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Feldman Law Center – Bob the Homeowner versus Net Present Value

Feldman Law Center – News by Feldman Law Center — A little known aspect of the Obama Administration’s “Making Home Affordable” plan is the “Net Present Value” test which essentially determines whether a loan modification or a foreclosure and sale will provide a better return for the investors behind the mortgage in question. The calculation takes the proposed monthly payment in a home loan modification and multiplies it over the life of the loan (payment x 12 months x 30 years). If that total comes in above what a sale and foreclosure would yield, the calculation would favor a modification. If it falls short, the calculation would lean toward foreclosure and sale.

Foreclosures in many scenarios will favor the investors while a modification often works to the advantage of the servicer. For the investor, a foreclosure and subsequent sale may result in a loss of principle but money coming back to the investor can be re-invested in other vehicles which can provide yield and returns. The disadvantage for the servicers is that, without monthly payments from the property, they lose the fees they were able to charge the investor for handling the payments, billing, and communication with the homeowner. A loan modification, on the other hand, benefits the servicer by keeping the payment stream, and the fees they can charge on it, alive. The modification hurts the investor by forcing a mark to market valuation which reflects the loss on the mortgage (also known as a haircut) due to a lower interest rate and, if applicable, a reduction in principle.  

The third party in the game is the homeowner (Bob) applying for the loan modification. It’s likely that the homeowner has heard of “Making Home Affordable” and is very aware of the 2% interest rates that were part of the headlines generated by the plan. Naturally, that’s the rate he wants. Unfortunately, getting Bob a 2% interest rate is not in the interest of either the investor or the servicer of his mortgage. For the investor, the lower the interest rate goes the bigger the haircut. Memorializing it in a modification will turn a theoretical haircut into an actual loss on the books. For the servicer, an interest rate at that low level can push the NPV score to a point where the test favors foreclosure over modification. If Bob’s property isn’t considered a lost cause it’s extremely unlikely that he’s going to see anything close to that 2% rate.

One of the other variables is Bob’s commission based income. His payments are going to be capped at 31% of his average monthly income, which has dropped considerably. In fact, it’s dropped so much that even by maxing his payment out at 31% of his monthly pay he falls below the estimated foreclosure and sale score. Conditions dictate foreclosure according to the net present value test.

The investor, seeing a score that clearly calls for foreclosure takes a look at sales statistics for Bob’s town and his neighborhood. Nothing is moving and foreclosure backlogs are growing. Average bids at auctions are coming in at less than 60% of the loan amount. Less than 2% of foreclosed houses are selling at auction. The estimate on what the property can realize in a foreclosure and sale is way too high for current conditions. If the house sells, and it’s a big if, it won’t be for anything near the price used in the NPV calculation. The investor decides to pull back on the foreclosure due to the regular hits he’s already taking in his portfolio and his aversion to putting another property into the portfolio. The pullback on the foreclosure doesn’t mean he’s going to allow for a modification, however. There’s a haircut waiting with the modification as well. This property is going to sit in limbo while things work themselves out.

There won’t be any communication regarding this stalemate between Bob, the servicer, or the lender. From Bob’s point of view the servicer’s people aren’t responsive and aren’t calling him back. The truth of the matter is that the servicer’s processors know as much about Bob’s situation as Bob does; not much. The sides settle in to the day to day of nothing happening which stretches to months.

The commentary from homeowners that have tried to modify their mortgages under the guidelines of Making Home Affordable runs along a thread very similar to that of our theoretical Bob. While much of the delay can be attributed to overload, staffing, and training issues at the lenders and servicers, the stalemate between servicers and their investors is bogging things down as well. The Safe Harbor Bill, passed by Congress in May, was aimed directly at this standoff. Its main objective was to remove the threat of lawsuits filed by investors when they felt that the servicers were acting on their own best interests in approving loan modifications.

While there may be a conflict of interest currently, neither side wants to go to war over this issue. Despite the increased autonomy given the servicers, it’s likely that they will still want to be on the same page with investors to preserve long standing relationships that have worked well over time. It therefore looks like limbo, status quo, and homeowners waiting for a knock on the door will rule the day and the near term.

Those homeowners seeking to avoid this quagmire would be best served to hire legal representation familiar with the process to either navigate the Making Home Affordable guidelines or to modify their mortgages independently from the government program. With over 600 successful home loan modifications negotiated on behalf of their clients, The Feldman Law Center is well suited to guide you through your loan modification. Call them today at (949) 544 8224

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Feldman Law Center ? The Specifics of President Obama?s Plan

President Obama’s historic presidency began in the midst of possibly the worst financial crisis since the Great Depression.  The housing and real estate markets seemingly jumped off of a cliff, taking with it the financial stability of every other industry.  Obama passed sweeping legislation to help homeowners make payments and deal with the financial crisis while staying in their homes.  This plan in turn helps lenders who need homeowners to continue making their mortgage payments.  A key part of this plan is the loan modification process, which now helps homeowners even more.

The federal government is relying heavily on loan modifications with the Helping Families Save Their Homes Act of 2009 and Making Home Affordable Program.  Under these programs, current borrowers who are at imminent risk of default may qualify for a loan modification as long as the immanency of the default is tied to a specific event.  By specific event, they mean a pending interest rate increase in your mortgage loan or a demonstrable change in economic situation such as your spouse losing his/her job or a severe medical condition.

Ultimately, the plan centers around the thought that struggling borrowers can stay in their homes as long as they make their monthly payments (regardless of the sharp decline in value).  The plan has many backers, including billionaire Warrant Buffet.  In a recent letter to shareholders, Buffet wrote “Commentary about the current housing crisis often ignores the crucial fact that more foreclosures do not occur because a house is worth less than its mortgage (so-called ‘upside-down’ loans).  Rather, foreclosures take place because borrowers can’t pay the monthly payment that they agreed to pay.”

In the end, regardless of what the cause is for the foreclosures, homeowners are looking for ways to stay in their homes and everyone is hoping that Obama’s plan is the path toward that reality.  For homeowners facing foreclosure, struggling to make payments, and overwhelmed by creditor and lender phone calls, having someone they can trust by their side could make a huge difference.  During these difficult financial times, California loan modification attorneys are doing their best to be more than just an attorney; they are trying to be a confidante.  

A California loan modification attorney can sit down with you and discuss your options and if any new options were opened up under the Obama plan.  At the Feldman Law Center, our California loan modification attorney team is up to date with all federal and state laws governing loan modifications.  FDIC loan modifications, California loan modifications and more all fall under our jurisdiction.  We can help you find the program that’s right for you and your financial situation.

Millions of California residents are investigating California loan modifications as a possible solution to their financial troubles and as a way to avoid foreclosure.  If you find yourself in this situation, you should contact a loan modification attorney and get as informed as you can about all the state and federal loan modification programs available to you.

Visit Feldman Law Center at feldmanlawcenter.com or call 800-588-0425.

channel 4 exposes call center fraud in India

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www.washingtonpost.com/america Want to see what it looks like inside an Indian call center? Watch and click here: newsweek.washingtonpost.com

Hitler Internet connection is down so he phones his ISP and has to explain his problem to a Indian call center. Created by hitlerrantsparodies/aceman90001 Clip From Downfall (Der Untergang) The Hitler Rants Parody’s Group www.youtube.com

Jimmy Kimmel Live – Jimmy Skypes Indian Call Center for Tiger Woods Joke

Colorado Springs, CO — November 3, 2004

Colorado Call Center Management a professional call center consulting firm located in Denver, CO, will host a seminar “Increase Call Center Efficiency Quickly, Guaranteed!”, on November 19, 2004 at Homewood Suites Colorado Springs — Airport. This seminar will be in an effort to enhance call center managers, and give them insight to save money, increase production, and overall efficiency in their call center.

Attendees will leave this seminar having learned new tips and received guidance pertaining to improving their call center. “It’s exciting to help call center managers, owners, and operators see how they can better their organization. So many call centers are in disarray and need help perfecting their process flows, scorecards, benchmarking, and more,” says Edward Basquez, the seminars main speaker, and CCCM Corporation’s owner. The seminar will feature scorecard demos, call center efficiency, benchmarking, call center agent performance, and more!

For more information on this seminar, please contact Edward Basquez at 303.667.2903 or through email at edbasquez@cccmcorp.com. To immediately RSVP for this seminar please email your information to seminarrsvp@cccmcorp.com. Please visit CCCM Corporation’s website at www.cccmcorp.com.

About Colorado Call Center Management Corporation

CCCM Corporation was started to help call centers worldwide better themselves through consulting services. CCCM focuses on performance scorecards, efficiency analyzing, process integration, setting up strategic framework with relevant process flow and Gant charts. Call centers acquire advice to save them redundant overhead and increase their performance by at least 20%. CCCM Corporation is also acknowledged for its pay-for-performance incentive programs.    

Edward Basquez, CCCM Corporations owner and head consultant has experience with AT&T Broadband, Mile High Telecom, USURF Communications, Public Service Company of Colorado, Excel Energy, Alliance Data, and more. He has successfully saved failing call centers, corrected call centers that were having many different issues and slowing loosing revenue and direction, and helped those that just desired some advice to take their call center to the next stage. Colorado Call Center Management is headquartered in Denver, CO.

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St. Louis, MO — March 12, 2009

Approximately 82 percent of call center customers who are satisfied with the call center quality of service they receive are willing to listen to a sales offer, according to a Maritz Research study of contact centers. A new whitepaper, entitled, ” Does Service Sell? The Financial Impact of Customer Service in Call Centers” looks at how customers react to experiences with call centers, and how call center management can use this information to improve their call center performance from both a service and revenue perspective.

“There are still a lot of call center managers who don’t realize how they can demonstrate the impact of their call center’s service on the company’s bottom line by putting in place the proper call center metrics,” said Rich Brose, director of research services for Maritz Research. “In today’s tight economy, tools like call center training programs can teach customer service reps to be successful sales professionals, transforming the call center into a much-needed revenue stream.”

To learn more about the results of this call center study and how to begin transforming your call center into a source of revenue, download the free call center optimization whitepaper today.

About Maritz

St. Louis-based Maritz is a sales and marketing services company, which helps companies achieve their full potential through understanding, enabling, and motivating employees, channel partners and customers. Maritz provides market and customer research, communications, learning solutions, incentive initiatives, meetings and event management, rewards and recognition, travel management services, and customer loyalty programs.

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Nashville, Tennessee — August 27, 2007

The BrandonWayne Group, a leading provider of call center recruiting services and programs, announced today the launch of Phase One of www.CallCenterClassifieds.com , the Call Center Industry’s Premier Employment and Resource Website.

“We felt that the call center industry was under represented on the web for employment specific resources,” said Michael Maffei, President and CEO of the BrandonWayne Group. “We want to help both employees and employers in this area.” Throughout 2007 and into 2008, we will be adding additional features to the website and announcing key strategic partnerships that will enable visitors to experience a single-source solution for their call center employment needs”.

The largest issue facing employers today is the ability to recruit and retain qualified call center personnel. CallCenterClassifieds.com seeks to assist both the employer and prospective employee by providing comprehensive job search and job posting capabilities that will ultimately lead the right candidate to the available job opportunity.

In the very near future, CallCenterClassifieds.com will also offer a special section on bi-lingual employment; (www.SpanishCallCenters.com). We will also provide targeted opportunities in more than 40 geographic markets nationwide, where we can custom tailor a program specifically for companies within selected “hot” call center job markets (www.PhoenixCallCenters.com, www.TampaBayCallCenters.com, etc,). Combine all this with a resource area that will include a forum for industry professionals, vendor advertising and services, consulting and short-term projects and the ability to prescreen applicants on-line, a lot of exciting features will be added in the coming months.

“CallCenterClassifieds.com was created to provide applicants, employers, employees, vendors and other interested parties, with a comprehensive website dedicated to Call Center industry employment and information,” explains Maffei. “Visitors to the site will find that it is easy to navigate and full of helpful resources.” With the initial release we are excited at the potential this website brings to the call center industry and are looking forward to Phase Two and Three in the coming months that will bring exciting additions and enhancements to the website”.

For more information please visit www.CallCenterClassifieds.com.

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www.callcenterjobtips.com Really well written movie that pokes fun of both American and Indian cultures but with respect for each. Filmed partly in Seattle, but mostly in India. You see an American call center director has his section outsourced and he reluctantly travels to India to keep his job for a few weeks more till his stock options vest. He finds a culture he slowly comes to respect and embrace through an Indian woman he falls for and friendship with his coworker. The story plays out over many location shots in and near Mumbai. You almost feel you’ve been there by the end of the film. A great Indian cast really puts this one over the top with many laughs. Your next call with an Indian call center won’t be the same.