn’t feel bad if that’s…

Mike Rockwood:  No, but that’s my point, Ryan.  In light of those three things that I just named; the bailout, the fact that so many homes are underwater, they’re never going to recover that value in your entire lifetime, certainly not in your mortgage lifetime.  And the fact that mods are not available without missing payments.  That is the truth.  So, missing payments, in fact, seem to be a rational approach for over 15 million Americans.

Many clients that I work with are missing payments as a key part of their strategy and I call it a Hide and Seek strategy to get out of line, to get a good modification while the getting is good.  So, it’s something that you really seriously need to think through and need to consider.  If you are still waiting in line when the bailout funds run out and the programs must be suspended for whatever trumped up reason, well, you just miss out.  If you are informed as to the consequences of missing a payment and the processes that you can use, then miss payments to get priority.  And if you’re smart about recovery, you know, working on your FICO score to recover it, then it’s really can be an important part of your strategy to get a good modification.

We are, in fact, playing hide and seek with the lenders.  Many clients are missing payments as a central part of their strategy to dispose off properties in a strategy that I call Cash Max.  And that’s where clients have decided that they’re just way too upside down, they do need to move on but they want to delay the inevitable for as long as possible to try to maximize their cash out of the situation.

So, they and the bank have made a bad bet in terms of investing in this property.  The homeowner thinks of it that way, thinks but I lost all my equity and now let the bank use the mortgage contract that we had to settle how much of the equity, how much equity they’re going to lose in this deal.  So, there really are these two strategies, that’s Hide and Seek and this Cash Max that I use with clients day in and day out to try to figure out how to think about missing payments.

Let’s talk about the nuts and bolts of missing a payment.  And I really have five points that I want to make before we take specific questions.  One is I want to talk about late fees, repayment plans, forbearances, and deferments.  So, it’s kind of the nuts and bolts of what happens when you miss a payment.  Number two, FICO damage and FICO recovery that is.  And then number three is, when does a notice of default happen?  And number four, notice of trustee sale and then additional fees that get incurred at that point.  And then lastly, charge offs.

All right, first of all, when you miss a payment as you all know very likely, after 16 days you incur late fees, and after 30 days you actually get reported late to the bureaus.  You do that three times in California, you receive from the bank a Notice of Default and that’s true in almost all non-judicial states.  And I think there are about 30 of the non-judicial states.

Now, if you’re in a judicial state where they have use the court system to work the foreclosure process, actually the notice of default period is about the same.  So, it’s about 90 days, about three payments late, the bank makes a call to you after your first payment and they’re pretty polite and everything.  And after your second payment missed, they’re less polite.  And after the third payment, they don’t call you.  They just send you a note.

But because things have gotten so swamped especially in California, Arizona, Nevada, Florida, those notices have gotten later and later, and later.  And like Ryan said we have a client working with us now who has not received a notice of default and hasn’t made a payment in 12 months.  Now, she has done some extraordinary things to delay the notice of default and there are plenty of things that you can do.

Okay, but immediately you incur late fees.  And after having missed a couple of payments, you’re very likely to be put on a repayment plan before the bank will commit to considering your loan mod application.  They may also suggest that you apply for forbearance or a deferment, which is a legal opportunity for you to miss payments although financially it’s rarely in the borrower’s best interest because there are tons of fees complete reporting to the credit bureaus.  And so really, I don’t really know why people even go through it with home mortgages and trustees.

With regard to FICO damage, it’s impossible to say how much one payment will hurt your FICO score.  Typically, the first missed payment doesn’t have much impact at all like in the neighborhood of 10 to 25 points.  But it really kind of has to do with how many other factors you have going on at your FICO score because you all know if you’ve read the chapter, I believe it’s Chapter 9 in the book about buckling your FICO seatbelt.  There are so many factors that go into FICO calculation that you can’t really say with any certainty how much any one person’s FICO score will be hurt.  Is it still too soft?

Sorry about that.  Gosh, I apologize if that was – if it was hard for you to hear me.  And what I’m going to do now is just continue.  So, your FICO decline after your first missed payment can be as little as 10 to 25 points.  I’ve seen it where it’s been as high as 50 points.  Most clients who end up going through a loan modification in an aggressive fashion and miss like three to five payments during the course of the loan mod or the short sale, typically we’ll see their FICO score decline by over 100 points and sometimes as much as 150.

Now, declines like that take a year or more to recover from and you have to do really proactive things to recover from that kind of FICO decline.  Now, you all know in chapter 9, the Buckle Your FICO Seatbelt, we talk really, really clearly about what you need to do for recovery.  There are seven steps that we recommend you take to aggressively recover from a FICO hit like that.

Ryan Rockwood:  I should tell people that as we talk, you can send in a question at help@60minuteloanmodification.com or we’ll take questions in a little bit and you guys can just speak up.

Mike Rockwood:  All right, now after you’ve missed those three payments and you get a notice of default, after the notice of default, you have three more months.  You have 90 days to cure that and if you continue to miss those payments, you’ll continue to get reported each and every month.  What a lot of clients do is they miss their first payment and then they stay 30 days late during the entire loan mod process.  And that’s a good enough strategy.  A 30-day late has a certain bearing on your FICO score.  A 60-day late has a bigger impact.  So, it is better convoluted thinking, but it technically does seem to be better to have two 30-day lates than to have a 30-day and a 60-day, all right.

So, it’s a good strategy if you want to minimize the risk.  Now, in terms of FICO damage, my advice that you guys all probably remember is to take all the hurt fast and to get it behind you.  So, my recommended strategy is always stay late for as long as you need to and then get it done and then get out of it and put it behind you because recency or how recently you’ve been late is the key factor in analyzing your lates as they impact your FICO score.

Now, when you miss enough payments to get a Notice of Trustee Sale, so now you’re probably six months late, you’ve missed six payments.  You get a Notice of Trustee Sale.  Now, they’re going to send that file to their attorneys.  And that means you’re going to start to rack up fees in a hurry.  And a lot of these fees are almost impossible to argue your way out of.  Certainly, the attorney’s fees are because they actually incur those fees.  They very often send them to attorneys that are on retainers outside of their own company.  So, they actually do incur those costs.  It’s not just internal.

Mike Rockwood:  So, that’s another implication of getting that Notice of Trustee Sale.  Now the fees are going way up.  Okay.  Then last thing I want to talk about charge offs after you have missed up to six months.  Now, if it’s a second mortgage or a Home Equity Line of Credit, you are now a candidate to have your loan charged off.  And that means that the bank is going to take it off their books as a good loan and technically they write it off.  And that sounds like good news but it isn’t really good news because what they do is they either sell it to a collection agency or they assign it to a collection agency.

Either way, you’re going to continue to get hounded for it.  And either way, if there is a lien on your property or if they do have recourse and can pursue a judgment against you, they will continue to do so.  So, it isn’t really good news for you.  And you know it’s seen lately as a lot of second mortgages going to extreme lengths like offering modifications to zero percent interest and only $90 or $100 payment per month just to keep the loan active while they go through the modification on the first or while they go through the short sale.  All right, let’s see what else do I want to say about that.

Ryan Rockwood:  We’ve got some advanced questions waiting in the wing.

Mike Rockwood:  All right.

Ryan Rockwood:  Whenever you’re ready but the subject of the call is The Truth About Missing Payments.  But you can ask questions about anything.

Mike Rockwood:  All right.  So, I guess that’s it.  The truth is that some clients are using missing payment as a real central part of their strategy to dispose off their property in a strategy that I call Cash Max others are using in Hide and Seek fashion in order to get the attention of their lender and get a good loan modification and then put this behind them.  Let’s go to questions about missing payments.

Ryan Rockwood:  First of all, we got to got – you know what — this one is not about missing payments but it is an advanced question, so let’s go handle it.  This is from Paul.  Paul is with Countrywide having big problem with his Real Estate Owned sheet.  Countrywide is not accepting his Schedule of Real Estate.  And they’re forcing him to list all the debts, the houses as debts and it’s killing his DTI.  Now, he also adds that the rentals are held in an LLC.

Mike Rockwood:  Okay.

Ryan Rockwood:  So, it seems to me that they can’t have it both ways, right?  Like if they say, he has to put it on his budget but it’s in an LLC, why should he even be involved?

Mike Rockwood:  Yes.  You know, I don’t think it matters Ryan that it’s in an LLC.  Wherever it is, he owns it and it’s his debt.  Yes.  So Paul, first of all, I would – you know what, I would escalate that to a supervisor first of all because here’s what I’m afraid of.  I’m afraid you’re just getting jerked around by someone that doesn’t know what they’re doing.  And if you accommodate them, which you might have to do, and you can certainly do and show exactly the same DTI, exactly the same DTI as showing it separately.  Then if you go through all that hassle and rigmarole and it sounds to me like they’re just going to get tripped up on something else because I think they don’t know what they’re doing.

So, my first recommendation is that you escalate that to a supervisor and tell them that friends of yours who are doing loan modification say that this is absolutely not the way to do it.  Are you sure you guys want to do it this way?  Or tell them your attorney said it for that matter.  But at any rate, if they insist on it, you can accommodate that.  And it’s always best to do it their way.  So, if they, for whatever reason are asking you to do that, then you just have to torture those numbers and put them in your budget in a way that causes them to give you the same DTI that it would have otherwise.  In other words, you have to use your other expenses to manipulate.  Even as I’m talking, I’m realizing what you’re going to run into is the…

Ryan Rockwood:  Is their debts.

Mike Rockwood:  Yes.  Debts versus income.

Ryan Rockwood:  It blows him out from 47% to 72%.

Mike Rockwood:  Now that’s a deal killer.

Ryan Rockwood:  Although he’s not.  I mean, 72% is not that.

Mike Rockwood:  But 72% you could still – yes, we’ve done, Paul, we’ve done deals as high as 78% but anytime over 70%, you are on thin ice.  But you know what Paul?  Just mush on with that.

Ryan Rockwood:  You know, maybe they’ll actually accept it.  It’s 72% and you’re just hesitant to let it go forward.  You might just let it go forward and tackle it at the next level, you know, negotiate or something.

Mike Rockwood:  Paul, maybe that’s the best advice, Paul.  Just press on with it.  You got to make sure that your cash flow at the bottom of your budget is plus or minus $500 like we always advise.  So, make sure you’re right there.  And then if you’re at 72%, well so be it.  The way they’re looking at it, what else do they expect?

You know, the other thing you could temper your rental income by your vacancy calculation.  Because very often people use at least a 10%, you know you figure you’re probably going to miss one month at least every year or maybe every two years or something.  So, most landlords use a 10% vacancy factor.  I know we certainly do in terms of calculating cap rates.  So, go ahead and use a 10% vacancy and cut down your rental income.

Ryan Rockwood:  The second, how [phonetic] low is it?

Mike Rockwood:  Yes.

Ryan Rockwood:  Have you touched down [phonetic] his income?

Mike Rockwood:  Or increase your income.  In that way manipulate your debt-to-income ratio.

Ryan Rockwood:  Okay.  All right.

Mike Rockwood:  Paul that made a ton of sense.  So, if you didn’t catch it, ask for more clarification at help@60minuteloanmodification.com.  Thanks, Paul.

Ryan Rockwood:  Got another question.  If late on the second only, can they foreclose, 2.5 months late now?  The answer to that is certainly.  They’re able to foreclose not in 2.5 months but they’re certainly able to do it.  Now, the question you have to ask is, will they?  If there is a spec of equity, if there is a spec of equity position like they could possibly get $500, they probably will.  However and here’s how you look at it, okay.  Let’s say the property is worth $400,000 and the first is for $300,000 and the second is for $100,000.  You’re late in that second, absolutely they’ll foreclose on you, right?

Mike Rockwood:  If the property is worth $400,000 you mean, Rock?

Ryan Rockwood:  The property is worth $400,000.

Mike Rockwood:  Okay.  Yes

Ryan Rockwood:  Yes.  Now, let’s take that further and say that the property is now worth $400,000 but the first is $400,000 or $350,000 and the second is $150,000 above that.  Okay, so they have – you know, let’s say they get the house back and they sell it at $400,000 minus $50,000 off of that, they net is $350,000, they would actually have to pay the first off out of their own pocket.  So, they’re not going to do that, okay.  You won’t even get a Notice of Trustee Sale.

Mike Rockwood:  And I think, Ryan, most of the lenders figure it’s going to cost them at least 10% to sell the house.

Ryan Rockwood:  Yes.  So, I mean the people that we talk to are asking these questions, most often are in a very good – typically most commonly are in good position in terms of not having to worry about it.  Now, it’s not going away.  If you get charged off, they might never decide to contact you again but that lien is still on the house.  And borrowing bankruptcy or something like that or some new federal program rolled down a couple of years.  You know, you’ll eventually have to pay the piper.  You’ll never make a dime on that house.

Mike Rockwood:  You know, this person is thinking exactly – thinking real clearly though is if you can’t bank your mortgage payments, miss the payment to the guy who can’t hurt you.  The second mortgage, we get kind of skewed because we do most of our work in Arizona, Florida, Nevada, and California.  And so we just think in terms of 25% to 50% reduction in values.  So, most of the second mortgages that we deal with are completely out of luck, out on a limb.  They have no equity and they’re going to get shutdown someday.

Ryan Rockwood:  Yes.  The thing you have to remember though, we were kind of talking about this the other day, and I was thinking the thing that someone has to remember if they’re in the situation again, go back to the rental income.  Can you rent for somewhere else?  If not, if you can, if you can rent for seriously cheaper, short sale this, get out.  If you can’t, you could sit on it and only pay the first for the next couple of years while you get by.  However, I really don’t think you can ever expect to make any money on that house at all because with that second sitting there, accumulating interests, fees, penalties, and the principal, no matter that house eventually appraise that let’s say $500,000 or $600,000, you’ll be pretty much toast.  Before they’ll release that lien, you’re not going to make a cent on it.  So, it is an exit strategy only.  Okay.  You have to mentally give up on that house.  No more renovating kitchen, in other words.

Mike Rockwood:  Hey now, one thing I’m doing on my seconds up in the high dessert in Southern California is I am aggressively asking the holder of the second mortgages on two properties to accept the 10% buyout.  And they’re not listening, not listening, not listening.  I’ve asked in four different ways by four different methods.  And I keep sending them pretty sophisticated calculations of projections of real estate values, et cetera, et cetera.

But I have heard from folks around the country that there has been some limited success with this strategy.  So, I’m trying it like crazy.  And when I hear of successes, I’ll let you know.  Now, certainly at 40% and 50%, seconds are easily bought off.  But I don’t want to spend that much.  I’m willing to spend $10,000 just to get rid of this $75,000 second.  But I’ll report those successes as I hear them but that’s another strategy to keep in mind.  And more and more as time goes on these next six months are so we’re going to really hear a lot about second mortgages and what to do about it.

It seems to be kind of the tip of the spear in terms of principal reductions and in terms of ways of dealing with the problem.  Second mortgages are kind of coming into focus.  So, you’re doing right by using that one.

Ryan Rockwood:  Here’s another one.  Once you miss a payment, what kind of language do you use with the bank?  Does it change your tone?  Do you talk about foreclosure?  Do you talk about other options?

Mike Rockwood:  Yes, good one.  Yes it changes.  Unfortunately, here’s how it changes the tone.  All of a sudden, you get treated with respect.  Isn’t that a shame?  Yes, so all of a sudden you get treated with respect.  They see you’re serious and I never hesitate to say that I wish I could keep the house.  I want to keep the house.  I always tell clients to be real forth coming about the emotional part of it and the fact that if you’re talking with the bankruptcy attorney at that point, it’s not bad to mention it.  So at that point, any of those things are fair game.

Ryan Rockwood:  And through this, I don’t think you have to actually bring it up because it’ll be in there and read on your file.  You know what I mean?  Yes.  So Steve asks, “How does bank look about making a partial payment?

Mike Rockwood:  Yes.  Partial payments are tricky.  You would think that they would be a sign of goodwill and good faith and negotiating in good faith.  But in fact I think they kind of work against you.  First of all they won’t apply them to the loan.  They hold them in an escrow account and it seems to not matter to anybody.  It doesn’t slow the foreclosure process.  It doesn’t get you any goodwill.  So, it really seems like a wasted effort unless you make one complete monthly payment.  So, that’s the strategy to use.  Unless you can make a complete monthly payment, don’t send them any money.

Ryan Rockwood:  Another client says, “My bank won’t even accept a payment from me now.”

Mike Rockwood:  Yes.  They say they won’t accept it.  If you send it in, they hold it in an escrow account to be applied when you get your repayment plan or anything like that.  So, it’s really not smart to be sending them money when you’re late in the negotiations like that.  Better to keep in a bank account somewhere else or under your mattress or something like that.  So it’s there available when they present the deal to you because when you’re late in the negotiation for one of these things, they might put you on a repayment plan that requires that you pay as much as like two times your normal mortgage payment could be.

Very often, it’s the down payment or the first payment on the repayment plan that is so high.  Like I was negotiating on one this morning where they want $8,000, 30% of the past due amount in one initial payment and then they’re willing to give the client three lower payments before they modify the mortgage.  So, it’s nice to have that stash of cash. So, when you do feel like you’re getting somewhere and you’re getting a good modification, you can move on it quickly.

Ryan Rockwood:  Kurt asks, so he says his corporate bank accounts with his lender B of A, Countrywide, “Should I also move my business checking account to another bank?”

Mike Rockwood:  Yes, if you are the sole signatory.  If anybody else is on it, they won’t touch it, they can’t touch it.  But if you are the only person, then they can.

Ryan Rockwood:  And the other thing is we’re assuming this is your business.  And I wouldn’t risk it if I got my wife on there or whatever.

Mike Rockwood:  Oh, yes.  Good point.

Ryan Rockwood:  You know, the thing is that it also assumes that you have some money in there, okay.  Now, you can’t get caught out if maybe, let’s say, 30,000 comes in each month but 32 go out.  You could actually get caught and actually I did.  That’s how we learn that.

Mike Rockwood:  Yes, so you get a big deposit coming in and then boom, it’s gone.

Ryan Rockwood:  It’s gone, whack.  And believe me, there’s no getting that sucker back.  But if it’s pettily in and out, you might not even bother with it.

Mike Rockwood:  But you know it’s going to get uglier.  So, I would be more cautious than less.  I would really encourage you to be cautious.

Ryan Rockwood:  What if you miss one payment and then pop back on track?  You send in both of them the next month or something like that.  Can that still count as a missed payment and you’re better in terms of your loan mod?

Mike Rockwood:  Yes.  I see what you mean.  So in other words, do you get the impact of getting the attention of the lender by being late once?  And I guess my answer to that would be – I think you really do.  I think once you are late for those next 30 days, you will be treated seriously.  You will be considered for a loan modification.  And honestly, if that’s all you need, that might be all you want to do.  If that’s all it takes is to get them to seriously accept and process your loan mod, then that’s good.  Most people find though that they need to miss more than one payment because honestly, it’s taking longer than 30 days.

Ryan Rockwood:  Okay.  Let’s jump online here and take a few calls.

Mike Rockwood:  All right.

Melanie:  Okay, hi, my name is Melanie.

Ryan Rockwood:  Hey, Melanie.

Melanie:  Hi, you guys.  I’m so very thankful having you guys to help guide us through this process, guide me.  I’m actually over 30 days late on the payment right now.  I had a problem with my car and my house, one old clunker.  I live in the dessert and I had to get it fixed, so I was stranded.  So, I am late.  My payment was due, well, I told you the first of the month and this is my made payment.  So, I’m over 30 days late from my made payment.

So, I’m really a newbie.  I just signed up with you guys.  I haven’t received any of my materials yet but I signed on for this first call.  So, my first question is – because it makes me really nervous to be late.  I have good credit or at least if I had good credit.  But something happened.  Number one, I couldn’t prevent [phonetic] and number two, I was told that if you don’t miss a payment, then you’re never going to be considered for a loan modification at this point.

So, my first question is, as a newbie, when can a bank start foreclosure process against you.  After how many missed payments?  And number two, are you saying that once we miss a payment, if we’re going to go and try to do this loan modification, we shouldn’t be sending in other payments while we’re in process?

Ryan Rockwood:  Okay, any other questions that you have, Melanie?

Melanie:  Oh, that’s me for basis.  I didn’t even read your material yet.  I haven’t gotten anything.  So, I’m just listening.

Ryan Rockwood:  No problem.  Thanks for joining us and…

Mike Rockwood:  Wait a minute, Melanie, are you in California?

Melanie:  I’m in Arizona.

Mike Rockwood:  Arizona, okay.  Yes.

Ryan Rockwood:  Okay.  Well, I’m going to mute you and answer the question so that everyone can hear.

Melanie:  Okay.

Ryan Rockwood:  Okay.  For those of you that didn’t hear, Melanie from Arizona asked a question.  She has just missed her first mortgage payment.  She’s probably in that new state of mind, like, “Oh my god, I never thought I’d be one of these people who don’t make their mortgage payment.”  But she has something come up.  And in her case, it was a car in other people’s case, medical bills, something like that happens, lose your job, reduction in pay.  You know, the story is going on.

So, what happens here is that she had something that, frankly, she was going to pay before her mortgage.  Now, she’s wondering, now she’s late for the first time, she’s wondering what she should do.  Should she not make any more payments until she gets through with this loan mod thing?  Is that what she should do?  And also, how soon can a foreclosure happen?

Okay, so let me just handle the foreclosure question first.  I believe Arizona is the same as California, right?  So here’s the timeline, Melanie.  Is this the date of your first missed payment or the date of…

Mike Rockwood:  You need to go 30 days late.

Ryan Rockwood:  As soon as you go 30 days late

Mike Rockwood:  So, now you’re in default.

Ryan Rockwood:  Okay, so now 90 days.  Now the 90-day period starts.  So, Melanie, it’s 90 days from the default until your bank has the option of filing something that is known as a Notice of Default.  Okay.  And what that says to the – it’s a public record so then you start getting calls and door knocks and mailings and stuff like that.  But what will happen is at that point, either just going through the legal process and they’re just saying now we can take the next step.  And so Arizona, what is the next step beyond that?

Mike Rockwood:  Well then, she’ll get a Notice of Default after an additional three months.

Ryan Rockwood:  Well, she’ll get a Notice of Default after the first three months.

Mike Rockwood:  Yes, and then 90 days later, she’ll get the Notice of Trustee Sale.

Ryan Rockwood:  Yes, 90 days later.

Mike Rockwood:  Yes. So, really Melanie…

Ryan Rockwood:  And then 21 days later after that

Mike Rockwood:  The house is gone.

Ryan Rockwood:  In the earliest sale.  Okay, so if you’re talking – to put that all into – let’s say you never paid another thing, another dollar, and you never even called them back, it would take a minimum of six months before anyone could do anything about it.  And so you don’t have to really worry about that but you do want to be checking your mail.  Okay, because when you get that Notice of Default, when you get a Notice of Trustee Sale, it’s all a ball game.  Okay.  And you really got to be on it because they might not care; they might not even file it.  It just depends on your bank.  You know, like that one woman that I said 13 months now hasn’t made any payments, but other people smack right on three months, boom, Notice of Default.

Mike Rockwood:  Yes, so Melanie, also to keep in mind now you seem concerned about your FICO score, which is admirable.  If in fact this is your first missed payment, you probably will see a very little impact on your FICO score or maybe 25 points or so.  And that’s pretty easy to recover from.  I mean, you can lose 25 points just by having too many inquiries.  Well, that might be an exaggeration.  But you won’t have much damage to your FICO score after this first payment.  And if you can, you should just continue – you should make your June payment if you can.

But certainly, what I would recommend is that you stay late until you submit your application.  And if you have ordered the kit and it’s on its way to you, then you should get it by – Arizona is just a two-day so you should have it by tomorrow, then you can submit it by Monday, so then you’d be in good shape.  You could do it your pre-qual on Monday and just get off to a fast start, so you may only have to miss one more payment.

Ryan Rockwood:  So, it’s going to be a loan mod weekend for Melanie.

Mike Rockwood:  Yes.

Ryan Rockwood:  Now, let’s talk about the other issue.  What was her other question?

Mike Rockwood:  How many missed payments and then do you continue to make payments?  That we answered them both.

Ryan Rockwood:  Oh we did?

Mike Rockwood:  Yes.

Ryan Rockwood:  Are you sure?

Mike Rockwood:  Yes.  She says, how many – before you get a Notice of Default and then should I continue to make payments?

Ryan Rockwood:  Okay, got it.

Mike Rockwood:  So, we’re good.

Ryan Rockwood:  Okay.

Mike Rockwood: Hey, you know, Arizona is a judicial state.  So, the process is largely the same.  It will take longer.  It takes longer in Arizona to speak as the courts are involved.  And honestly scheduling because Arizona is one of the top states in foreclosures right now.  Numbers of foreclosures, those courts are backlogged.  So, everything we said is even slower in Arizona than in California.

Ryan Rockwood:  Yes, in California they don’t actually have to go through the court to take back your home.  We don’t actually have mortgages here.  What’s it called?

Mike Rockwood:  Trust Deeds.

Ryan Rockwood: Trust Deeds, okay.  We use – prefers them as mortgages but they’re not.  And so that allows the banks to circumvent the courts and just take your properties back at a certain timeline anyway.  Okay so got another question here.  “I faxed all the docs to Countrywide in January and have not heard anything back.  Is this too long?  What can I do?”

Mike Rockwood:  Yes.  It’s way too long.  So, something’s a miss.  And you got to tell us what’s going on, have you received a Notice of Default?  I bet you have.  And I kind of bet that you think that you’re application is in process.  I bet you it isn’t.  I bet it was lost, misplaced, it’s been overlooked.  I bet if you contact them now they’ll go, “Oh, we sent you notice that we canceled that application because we hadn’t heard from you in 90 days or something like that.

Ryan Rockwood:  You can’t do anything about that.  You can’t argue them on that point.  You can never make up that time so don’t…

Mike Rockwood:  And you know what, you’re so much better off now than you were in January.

Ryan Rockwood:  Oh, assuming that it’s not on foreclosure sales in [Indiscernible] or something.

Mike Rockwood:  Yes.  You got to move real quickly and find out first of all.

Ryan Rockwood:  Let’s give her actionable stuff or him.  He’s got tomorrow, tonight, is Countrywide open until 9:00 tonight?

Mike Rockwood:  Yes.

Ryan Rockwood:  Call Countrywide.

Mike Rockwood:  And just ask them what the status is.

Ryan Rockwood:  The numbers listed in our book and if you don’t have it handy.

Mike Rockwood:  No.  These are all clients so they’ve got the number.

Ryan Rockwood:  Yes, but maybe he doesn’t have the book handy.  Google will tell you in a sec.

Mike Rockwood:  Yes.  First thing you do is call Countrywide anyway.

Ryan Rockwood:  And you’re going to have your account number.

Mike Rockwood:  This is where you call 800-669-4578 and give me your account number.  Say, what do you think is the status of my account is?

Ryan Rockwood:  Do you see my loan modification application?  Hopefully you know what day you sent it in because for some reason that makes a difference for them finding it.  You have to find out if your loan modification is there, is in process, where it is.  Now, if it’s in process on its way to negotiator and it looks complete, good deal.  Super.  You know what I mean?  Just keep doing what you’re doing.  So yes, you’re in real danger.  Assuming you have stopped paying, you’re in real danger here of foreclosure.

And I’ll tell you, unless you’re watching that mail like a hock, it can really sneak up by then.  So, don’t let that happen and e-mail us at help@60minuteloanmodification.com.  If you find that you are that close to – because we can help you take some dramatic steps or something.  Is it important to move quickly after missed payment?  What does it mean to move quickly?  Like what can we do to make it go fast to ask someone?

Mike Rockwood:  Yes.  The sweetest deal is when you submit that application shortly after having gone 30 days late because now when they receive it, it gets treated with respect.

Ryan Rockwood:  Some banks require you to be two months late, though.

Mike Rockwood:  I don’t think that’s true, is it?

Ryan Rockwood:  It certainly was.  Maybe it’s changed.

Mike Rockwood:  Yes.  No, I think we’re good with 30 days late.

Ryan Rockwood:  I guess you’ll know, though you’ll find out.

Mike Rockwood:  Yes you’re going to find out.  But there simply will not be programs for you if you are not late.

Ryan Rockwood:  Okay, “What can you do to make it go faster?”  What you have to do is just follow the instructions in the book but cliff-notes version.  You need to submit a complete application.  You need to call three days later to make sure they received the application.  You need to call two weeks later to make sure that the application is on its way to a negotiator.  And you have to call back two weeks more when you should have a negotiator assigned to you but you don’t yet.  So, you’re asking why isn’t there a negotiator assigned to you and continue in that.  Do you think that’s right?

Mike Rockwood:  Yes.  But I still do recommend and I tell all the clients to follow that daily fax follow-up program because I don’t say I stand by it.  A lot of people say, “Oh, it’s too much work.”  But I stand by it.  I think it’s really worth doing and what does it take you?  Maybe a minute and a half everyday just to send the fax.  I recommend that you do it because it also reminds you to think about it everyday and stay on top of it because honestly, part of expediting this thing is staying in their face, is bringing to their attention routinely.

So, I really want to reemphasize what Ryan said about the best way to get a great modification is to do a complete and smart application upfront.  Know what the ratios are.  Know what the qualified hardships are.  Hit the target and do it right the first time.  And then with tons of followup and missing that payment and you’ll get a good modification as fast as you possibly can.  And it seems like the fastest ones these days are about 30 days.

Jeff:  Ryan, this is Jeff.  How are you doing?

Ryan Rockwood:  Hi, Jeff.  Go ahead.

Jeff:  Listen.  You guys are doing wonderful job and I did receive your application and everything.  It’s fantastic.  Thanks for all the help.

Mike Rockwood:  Hey, Jeff.  How can we help you now?

If you are one of the over 100,000 US homeowners to receive a Notice of Default last month – well, at least you are not alone! The Notice of Default (NOD) is the official start to the foreclosure process. It probably was not a surprise to you, as it usually takes about 90 days of delinquency before it is issued. But, it’s always a shocker, and never a welcomed event. This foreclosure process that you are now in will protect you even while it humiliates you.

So, don’t resent it. Rather, see it as a great chance to negotiate a workout that will really work. In 2010, to slow the rising tide of foreclosures, the federal government has pressured banks to modify hundreds of thousands of mortgages. Unfortunately, the banks are not doing so and the time and labor involved in getting a mod is onerous, to say the least. And, the majority of trial modifications are not being made permanent. So, don’t settle for anything less than a real fix. Get a mortgage modification arrangement that you can live with. You need a solution that will get you through this economic mess of the next few years.

When the NOD arrives, people ask:

What next!? Who can I trust? What steps do I take now? Can this get any worse?

Good questions! And, understandable. But, also ask:

Should we even keep this house? Is this mortgage just too much? What are others doing to deal with this problem? How can I reduce the negative impact on my credit score? Can I get sued for any “shortfall”?

You feel like your situation is unique, but there are tons of similarities to what millions of other are going through. So much so, that you will do well to hook-up with an active, knowledgeable and trustworthy lawyer or loan modification consultant to help you succeed. The advice that is suitable for the masses…is just too watered-down to do you any good beyond just “getting in line” with everyone else. You need the advice of someone who is succeeding at modifications every day. More tomorrow! Mike

Palos Verdes HomeOwner Advocates to donate a free copy of Mike Rockwood’s newest handbook written specifically for South Bay homeowners! (Click below)

“Honey, I think we are going to be short on our mortgage payment by $165,858.”

– Imagined dinner conversation of Bob Lowe, chairman and chief executive of Lowe Enterprises, The Terrenea Resort’s principal owner.

Oh snap!

Gosh, maybe they’ll let it slide? …Turns out they just might! As always, it’s great to be rich. And it’s even greater to be uber rich. Check out this quote from the L.A. Times:

“Lenders are loath to take these properties back, especially something as management-intensive as hotels,” Reay said. “Foreclosure is the last resort on a resort hotel.”

So I guess the lesson here is…

…. wait there is no lesson here. It’s just lame. And so is the Terranea resort, in this writer’s ever so humble opinion. Every time I drive by I wonder, ‘Who the heck would come here?’ Also, how are they going to get here, the 110 South to Gaffey and through San Pedro? Wow, that route is going to make folks feel special – that is if they are into driving through poverty and gangland to arrive at Disneyland-style largess in the middle of nowhere. To me, it’s about as attractive as a long weekend in Haiti. Just stay inside the compound and you’ll have a lovely time.

Anyhoo, time for some fun math!

The Terranea Resort was built for a jaw-dropping $480-million. (Brief pause here so you, dear reader, may swallow the little bit of vomit that just bubbled up your throat).  So since everything else around is here down by 20-33 %, where does that put the value of Terranea? Well, take the land value and add the replacement construction cost and factor in the 50% drop in tourism of late and factor in the pledged millions of tax dollars…now calculate that and arrive at: $%@!!!^@!!

In layman’s terms, that basically equals whatever the heck Donald Trump is willing to pay for it.

Why that’s ridiculous, we are just snazzy!

Again, from the LA Times article:

The hotel is 100% booked for Saturday night, and as many as 200 rooms have been rented on weekdays, Lowe said. Three weddings will be celebrated at Terranea this weekend.

My bad. Silly me. Here I was thinking all these negative thoughts without noting the resort was full on Saturday. I guess having 100% occupancy on the busiest hotel night of the week must be the yardstick for success in that industry. Don’t get me wrong, 3 weddings is great. But unless they can charge $60K a piece it’s still going to be tough to make those monthlies. (Actually, they probably CAN charge that much)!

My hidden agenda:  The Terranea Website autoplays annoying music.

Recently my wife and I celebrated our 1-year wedding anniversary. (See adorable photos posted on this very Website). She was gunning for a couple nights at Terranea and I was modestly interested in making her dream a reality. So we get online and do the usually clicking around, and so on.

The cheapest ocean view room is $360/night. That means, of course, a 2 night stay is going to set you back a cool grand – and that’s assuming you don’t pickup the phone or even look at the minibar.

So I’m soon contemplating that expense as a percentage of my yearly income. And suddenly this ‘little local getaway weekend’ is anything but.

‘Gosh, that’s a ton of money,’ I think. ’Or maybe not. Maybe I’m just really poor.’

But then again, consider the average income of Americans …. once again, I’m back to, ‘Gosh that’s expensive.’

I start to think about other uses for that money. How could I make the money / the stay / the fun stretch? Is there somewhere we could fly, visit and stay for 3x as long for the same amount?

Then it occurs to me. And I’m soon Google-ing: “Travel deals to Haiti.’

For more information on the Terranea Resort please contact someone who cares. But for an unorthodox, dry and generally funny (but sometimes annoying) take on Real Estate in Palos Verdes Peninsula call me right away! I’m at 310-809-0203. And for goodness sake, subscribe to the blog already.