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Tonight I had the opportunity to attend an hour and a half seminar on toxic mortgages. Just when you thought the only hazardous material in your home could be lead based paint or asbestos, we now find out that our mortgage may be toxic.

The seminar was hosted by an attorney who specializes in sticking it to the bad guys and his marketing director who specializes in warming up the crowd and preparing the audience for the soon to be savings. In this case the bad guys happen to be the bank that issued you the toxic mortgage. The predator they seek is an adjustable rate mortgage.

Banks, in their opinion are the primary reason we find ourselves in this economic malaise. Banks are responsible for thousands of hard working citizens committing themselves to more home than they can afford and over extending their monthly obligations through continual refinancing. Banks are responsible for global warming. Banks have become the anti-Christ.

This process begins with your initial payment of $3000, followed by six monthly payments of $1000. The attorney then will slap a lis pendens on your property. They didn’t come out and say it but it was hinted that while your property is undergoing litigation, you may not want to make your monthly payment.

Your loan documents are requested from your lender. This can take up to three weeks for arrival. Their research is based upon uncovering a missing disclosure, document or a misrepresentation that could cause your loan to be modified. Plus, most banks are not in a litigating mood these days and public perception is not on their side. Furthermore, attorneys can be more successful when it comes to negotiating with lenders than most mortgage holders.

The process can take about 6-9 months to reach a conclusion. The desired result is based upon court precedent, California v Countrywide. A successful outcome can reduce your mortgage balance to 90% of the appraised value and also secure a market interest rate on the new balance.

The current number of homes in default or mortgages facing resets has also created companies that specialize in loan modifications. They will attempt to negotiate with lenders as well in an attempt to obtain more favorable loan terms. These companies may be less expensive. Its worth exploring your options before you make a decision.

Tags: adjustable interest rate, forensic loan audit, loan modification