Homeowner Loan Modification Tips

After observing the struggle of today’s homeowner, I began working with attorneys and homeowners on a personal level to help them navigate the loan modification process with lenders.  Through this process, I’ve gained inside knowledge of tips and tricks that I want to share with everyone.

Faced with an impossible choice of giving up their home or working with near-impossible bank constrictions, homeowners are facing foreclosures, short sales and looking for help with loan modifications. As I’ve said many times before, borrowers aren’t really worried about the fluctuation of their home values.  Most realize that the value of their homes has significantly decreased.  Bottom line, borrowers care about their monthly payment.

Most homeowners don’t want to lose their home. They still have good credit and don’t want to walk away just because they “bought at the high of the market”, and in the short run, may have made a bad deal.  Those thinking about trying for a loan modification are in for a tough time, as my first-hand observation of the process has exposed what homeowners need to arm themselves with:

Continue reading

Email this to someoneTweet about this on TwitterShare on FacebookPin on PinterestShare on Google+Share on LinkedInDigg thisShare on RedditShare on StumbleUponShare on Tumblr

It’s The Monthly Payment Stupid, Part II

A Case Study of a Trapped Homeowner

Several weeks ago I went to my 25th high school reunion at my alma mater, Georgetown Prep, in Bethesda, Maryland. A classmate of mine, who is a reader of The Sumichrast Report, asked me for advice. His brother-in-law, Jeff, is upside down on his house and wanted to know what options he would have.  I spoke to Jeff the other day and here are some of the facts:

  1. Jeff and his wife bought an end-unit townhome for $200,000 in May 2006. They received 100% financing.
  2. At the time of the purchase, they had a gross combined income of about $8 0,000. (At a 100% financing, this is well inside the 3x normal borrowing limits that historically would qualify.)
  3. Their first mortgage was at a fixed rate of 6.875% in an interest only 5-year ARM. Their second (a HELOC) was at a considerably higher rate, but has recently been reduced by the bank to match the first. The lender was Countrywide, but is now Bank of America. They are current on their mortgage payments.
  4. They recently had their first child. Jeff’s wife is on maternity leave, but her disability payments are about to run out. She plans on getting another job, but it will be part time, so their income is tighter. They are worried about not being able to afford the house.
  5. Jeff had hoped that the house would appreciate in value and his fall back would be that he could resell it. But re-sale prices in their neighborhood are down 20%. Jeff believes his house is now only worth $160,000.

Continue reading

Email this to someoneTweet about this on TwitterShare on FacebookPin on PinterestShare on Google+Share on LinkedInDigg thisShare on RedditShare on StumbleUponShare on Tumblr

Move Over Nostradamus

Will the Next 20 Years Be More of the Same?

The day after Thanksgiving is usually reserved for my annual trek to the attic. Christmas lights, ornaments, bows and extension cords are on my mind. What I wasn’t thinking about was the state of our nation and the challenges we face.  When I opened a box that I thought was lights, I found binders of newsletters that were published by Sumichrast Publications, the company my father started after his retirement as Chief Economist of the National Association of Home Builders in 1987. I had the privilege of joining him in that venture as I worked on my college degree. We published over 200 reports in 5 years. One of the first newsletters we did was called Mike Sumichrast’s STRAIGHT TALK (20 years before McCain’s Straight Talk Express). As I read one of the issues, I keep glancing at the date of the newsletter…January 15, 1989. Could it be that many of my father’s warnings about the challenges we faced in America had come true? And, will the next 20 years bring more of the same?
Continue reading

Email this to someoneTweet about this on TwitterShare on FacebookPin on PinterestShare on Google+Share on LinkedInDigg thisShare on RedditShare on StumbleUponShare on Tumblr

The Ugly Duckling Turns Into A Swan – Wall Street Searches for New Revenue Streams

Why Reverse Mergers Make Sense & What to Look for Before You Leap In…

My First Prospectus – Back in 1992, a document was dropped on my desk. The front page said “Preliminary Prospectus”, “Kaliningrad Fund”. Under the name in big bold letters it read “AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK”. As I started to read, every page was worse than the next. 

I wondered what this Company did. It had no revenues, no business and only $10,000 in the bank. I found out that a family friend, the former Secretary of State, General Alexander M. Haig, had been asked to be the Chairman of the Board of this new venture which involved acquiring businesses in the former communist bloc.
Continue reading

Email this to someoneTweet about this on TwitterShare on FacebookPin on PinterestShare on Google+Share on LinkedInDigg thisShare on RedditShare on StumbleUponShare on Tumblr

Sort of Sums Things Up, Doesn’t It?

My father always used humor in his many books and speeches. My father-in-law emailed me this little gem and I thought it was too on point to not pass along. I don’t know who wrote it, but if it wasn’t so true, it would be funny.
 ==============
A Japanese company (Toyota) and an American company (Ford Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.
 
On the big day, the Japanese won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Continue reading

Email this to someoneTweet about this on TwitterShare on FacebookPin on PinterestShare on Google+Share on LinkedInDigg thisShare on RedditShare on StumbleUponShare on Tumblr

The Sumichrast Report is Reborn

Welcome to TheSumichrastReport.com. My name is Marty Sumichrast. A couple of months ago, I was talking to my friend in Southern California, Andre Peschong. Andre mentioned that he had started his blog site www.dealflowdiaries.com for one simple reason…he loved to write and got joy from doing it. After hearing that I said right then and there, ”That’s exactly what I’m going to do.” Because of that epiphany, I now have a vehicle for my voice.  As a result, I would like to dedicate the initial launch of this blog site to my friend Andre. I would also highly recommend his blog for those readers interested in private equity, venture capital and market commentary discussion.

Continue reading

Email this to someoneTweet about this on TwitterShare on FacebookPin on PinterestShare on Google+Share on LinkedInDigg thisShare on RedditShare on StumbleUponShare on Tumblr