Everyone has challenges at some point or another in their life; each of our challenges is different, but in today’s times, a lot of people are falling behind on their mortgages and other Debt. How you handle it can make all the difference in the world. Here is what experts say is the best way to deal with it, They talk about Forbearances and Modifications and give some advice on the best way to deal with past-due payments.
Jack: You’re pulling me…
Marcy: What are you doing here?
Jack: You’re pulling me and pushing me the chair for people only saw what went on before.
Marcy: Oh my.
Jack: So, we want to make a video. I shouldn’t be laughing; it’s a very serious topic.
Marcy: This is serious, you know, and we’re gonna; this is this information we want to put out there.
Jack: You know the economy is not great now. A lot of people are behind on. I’m going to talk about mortgages, but your debts, and we’re lenders, but I’m also a borrower. I want to give you some tips or some suggestions on what to do if you’re behind on your mortgage or it could be a credit card payment or a car loan.
Marcy: Anything that you’re behind; you’re not making your payment on time.
Jack: That’s great. This applies to Gelt Financial, but I’m sure 90% of it, 99% of it applies to every lender.
Jack: The first thing I want to say is there’s nothing to be ashamed of or embarrassed about. If you can’t afford your payment, things happen in life, and things happen to everyone, including I’ve been there. I’ve been there as a result of the Great Recession in ’06 to ‘011. I was behind on things; a lot of people were. If you Google great Business Leaders like the Milton Hershey, the founder of Hershey Chocolate, the Heinz Family, most great businesses have had failures along the way, and they’ve had periods of bankruptcy, Abe Lincoln. There’s been a tremendous amount of unbelievably successful people who have had failures and have had problems paying their bills for different reasons. So don’t be embarrassed. It’s not a fun thing to talk about; I’d rather talk about other things. Everyone wants to talk about better things, but it’s sometimes a reality. So, the first thing I want to say is don’t be embarrassed about it and don’t hide from it or be ashamed. It happens to people. What defines us is not what happens to us but how we react.
Marcy: We do about it.
Jack: That’s exactly right. What we do, bad things and things happen to people all day long. There’s not much we can do about it; there’s things we can do but not much. But how we handle it is really what defines us as a person. So just a couple things that I have in no particular order, and Marcy has things too because we compare notes is, be realistic, what you can afford, what you can do. Don’t come up with some pie in the sky expectations and stick your head in the sand and ignore the problem because it’s going to get worse, I can promise you it’s going to get worse. Deal with it honestly, and if you have to, sell it or refinance it early, but if you wait long enough, you may not be able to sell. Or if you sell it, the fees and the costs will eat into so much of what you have. So, if you’re in a situation where you have equity in a property and you can’t afford it, sell it, or refinance it or do something. We’re going to talk about modifications in a minute, but I guess come up with a plan and be realistic. A lot of people are just not realistic; they’re fooling themselves.
Marcy: I’m going to add something now too with that point and then I’m going to add that we all in life, we have to communicate, okay? So, if you’re in this situation and you missed the one payment, and then all of a sudden, the second payment, now you’re 60 days behind, and you’re not communicating with the lender, that’s the worst thing that you can do because after three months, typically, you could be into pre-foreclosure.
Jack: Or it could be the first month.
Marcy: It could be, it depends on the terms of your loan. You could be after 30 days; you can be considered into fall. So, all these things could happen to you, but if you communicate with your lender, reach out to them, explain to them, they all have customer service numbers you can call; you can speak to anyone at any lender to figure out a solution to the problem. But if you don’t communicate and you just keep ignoring that your payment’s due, it just keeps building up and building up and building up.
Jack: It’s going to get worse.
Marcy: It gets worse, and it’s like we, like as lenders, that’s the first thing I do with my borrowers. If they miss a payment, I, like consciously, take the time out of my day. And trust me, I’m really busy, and so is Jack. But we take the time out to reach out to the borrowers and say, “Hey, you missed your payment. Do you want to talk about it? What can we do about this?” And about 50% of them, sometimes, Jack, they don’t respond.
Jack: And it’s not good.
Marcy: And it’s not good because then now we’re after thirty days, and then it’s more of a problem, and they don’t communicate, and then we don’t know what to—you know a lender sometimes then will be like, “What am I supposed to do? I have to put this in legal,” and you know we don’t want to put anything in legal; we just ask for communication. So, in general, out there in the world, if you’re in a situation where you missed payments or you’re going to have a problem, you must communicate with the lender, so that’s just my—
Jack: You’re right. I have to emphasize, don’t hide, don’t stick the bills in your drawer and ignore the voicemails or emails. I would say go the extra mile and communicate often. What I mean by that is, uh, leave the lender’s messages, send them emails. If they don’t return your calls, you be the one to call them. If you’re waiting for them to call you, it’s not a good situation. You call them overtly, communicate, communicate too much because I know the reality here. You gave the example, I think you said 50% don’t communicate, 50% or whatever, the ones who communicate.
Marcy: We work with them.
Jack: Has there ever been a case where if they communicate?
Marcy: No, we work with them.
Jack: If a borrower communicates and a borrower is trying, most lenders will work with them. Again, we’re going to talk about—I’m going to talk about forbearance and modifications of what they are in a minute or two. But the bottom line is if you communicate often and communicate doesn’t mean calling and not leaving a message. I don’t know if you have this happen.
Marcy: I have, like, a conversation; that’s the whole point.
Jack: You know, people say, “Oh, I tried to call yesterday,” and I said, “Did you leave a message?” am I right?
Jack: I don’t know what it is with people; they think it’s—
Marcy: Or send an email, I know that we’re in a very electronic world, but emails are great too.
Jack: Yeah, reach out and touch somebody. But when I say not physically, you know, call them.
Marcy: Have the interaction and have communication.
Jack: And if they don’t return your call, keep calling them. The pressure and the onus should be on you to reach out to your lender, not on the lender to reach out to you; you’re the one who needs to reach out to your lender. Even if you have nothing to say, even if you say, “I can’t come up with the money for three months or six months or a year.”
Marcy: What can we do about this?
Jack: That’s right.
Jack: So, that’s a good segue to there’s forbearances and modifications. So, what we do, and a lot of lenders do, is uh, if you can’t pay for whatever reason, uh, let’s say, let’s make up an example, let’s say the payment was two thousand dollars, and you can only afford a thousand dollars for three months, call up, approach your lender, say, “Look, this is what happened, business is bad, or whatever reason, I can’t do this. Will you accept a thousand dollars for three months?” And hopefully, the lender will enter into a forbearance or modification.
Jack: Yeah, an agreement.
Marcy: It’s an agreement, and they both parties agree to it, you know; they may sign paperwork. “I agree to this, and this is how I’m going to follow through with it.”
Jack: Get it in writing; make sure it’s a written agreement. Look, most lenders don’t want loans to go bad; you know, borrowers always blame the lender when something goes wrong. That’s just—
Marcy: We don’t want our loans to go bad.
Jack: No, that’s humanity; everyone’s always blaming someone else. Do you ever have someone who—this is just a segue—you’re a very sociable person; you have like a million friends?
Marcy: Very sociable.
Jack: I’m a hermit, but you’re sociable. So did you ever have any of your friends come home and say, “I lost my job because I was lazy, and I sucked?”
Marcy: No because they make excuses.
Jack: Right, it’s always the company, the bosses’ fault. Did you ever have anyone say, “Oh, I’m getting divorced because I was a lousy spouse?”
Marcy: No, 50% takes two people to tango.
Jack: But everyone always blames someone else; it’s amazing in this world.
Marcy: Well, that’s what, like even if you go to and discuss things in life, you can’t control how someone else behaves, but you can control how you react to them. So, it’s the same thing with this.
Jack: Yeah, same thing. So, you can—most lenders, I don’t wanna say all, but a lot of lenders will do it. Forbearance or modification; it will change the terms. Let’s say, for example, I gave an example of the Thousand to two thousand. Let’s say you can’t make a payment for two or three months; call the lender and tell them that. See if they’ll let you forbear or put that on the back end.
Marcy: Right, or they can modify your loan to spread it out further. That’s a lot of the lenders will do that. If you have 15 years left on your loan, they’ll change it and make it 20 years, and they spread your payment over that term, so your payment goes down. So, there’s so many, so many ways to handle it.
Jack: If you have open and honest communication with a lender and don’t BS them, just be honest with them, tell them whatever happened.
Marcy: Tell the truth.
Jack: Tell the truth, whatever it is. Don’t sugarcoat it; don’t “oh, you know, a business is bad, been bad for three months, but next month I’m going to do 28 million dollars in sales.” Just tell them the truth and see if you can do forbearance or modification on a loan, and that will get a lot of people there. Now, sometimes you’ll enter into a forbearance, and you can’t meet that; it happens. That’s—
Marcy: But communicate.
Jack: Again, it goes back to Marcy says, communicate.
Marcy: I’m so big on that.
Jack: She is.
Marcy: I even tell all my—all my borrowers, even after we close the loan, I’m like, you need to stay in touch with me if there’s any issues, you need anything, you call me, email me anytime. I explain to everyone I am approachable; I want to hear from you.
Jack: And most lenders that way. The other thing I have to tell people is come up with a realistic plan. Put your income and expenses on an Excel spreadsheet and come up with a realistic plan that you believe in. And then get your lender on board. Don’t get your lender on board with some pie in the sky BS plan but make it a realistic plan that you believe in, and you think you’ll be able to hit and convey that plan and convey that path to a lender. Look, a lender wants his money back; that’s all they want.
Marcy: Well, that was the whole point of the loan.
Jack: That’s the point of the loan.
Marcy: I mean, but at a certain point, if there are issues, they are going to work with you because the point is to get paid back.
Jack: They have to work with you.
Jack: The reality is that we have it now too. We have a bunch of businesses on the books. A lot of restaurants are really having problems now.
Marcy: It’s all the food costs, the products, so much.
Jack: The food costs, the labor costs.
Marcy: This is crazy.
Jack: So, we’re effectively unofficial partners of the restaurants.
Marcy: Yeah, we’re riding it with them.
Jack: We work with them if there’s communication.
Jack: So again, they present us a plan, and if there’s communication, we work with them. So really, you know what it comes down to: don’t run and hide.
Marcy: And just tell the truth.
Jack: Overly communicate. Come up with a plan and try to get out of the problem, or if you think you can’t deal with it early.
Marcy: Then sell.
Jack: Sell the property, get whatever equity you have, or refinance. And if you can’t sell it or you literally just walk away— We, I don’t want to tell where, but we had a situation
Marcy: We have someone that they gave us the date and loan foreclosure.
Jack: That’s exactly right.
Marcy: And you know what? They walked away. You know what? There’s a solution. It may not be exactly what you want it to be, but there is a solution, you know?
Jack: You know, we’re judged as uh, human beings, not when things are going great, not when we’re at the top of our game, making a fortune, you know, looking good when we win the lottery. But really, when we go through troubles and stress, that’s when we’re really judged as human beings. And I would tell people, and I personally, going through it, I’m embarrassed through it, but I was taken outside, I was beaten up, I was kicked, bruised, bloodied nose, broken ribs during the Great Recession. It happened to me. It happened to a lot of people. Welcome to my world. I can go home and cry, or I can move on, but you need to deal with things.
Marcy: You moved on, though.
Jack: You moved on. Yes, thanks.
Marcy: Yeah, look at you now. You’re sitting in a room with me, making videos.
Jack: That’s right. I’m overweight. I used to be tall. I’m short. Oh my God. I’m choking. I’m shorter. I lost my hair. I got gray. No, I’m joking around. Communicate. Nothing to be embarrassed of. Be realistic and reach out to your lender. And if you get that done, that’s—you’re going to be…
Marcy: Saving yourself.
Jack: You’re going to be 90% there if you’re listening to this video. Don’t start with all the other stuff, and don’t—it gets ugly very quickly. And lenders, you know, it’s funny, you—whatever you’re gonna throw— some people have a tendency to threaten lenders. “Oh, I’m gonna sue you. I’m gonna do this. I’m gonna do that. I’m gonna get a lawyer. I’m gonna do this.” Honestly, lenders don’t care. Whatever you’re going to threaten them with, they’ve been threatened 3000 times before. It’s meaningless. At the end of the day, if you owe them the money, they’re going to win in court in 99.9% of the cases. If you go—some of these foreclosures, uh, attorneys, usually, all they can do is stall. Makes it worse, either way. That’s our advice. You can take it or leave it. If you have any questions because this is a really important issue—
Marcy: Yeah, ask us the questions. We will answer them.
Jack: This is an important issue. I don’t want to be doing it to me. I don’t know if I told you this, maybe you know. I’m not, uh, after the recession of ’08 to ‘011, I found myself representing borrowers who are fighting with their lenders in a restructuring practice. And I had a very active restructuring practice where I was an advocate for the borrowers trying to work deals for lenders. So, I put on—I was on the other side of the table, and, uh—again.
Marcy: That just tells you the experience level that you’re dealing with here.
Jack: Well, it’s the communication. It comes down to communication and coming up with a realistic plan. Okay, take care, have a great day. If you like our YouTube channel, um, what are you supposed to say if you like it?
Marcy: Hit the buzzer. Like it, share it.
Jack: Hit the bell or the buzzer. Like it, share it. Leave comments. We’ll answer your comments. Have a great day.”