I just received a copy of my latest book, Loan Modification For Dummies, which I co-authored with real estate and foreclosure self-defense specialists, Ralph R. Roberts, Lois Maljak, and Paul Doroh.

While I knew we were publishing a smaller book – 9.3-by-6.1 inches and only 288 pages, rather than the standard 9-by-7.4 inches, 360-384 pages – I really didn’t fully envision the look and feel of the book until I held it in my hands. I was pleasantly surprised. The decision to take a “less is more” approach was right on target. People facing foreclosure don’t have a lot of time to trudge through a massive manual to find a solution to their problem. Loan Modification For Dummies delivers the answers as fast and straightforwardly as possible, showing homeowners how to work through their lenders to…

• Keep their home.
• Lower their monthly mortgage payment to a truly affordable level.
• Pay significantly less for their home over the life of the loan.

One of the most interesting things I learned while co-authoring this book is that leading up to the mortgage meltdown, many loan originators and lenders were involved in very irresponsible and often fraudulent practices in selling mortgage loans and getting them approved. They were approving loans for borrowers knowing full well (through their own underwriting guidelines) that the borrowers would never be able to afford the payments.

I’ve heard many people argue that borrowers should have known better – they should have known what they could and could not afford to pay on a monthly basis. However, I think it’s understandable. Many borrowers met with loan officers under the assumption that nobody in their right mind would approve a loan that the borrowers could not afford. They assumed that loan approval equated to affordability. Unfortunately, loan originators and lenders were not in their right minds – greed clouded their judgment to the point at which no checks and balances were in place to control borrowers’ desires.

Yes, people should not take out loans they can’t afford, but banks should not loan money to people they know are likely to default.

Fortunately, borrowers who can prove that loan originators or lenders acted inappropriately in selling them a loan or approving it can use any proof they have to their advantage in negotiating an affordable loan modification. In Loan Modification For Dummies, we explain the rules and regulations in place to protect borrowers, show how to audit a mortgage loan, and provide guidance on using proof of fraud or misconduct as leverage in negotiating a loan modification to save your home from foreclosure.

If you need the book, I feel sorry for your misfortune and truly hope that this book can help you overcome your setback and regain your financial footing.

For more about the book, including links for ordering a copy online, visit Loan Modification For Dummies.

If you’ve read the book, please post a comment to let me know what you think of it along with any details you’d like to share about your experience in obtaining a loan modification.

FOX News ran a story this morning entitled “Countrywide Ex-CEO Angelo Mozilo Charged With Fraud” by reporters Peter Barnes and Joanna Ossinger. My first thought was “Well, it’s about time!” My second reaction was to wonder “Where were the regulators?”

In the years leading up to the mortgage meltdown, foreclosure epidemic, and global economic crisis, rampant fraud was being perpetrated across the United States and probably around the world, too. We have regulators in place to monitor banking and investment activities, so where were they? Where were they when Countrywide and other mortgage lenders, driven by greed, were systematically transforming the American Dream into a nightmare? Were were they when Bernie Madoff was fleecing investors? How could a handful of individuals and companies hijack and wreck the largest economy in the world?

Aren’t regulators supposed to prevent these sorts of things from happening?

My co-author for Foreclosure Self-Defense For Dummies, Ralph R. Roberts, was recently named the official spokesperson for Federal Loan Modification Law Center – a legal firm that renegotiates mortgage loans with lenders on behalf of borrowers/homeowners facing foreclosure. The primary goal of a loan modification is to lower the monthly mortgage payment to a level of affordability, so homeowners can keep their homes and lenders can convert a non-performing loan into a performing one.

A loan modification accomplishes its goal by having the lender adjust one or more terms of the original mortgage loan:

• Lower the interest rate.
• Convert an Adjustable Rate Mortgage into a low-interest fixed-rate loan.
• Extend the term – to spread the payments over a longer period of time.
• Reduce the principal balance (somewhat rare).

In addition, lenders are often willing to forgive penalties or late fees and roll delinquent or missed payments into the principal balance, so homeowners can pay off the delinquencies over time rather than all at once.

According to Ralph, homeowners may be able to negotiate with their lenders on their own behalf, but an attorney can often negotiate a much better deal.

Today’s edition of The New York Times carried a story by Joanne Kaufman entitled, “A Shift in Real Estate Books.” The story is about how publishers are scrambling to get books to market to help homeowners and real estate investors with the downturn in the housing market and increasing foreclosures.

The article begins by focusing on the fact that even rich celebrities are having trouble. Recently, Ed McMahon, famous for being Johnny Carson’s co-host and for making lots of people happy with his Publisher’s Clearing House giveaways, has run into some financial trouble and is facing foreclosure on his $4.8 million in home loans.

My co-author for several books, including Foreclosure Investing For Dummies and Foreclosure Self-Defense For Dummies, Ralph R. Roberts, heard about Mr. McMahon’s problems and called him to offer his expert assistance. Ralph has been through foreclosure himself and works with another guy to audit home loans. In many cases, they are able to reveal problems with loans that force the lender to renegotiate. McMahon turned down the offer. Personally, I think Ed McMahon made a big mistake in doing so. Ralph is what I would consider the top expert in foreclosures in the U.S.

Well, maybe Mr. McMahon has enough money to buy a copy of Foreclosure Self-Defense For Dummies. If he doesn’t, we’d be more than happy to send him a free copy.

As one of the co-authors of Foreclosure Self-Defense For Dummies and Foreclosure Investing For Dummies, I keep an eye out for web-based resources that can potentially aid homeowners in the fight to reestablish their credit and save their homes and help investors find promising opportunities. One such site recently came across my radar screen: Distressed Property Blog.

Duane LeGate, creator and manager of the blog, is in the process of populating it with articles on avoiding foreclosure and investing in distressed properties. Recent topics include the following:

• Graceful Exit Strategies to Get Out from Under a House You Can’t Afford
• Negotiating Payment Issues with Lenders
• Trimming Your Losses with a Short Sale
• Researching a Property before Making an Offer
• Evaluating Current Market Conditions