FAQ

Debt Advocates

FAQ

Debt Settlement FAQ

(First Read Click Here)

Q. Will I pay my creditors directly while in the program?

A.That decision is up to you. Debt Advocates doesn't advise you to stop
paying your creditors, but this does weaken the chance of settling your accounts at

favorable or the estimated forty (40%) minimum.

Q. Are my creditors going to continue to call me?

A. We will determine who or when to contact and provide any information or when to

negotiate your accounts. It might be that the individual creditor representative who is

calling you is not in the right department to settle any accounts but in collections.

ALWAYS answer the phone and document the callers' name, company they are

calling from, the last four digits of the account in question, and their
call back number on the creditor call log.

Q. Will my creditors continue to contact me by mail?

A. Your creditors may also attempt to correspond with you by mail - this is allowed.

If you receive any correspondence from your creditors, please forward all

correspondence to the address Debt Advocates requests. Keep in mind

that your creditors are also sending copies of correspondence and statements
to our office as well.

Q. Will this program have a negative effect on my credit?

A. Yes. All debt management programs, such as, Consumer Credit Counseling,

Debt Consolidation as well as Debt Settlement have a negative effect on your credit.

However, with our program, once your individual accounts are negotiated and settled,

we request your creditors to report these accounts satisfied and in good standing.

Furthermore, we at Debt Advocates offer a Credit Correction Program to

dispute all other negative information on your credit reports.

Q. Why should I use Debt Advocates to settle my debt instead of

handling it myself?

A. Our negotiating team is experienced in getting you the best reduction in debt, fees,

and hassling with the creditors.

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Loan Modification FAQ

What Is Loan Modification And How Does It Work?

According to the HUD website, a Loan Modification is a permanent change in

one or more of the terms of a mortgagor's loan allowing the loan to be reinstated

which in turn results in a payment the mortgagor can afford. It is interesting to note

that in most cases a homeowner in need for help will indeed qualify for a loan modi-

fication. To ensure that you understand what a loan modification will actually do for

you, consider the following facts:

A loan modification is indicated when the original loan that is secured by a resi-

dence has terms that make it impossible for the homeowner to continue making

the payments, thus risking the loss of the residence.

Loan modifications are not the same as debt consolidations, refinancing loans,

or even forbearances. Instead they are long term solutions for rising interest rates

or other hardships that are threatening to overwhelm the budget of a homeowner.

Loan modifications stop foreclosure proceedings and instead reinstate the loans as

they are being modified.

There are some other facts that explain why lenders are actually in favor of working

with borrowers and their legal specialists in order to negotiate equitable loan modifi-

cations. All or portion of the outstanding principal and interest, past due escrow, late

fees, and even costs may be rolled into the loan modification and thus will not be lost

revenue to the lender.

Since they are spread over a long period of time, they do not pose a problem to the

borrower. Modified mortgages may use a step rate approach or an extended term

methodology to provide for the repayment of the due and past due funds. The lower

payments ensure the repayment by the borrower while to the lender the added time is

actually money in the bank in terms of yet to be earned interest due.

Foreclosure is avoided and even though banks routinely foreclose on properties and

sell the homes to other buyers for a fraction of a price, the slowing housing market

has made it difficult for banks to unload such properties and then recover any addi-

tional funds from the previous homeowners. Loan modification is a fiscally much

more attractive solution for any lender.

A modified loan protects the credit rating of a borrower and it also helps lenders in

showing less defaulting loans in their portfolio. This of course makes a good

impression when the financial institution is wooing potential investors.

Here are the requirements you must meet to be considered a good candidate

for a loan modification:

You have a verifiable reduction in income or your payment adjusted out of your

affordable price range. It is required that you are currently employed or have another

source of a stable and predictable monthly income that is verifiable. The home for

which you are seeking to obtain a loan modification must be your primary residence.

                                                                          DEBT ADVOCATES
                                                        PO BOX 3555
                                                        PHOENIX, ARIZONA 85030-3555
                                                        (480) 208-5510
                                                        (954) 208-5515 FAX

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