Replies to This Discussion

Permalink Reply by Leanne Noble on July 22, 2011 at 10:58am

Hell Harry: 

 

Yes, I read the same article - and I agree.  The only modifications that I have seen be successful is where they combine it with forebearance by adding the arrears on to the end of the loan, stretch it for 40 years and lower the interest rate - but even on these, the "trial amount" and the modified amount are still a couple of hundred dollars more on the permanent modification.  In addition, if there is a first and second with the same lender, they do not address the second (as in SS).....  I am hoping to find some direction that this client can push to the next level.....Thanks for your input - appreciated.

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Permalink Reply by Leanne Noble on July 23, 2011 at 2:13pm

Thank you Brian - I'll do that.......

Brian Avery said:

Call Chad @  http://www.elitemitigations.com/  he is a good source for this kind of question. Although I do not believe you can gurantee locking in the same payment as the trial period

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Permalink Reply by Tammy Davis on July 24, 2011 at 4:13am

I successfully completed my own modification without being delinquent on payments and help a handful of people at no charge to complete a modification.

Drop me an email at [email protected], I will try to help.

Tammy ~

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Permalink Reply by Marivel Costanza on July 24, 2011 at 5:44am

 

 

Dear Leanne:

 

         I help several families with successful modifications until my office's legal team recommended that we discontinue the practice.  Now, I refer my clients to NACA (a non profit organization or HOPE and they've help hundreds of families keep their homes.  I prefer NACA because they're pro-active and aggressive.  If you have any questions, they may be able to help, go to www.naca.com.

 

Best wishes,

 

Marivel

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Permalink Reply by Leanne Noble on July 24, 2011 at 6:04am

Thank you Marivel.  I also refer people to Naca; however, I have emailed them a few times, and I have never received a reply, but I will give it another try.

Marivel Costanza said:

 

 

Dear Leanne:

 

         I help several families with successful modifications until my office's legal team recommended that we discontinue the practice.  Now, I refer my clients to NACA (a non profit organization or HOPE and they've help hundreds of families keep their homes.  I prefer NACA because they're pro-active and aggressive.  If you have any questions, they may be able to help, go to www.naca.com.

 

Best wishes,

 

Marivel

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Permalink Reply by Tara Polley on July 24, 2011 at 7:49am

Hey guys, I am a housing counselor at HOPE. So, let me clarify a few things. A trial period does not guarantee a permanent modification, and a permanent modification may or may not be the same dollar figure as the trial period. It is a 3-Step process to determine modification eligibility.

The first step is to determine what 31% of the homeowner's gross monthly income is, and if they are currently paying more than that. The trial period will be based on this 31% calculation. Then, the homeowner submits their paystubs, bank statements, tax returns etc to the bank, and the bank will verify that the amount they've based the trial period on is correct. (If they work overtime or make a fluctuating income, the perm mod will be based on the new calculation)

Second, they will calculate what the loan amount is -including arrearages (btw Leanne, that is not a forbearance, it's called recasting. A forbearance is different) first play with the interest rate then term (30 years/40 years) to see what they need to do to get the homeowner to a 31% payment. The floor is 2% over 40 years. The will not go that low, if they can achieve the 31% payment without doing so. If the lender cannot reach the 31% payment by adjusting the interest rate and extending the term, ONLY non-Fannie/Freddie loans may consider a principal reduction. PR's are very rare, and the investor has to be participating. 

Finally, they will pull credit to determine unsecured debt and other expenses to be sure the homeowner can afford the 31% payment without other expenses interfering. For instance, if there is a high car payment, or school tuition, or credit card debt that continues to create a deficit in the budget after the modified amount, they will deny the mod. 

 

Hope that helps. 

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Permalink Reply by Jackie Thompson on July 24, 2011 at 8:57am

My own personal modification with Chase had the same payment for the trial payment and the first five years of the permanent modification.  The interest rate was reduced to 2% for the first five years.  It will then adjust one percent each year for years 6,7,8 and 9 and then will be fixed at 5.25%.  I used to do work for Titanium Solutions and I believe Chase gives better modifications than a lot of other mortgage companies. If the permanent payment is higher than the trial, I would suggest the homeowner not to sign the acceptance papers and try to negotiate the original lower payment.  Continue to prove and send in the ongoing income loss or decrease.

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Permalink Reply by Marivel Costanza on July 24, 2011 at 5:10pm

Thanks Tara for such good info. I would like to learn more about HOPE's services and assistance programs. We should talk!

Leanne, I have a NACA office nearby and I also volunteer. I'm lucky to have access to a couple of counselors for advice. I recommend joining and paying the $20.00 membership so your client will be able to schedule phone counseling appointments online.

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Permalink Reply by Christina Conrad on July 25, 2011 at 2:35am

Thanks for the article Harry..very interesting reading...not surprising, but interesting.

Harry Clay said:

I was just reading this interesting article from yesterday's C.A.R.newsletter, all about how hard it continues to be to obtain a successful modification: 

http://www.pe.com/business/content/leslieberkman/stories/PE_Biz_D_l...

Most tellingly, it stated:

"Principal reductions are nearly impossible to receive. In Los Angeles and Fresno only 5 percent of loan modifications included some degree of principal forgiveness."

Yet when I speak to homeowners who have received NODs, I think the vast majority of them are still mistakenly convinced that principal reduction is imminent, even as the countdown to the Trustee Sale continues.

 

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Permalink Reply by Christina Conrad on July 25, 2011 at 2:40am

Good to know Tara..thanks for that..

Tara Polley said:

Hey guys, I am a housing counselor at HOPE. So, let me clarify a few things. A trial period does not guarantee a permanent modification, and a permanent modification may or may not be the same dollar figure as the trial period. It is a 3-Step process to determine modification eligibility.

The first step is to determine what 31% of the homeowner's gross monthly income is, and if they are currently paying more than that. The trial period will be based on this 31% calculation. Then, the homeowner submits their paystubs, bank statements, tax returns etc to the bank, and the bank will verify that the amount they've based the trial period on is correct. (If they work overtime or make a fluctuating income, the perm mod will be based on the new calculation)

Second, they will calculate what the loan amount is -including arrearages (btw Leanne, that is not a forbearance, it's called recasting. A forbearance is different) first play with the interest rate then term (30 years/40 years) to see what they need to do to get the homeowner to a 31% payment. The floor is 2% over 40 years. The will not go that low, if they can achieve the 31% payment without doing so. If the lender cannot reach the 31% payment by adjusting the interest rate and extending the term, ONLY non-Fannie/Freddie loans may consider a principal reduction. PR's are very rare, and the investor has to be participating. 

Finally, they will pull credit to determine unsecured debt and other expenses to be sure the homeowner can afford the 31% payment without other expenses interfering. For instance, if there is a high car payment, or school tuition, or credit card debt that continues to create a deficit in the budget after the modified amount, they will deny the mod. 

 

Hope that helps. 

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Permalink Reply by Tara Polley on July 25, 2011 at 4:03am

No problem. :) 

 

Marivel, HOPE is a free service to Homeowner's, made up of 7 non-profit agencies that staff the hotline. It is primarily an educational resource and budget counseling session to provide a homeowner with the opportunity to explore their options. Once we gather their financial information, we can tell them if they look like a good candidate for modification, or suggest a backup option and an exit strategy. We also suggest other areas of their budget they can focus on to save money and balance their budget. I'm proud to be a part of it. :) 

 

Jackie, what you received was a HAMP modification, so Chase did not make the determination of the terms of your modification. Those terms are standard for HAMP guidelines. It is unwise to reject a modification offer if you receive one, unless you truly cannot afford it, or there has been an error, especially if you are in foreclosure. Otherwise, the lender can say they offered you a modification, you denied it, and they have no further obligation to work with you. It's important to remember it is not a negotiation. It is simply math, based on the criteria I explained above, so no matter how many times they review, it will be the same result. If it seems that the modification does not solve the problem, it may not be the mortgage that is the issue, but rather another area of your budget. (Credit cards, car payment etc)

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Permalink Reply by Leanne Noble on July 25, 2011 at 6:56am

Thanks Tara, appreciate the detailed info....  I had to rethink, and understand your comment regarding forebearance and recasting.  I have been advised that if the person does not accept the modification amount  that amount is final and the modification will be denied....do you have any input on this?  The negotiator said it amount was set by the investor and is final.  Also, any input on HOPE services - thanks.

Tara Polley said:

Hey guys, I am a housing counselor at HOPE. So, let me clarify a few things. A trial period does not guarantee a permanent modification, and a permanent modification may or may not be the same dollar figure as the trial period. It is a 3-Step process to determine modification eligibility.

The first step is to determine what 31% of the homeowner's gross monthly income is, and if they are currently paying more than that. The trial period will be based on this 31% calculation. Then, the homeowner submits their paystubs, bank statements, tax returns etc to the bank, and the bank will verify that the amount they've based the trial period on is correct. (If they work overtime or make a fluctuating income, the perm mod will be based on the new calculation)

Second, they will calculate what the loan amount is -including arrearages (btw Leanne, that is not a forbearance, it's called recasting. A forbearance is different) first play with the interest rate then term (30 years/40 years) to see what they need to do to get the homeowner to a 31% payment. The floor is 2% over 40 years. The will not go that low, if they can achieve the 31% payment without doing so. If the lender cannot reach the 31% payment by adjusting the interest rate and extending the term, ONLY non-Fannie/Freddie loans may consider a principal reduction. PR's are very rare, and the investor has to be participating. 

Finally, they will pull credit to determine unsecured debt and other expenses to be sure the homeowner can afford the 31% payment without other expenses interfering. For instance, if there is a high car payment, or school tuition, or credit card debt that continues to create a deficit in the budget after the modified amount, they will deny the mod. 

 

Hope that helps. 

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