Two Reasons for the Unmitigated Success of the REST
Report in and out of Foreclosure Court
Now that we've had a chance to watch the REST Report prove it's
magic, we could see why it has the spectacular results it has had.
There are two main aspects to the incredible success.
A Brief Background:
The reader must make sure and separate the mortgage servicer and
mortgage investor in their mind. The mortgage servicer is just that, a
bill collector. They make their profit in collecting the monthly monies
for a performing asset and mortgage investor. Or not.
With the current economic crisis and the Home Affordable Mortgage
Plan (HAMP), the new designation of 'imminent default' took away the
necessity of being 45 days behind. A Hardship letter and current
statement of financials is now the requirement to demonstrate
imminent default. The distressed mortgage owner is not required to
prove hardship by skipping monthly mortgage payments.
Unfortunately, many mortgage servicers have used the Imminent
Default clause as an excuse to essentially require distressed
homeowners to miss mortgage payments in order to qualify for
mortgage modification consideration. The disorganization, (either
planned or unplanned, you guess) in the mortgage servicer's Loss
Mitigation and Foreclosure Departments then invariably led to
It is widely known that in almost all cases, the mortgage servicer
profits more in a foreclosure than either mortgage modification or
short sale. Those of us in the Loss Mitigation industry know that there
is a designed process here, but the courts have so far proven to be
incapable to investigate or prosecute, the current Foreclosuregate
scandal to the contrary.
Up until the spring of 2010, many adept attorneys were getting great
results negotiating beneficial mortgage modifications for distressed
mortgage owners that couldn't get through to the mortgage servicers
themselves. The typical fee was $3000. Last spring, the mortgage
servicers learned that no one was going to hold them accountable to
negotiate in good faith. The servicers became just as successful at
sandbagging attorneys as the homeowners themselves. Suddenly,
attorney fees multiplied because of court time, and all of the adept
attorneys I was aware of got out of the business.
What mortgage servicers may not legally do is foreclose while
engaged in a mortgage modification or short sale. Attorneys did not
have, or weren't aware of, a recognized, unbiased calculation of Net
Present Value to hold servicers accountable for in court. A judge will
not permit foreclosure while a mortgage modification or short sale is in
the works. No one was around to inform the distressed homeowner of
that right. (I will leave it up to the reader to guess as to whether that
lack of information was fostered by the mortgage servicers or not.)
Mortgage servicers will not reveal their Net Present Value calculation
for obvious reasons. So, buy the banks’ software and do it behind their
It is up to the individual distressed homeowner to claim their right to
good faith negotiations, backed up by an unbiased Net Present Value
calculation with their mortgage servicer and if necessary, a fair
hearing in foreclosure court.
The Net Present Value is a calculation universally recognized by all
mortgage lenders as the break even point where the best solution is
for that mortgage investor to a non-performing asset. That's banker-
speak for a mortgage that is more than 45 days in arrears. Those
solutions include mortgage modification, short sale, deed-in-lieu of
foreclosure, foreclosure, and incidentally, bankruptcy.
The mortgage servicer has nothing to lose. They profit from all the
penalty fees and interest, plus all the other numerous profit
generating that a foreclosure represents. The mortgage investor in
almost every case, is protected by a Loss Sharing Agreement with the
Federal Deposit Insurance Corporation (FDIC) that guarantees 80% of
the original mortgage purchase price in cases of default. All the
mortgage servicer has to do is use enough treachery, confusion, and
subterfuge to discourage the distressed homeowner into utter
confusion and fear to drive them away. Then foreclose.
When the distressed homeowner is given the opportunity to calculate
an unbiased Net Present Value and submit it as part of a mortgage
modification or short sale application, they bypass all the potential
shenanigans of the mortgage servicer. It becomes part of the
application and potentially a legal document. The REST Report uses
mortgage lender software to calculate Net Present Value. There is no
escape for either mortgage servicer or investor(s) to consider such an
There may be as many as eight, count 'em, eight; separate investors
involved in a single property mortgage. Whether the current
Foreclosuregate scandal ever gets prosecuted by the 50 state's
Attorney's General or not is a prospect that intrigues all of us that
observe the distressed mortgage industry and counsel distressed
homeowners on how to benefit from the system. But the prospect is
moot. The process for a distressed homeowner to successfully
negotiate a win-win solution is clear. The nation's foreclosure judges
have made it clear they are rubbing their palms together in
anticipation of adjudicating any foreclosure process. That leaves the
distressed mortgage owner the singlular opportunity to provide a tool
for the judge to rap his gavel on the knuckles of any careless
The mortgage servicer absolutely dare not misplace the REST Report if
it can be proved to have been submitted by the distressed mortgage
applicant. On an individual mortgage basis, that would be an
immediate trip to jail for the offending mortgage servicer company
officer. It's just not gonna happen.
To be clear, the other main aspect to success in mitigating a
distressed mortgage is to prove that the mortgage servicer, and by
extension, the mortgage investor(s), received the REST Report and it's
inherent unbiased calculation of Net Present Value, along with the
supporting documents required by the mortgage servicer in a
mortgage modification or short sale application. A hint: do not fax
anything, ever. Do not believe anything you hear on the phone, ever.
There are too many stories of mortgage servicers foreclosing while in
the midst of a mortgage modification or short sale negotiation.
The REST Report computes either mortgage modification or short sale
as the most efficient solution to a distressed mortgage. The mortgage
investor will assuredly jump at the opportunity to resolve the
distressed mortgage, given the pressure put on them by the federal
government to resolve any mortgage that has an unbiased Net
Present Value calculation.
We have yet to see a judge do anything but defer to the REST Report
as a positive resolution to a distressed mortgage in foreclosure court.
No one can guarantee any future results, but given approximately
1500 REST Report submissions with positive outcomes, in or out of
foreclosure court; we are ecstatic at being able to offer such a positive
foreclosure avoidance tool.
We are finding that there is no financial advantage to hiring a third
party mortgage modification negotiator. If you qualify and want a
mortgage modification, you can do it all yourself for free with virtually
no extra work. Mortgage modification is a Do-it-yourself project.
If you want a short sale, regardless of what the REST Report qualifies
you for, an experienced distressed property investor can negotiate the
best avoidance of mortgage deficiency available, based on your
They will certainly be a better choice than the Home Affordable
Foreclosure Assistance option. The HAFA option was written by and for
the mortgage lenders. It stacks the deck in their favor because of their
incredible lobbying power with the U. S. Congress. No one,
homeowners or realtors, who have gone through the HAFA process
has anything good to say about it.
Again, an experienced investor will have a vested interest in your best
interest. HAFA has the best interest for the same mortgage servicer
that avoided good faith negotiations with you in the first place.
Utilizing an independent investor keeps you in control of liquidating
your mortgage. The minute you sign the HAFA commitment letter, you
give away all control you ever had to the mortgage servicer.
I am a proud vendor of the REST Report. I'm not the only one. But I
also have the most successful Hardship letter template anywhere. I've
watched it succeed countless times.
Call Chris at: 970-242-2600
Read more about your Do-it-Yourself Mortgage Modification REST Report
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