Vincent Alicandro has spent decades in various financial services jobs in Massachusetts. But about six months ago, a new kind of business came his way in the form of homeowners in dire financial straits, desperate to modify their loans but unable to make headway with their lender.
Alicandro became a broker of sorts, calling on lenders and suggesting new loan terms that allow homeowners to keep their houses for reduced payments. He charges a fee, but says he only collects money if he can successfully execute an agreement with the lender – in a dozen cases thus far, he said he’s had a 100 percent success rate, and learned some surprising things about the big, bad lenders in the process.
Vincent Alicandro
Title: Loan Modification Consultant, Wealth Management Services; Worcester
Age: 57
Experience: 24 years
Q: So how did this get started?
A: My whole business is based on referral … mostly small business owners or attorneys or accountants who have done business with me say “Vin, let me throw one at you.” And I didn’t know a whole lot about the industry, but I was willing to invest a little bit of time. It’s very labor-intensive. And I didn’t realize that people were frustrated because they weren’t able to get anybody on the phone. So I’m used to being persistent, and it all started to evolve.
Q: What’s the process then?
A: OK, you as a potential customer are referred to me. I ask some basic questions – “do you reside in the home? Do you have reportable income?” If yes to both of those, then I’m willing to hear your story. The end result is always the same, you’re behind on your mortgage, and you are having a great deal of difficulty getting the lender to understand that you want to stay in the home and you can pay on a monthly basis. …Everything’s computerized, all the lenders have customer service representatives, but all they can do is politely say, “We’ll send you some paperwork and see if you qualify for any of our [loan modification] programs.” Nobody in my realm of prospects and clients can qualify… The ultimate goal would be to get the lender to put [extra] payments on the rear end of the mortgage and then reduce the monthly payment to something that’s affordable. And then I determine, based on standard banking formulas, what these people are qualified to pay. And then I write up a recommendation that that’s what they pay, and the lender says yes.
Q: How do you establish that you’re working for such-and-such person?
A: The client has to send a letter to the institution saying that on this particular transaction I am acting as their agent … It’s almost like a stalemate, but not intentional. Every lender that I’ve dealt with – Bank of America, Wells Fargo, TD Bank … not a single one of them wants to foreclose.
Q: What do you charge for this?
A: $2,000-$2,500, it all depends on how much work is involved. Basically, the people don’t have a lot of money, so what I say to the lender is, “OK, we’ve agreed to a deal, this next month, what they would pay you, they’re going to be paying me for my services.” And the lender says yes because they really don’t have a choice.
Q: How do you contract with customers?
A: I have a two-page contract that I’ve had for 20 years, and I say I think the fee is going to be approximately this. There’s no monies up front. If you feel that we’re successful, here’s the invoice.
Q: Why can’t they do this negotiating themselves?
A: They don’t speak the financial language. For instance, I’ve had many debates with the representatives of lenders, “I’m sorry ma’am, or sir, but the loan-to-value is never going to be in a qualifying number [for your modification program], so we have to just throw that out the window. Do you want to own the home, or would you rather have these nice people own it and you take $1,600 a month versus $2,400?”
Q: Is it tough to sell this idea to lenders?
A: Not as much as I thought it would be. Most of them are very, very frustrated with their system. They feel sorry for their clients, and they wish they could do more. They just don’t have the authority to do that.
Q: So it’s a matter of rank-and-file employees who can’t actually make these decisions. So you have to be persistent, and get past the the customer service people to do anything.
A: That’s exactly it. The biggest surprise for me was that the lenders sympathize with the plight of the [clients], but have no means of helping them.
Alicandro’s Top Five Elements For Dealing With Loan Trouble:
- To homeowners, Alicandro advises that they alert their lender immediately if they have a serious financial setback. Face the problem head-on, and don’t be ashamed of your financial trouble – it happens to a lot of people.
- Alicandro is persistent in trying to speak to a lender – customer service employees have no power, so it’s important to get someone in charge.
- A surprising amount of homeowners have stopped receiving all communication from their lenders. Alicandro advises borrowers to save up all their payments and wait for communication on where to send the money.
- Major lenders usually just tell homeowners to re-apply endlessly to their mortgage modification programs, which is often fruitless activity for those who’ve already been rejected once.
- Borrowers often re-apply to loan modification programs repeatedly, but if they’ve been rejected once, it’s unlikely they’ll be accepted later on.
