The subprime, housing and foreclosure 3-in-1 crisis combo meal has spawned a new mortgage vocabulary, the star member of which is the phrase "loan modification," which refers to any change(s) to a mortgage loan’s payment or other terms, ostensibly intended to help a distressed homeowner hold onto a home.

It sounds simple, but intrepid homeowners who have braved the labyrinthine bizarreness of a mortgage servicer’s loss mitigation department during the odyssey that is a loan modification application process know otherwise.

It’s surprising, then, that very few comprehensive how-to books are devoted to demystifying and illuminating the loan modification process for the literally millions of homeowners whose inquiring minds would like to know.

Book Review
Title: "Loan Modification for Dummies"
Authors: Ralph R. Roberts and Lois Maljak
Publisher: Wiley, 2009; 288 pages; $19.99

The subprime, housing and foreclosure 3-in-1 crisis combo meal has spawned a new mortgage vocabulary, the star member of which is the phrase "loan modification," which refers to any change(s) to a mortgage loan’s payment or other terms, ostensibly intended to help a distressed homeowner hold onto a home.

It sounds simple, but intrepid homeowners who have braved the labyrinthine bizarreness of a mortgage servicer’s loss mitigation department during the odyssey that is a loan modification application process know otherwise.

It’s surprising, then, that very few comprehensive how-to books are devoted to demystifying and illuminating the loan modification process for the literally millions of homeowners whose inquiring minds would like to know.

The call of the wildly clamoring masses (OK, that was a little overly dramatic) has been answered by Realtor and foreclosure expert Ralph R. Roberts and his "second in command," Lois Maljak, with their new book, "Loan Modification for Dummies."

"Loan Modification for Dummies" is a thorough, realistic and useful tool and resource for homeowners hoping to convince their lenders to change the terms of their loan. Whether you are just looking to decide whether you’re a good candidate for a loan mod, are trying to figure out whether to hire help with the project (and who to hire), or if you’re looking for a soup-to-nuts Do-It-Yourself guide to loan modification, this book lives up to the For Dummies series slogan of "Making Everything Easier!"

The book respects the complex nature of its subject matter, dividing its approach into five parts. The aim of Part I is to get the reader "Up to Speed on Loan Modification," giving a basic definition of loan modification, explicating the process and how to expect it to unfold, helping readers assess their current situation and whether other options for resolving a hardship might be more appropriate, and walking readers through the process of deciding whether to hire the project out or go solo.

(Hint: hire. "Hiring a skilled professional almost always delivers better results than trying to get your loan modified yourself.") …CONTINUED

Part II helps the reader get off on the right foot, with an orderly, well-planned approach to submitting the application for a loan modification, and a system for keeping the entire process on track, including instructions for maintaining a conversation log and file of documents. Part III advises homeowners on the sequence of events following the application and through negotiating a final modification, including how to evaluate and counter lender modification offers that do not render the mortgage payment sufficiently affordable to resolve the problem on a long-term basis (a very common issue, in my experience).

In Part IV, Roberts and Maljak provide the ultimate reality-check of the book, devoting an entire fifth of the book to "Dealing with an Uncooperative Lender." The authors brief readers on the several key, oft-violated lending laws; how to have their own loans audited to detect any violations; and how to hire a professional to help determine whether a lawsuit is a sensible strategy for obtaining the desired results.

(Hint: often, it’s not. "Many lenders are willing to correct broker wrongs but for obvious reasons would prefer to do so out of court and beyond the media spotlight.") Readers will find a number of other strategies for "applying some legal pressure."

If you’re a homeowner with a legitimate hardship preventing you from making your mortgage payment who also can document a steady income that would empower you to make a modified mortgage payment, by now I hope you’re already planning to buy this book. As a real estate broker and attorney who formerly negotiated a number of loan modifications, I can tell you firsthand that this system for understanding and conducting yourself in the course of applying for and negotiating a mod will help you and help your professional negotiator get the best results for you.

However, if you weren’t already there, Part V should put you over the top. In this Part, any Dummies’ book’s prototypical Part of Tens, the authors provide two lists of 10 tips. The first one equips you for long-term success at the endeavor of obtaining a loan modification and to help you avoid becoming one of the more than 50 percent of homeowners who obtains a loan modification and re-defaults on their mortgage.

These tips are very good — not super-fancy gyrations, but just really fundamental, really important strategies for, well, keeping your home for a long, long time. They range from moonlighting to make more money to modifying other debt.

The second list shatters 10 loan-mod myths, addressing topics ranging from bankruptcy to paying upfront fees to a loan modification professional.

If I had to make a criticism of "Loan Modification for Dummies," it would be that the average homeowner who is a novice at these matters might not be able to make an informed decision about how to proceed from the first chapter without also at least first flipping through "Foreclosure Self-Defense for Dummies" and "Bankruptcy for Dummies."

While there are no guarantees in the world of loan modification, this book contains a full toolbox of knowledge that could help you save thousands of dollars (in reduced monthly mortgage payments) and might even save your home — compared with the $19.99 cover price, that’s not bad at all.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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