comments
Making Home Affordable Mortgage Refinance & Modification Program
Email
 Print
|
I’ve been hearing a lot about the government’s Making Home Affordable mortgage refinance program. Having looked at refinancing our mortgage a few months ago, but not pulling the trigger, I was interested to see if we could benefit from this program (we can’t, but that’s not a bad thing). It’s designed to help people get more favorable loan terms in scenarios where their home has lost value. A lot of lenders won’t refinance a loan if the value of your home is less than the loan amount, it’s simply a matter of math; this program looks to help alleviate some of that.
This program, introduced by the Obama Administration as part of the Financial Stability Plan, is estimated to help 7 to 9 million people. They estimate the Home Affordable Refinance Program will help 4 to 5 million and the Home Affordable Modification Program will help 3 – 4 million. What this means is that you should act quickly if you want your application processed quickly. The longer you wait to apply, the larger the backlog will grow, so let’s get to the program!
What is the Making Home Affordable Program?
There are two parts to the program. The first is Home Affordable Refinancing, which helps borrowers refinance a loan backed by Fannie Mae or Freddie Mac. It’s designed for people who are current on their mortgages and are unable to refinance because the value of their home has fallen by too much. The second part of the program is Home Affordable Modification, which assists in the modification of a loan, rather than a refinance. It’s designed for people who are “struggling to make their monthly mortgage payments.”
Making Home Affordable Eligibility
Home Affordable Refinancing: The first rule is that your loan has to be backed by Fannie Mae or Freddie Mac, which you can confirm on their websites (Fannie Mae Loan Lookup, Freddie Mac Loan Lookup). If you’re uncomfortable looking it up online, you can call Fannie Mae at 1-800-7FANNIE and Freddie Mac at 1-800-FREDDIE, 8AM to 8PM Eastern Standard Time).
Next, use the government’s website to determine your eligibility by answering this 4-question qualification form. I can save you some time, if you answer NO to any of the four questions, you’re not eligible for Home Affordable Refinance.
Home Affordable Modification: You aren’t required to have your loan backed by Fannie Mae or Freddie Mac for Home Affordable Modification, so you can skip that step and go straight to the 5-question qualification form. Again I can save you some time, if you answer NO to any of the five questions, you don’t qualify.
I Qualify, Now What?
Call the bank or mortgage lender that owns your mortgage and ask them for the Home Mortgage Refinance or Modification program application. You’ll need the following (I’d call for the application and then start collecting this information):
- Information about your mortgage, such as your monthly mortgage statement and
- Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.
- Your most recent income tax return.
- Information about any second mortgage or home equity line of credit on the house.
- Account balances and minimum monthly payments due on all of your credit cards.
- Account balances and monthly payments on all your other debts such as student loans and car loans.
Are you looking to take advantage of this program?
(Photo: orvaratli)
{ 984 comments, please add your thoughts now! }Related Posts
 By Jim |
 Stumble It! Bookmark reddit.comTags: Making Home Affordable, Mortgages, Refinance Apr 10, 2009 | Read more in Government |
Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.
The middle class gets nothing out of this. The people who could not afford the house get to walk away, big deal their credit is destroyed, it was destroyed before they ever were offered a sham mortgage. The banks get bailed out, by you guessed it the middle class. So we are back to rich people issuing crappy loans to people who can’t afford them which drives up the cost of all the crap they are buying on the middle class and if the loans go bad the rich get bailed out.
I can see where you may think that, but I see this as major back surgery. It’s very helpful if you NEED it, but if you’re healthy, you don’t want it. People who have never been late and who have managed their credit responsibly will come out of this stronger than the ones who didn’t.
It only helps certain people, not everybody
WHY DONT THEY TELL YOU THAT WHEN YOU FIRST ASK FOR HELP???
Hogan,
You couldn’t be more wrong. My husband and I made over 200k the year we purchased our home and consider ourselves middle class. In the 3 years since we purchased the home we have never had a late payment even though my husband’s business failed, I was laid off and our homes value lost 75k. This program will help people who are paying their mortgage without killing their credit.
I believe this program is a help. But what I dont understand is how you can call yourself middle class with an income of over 200K a year. My mother and who purchased a home together dont have a combined income of $100K. You may not be rich but your past the middle in my opinion.
BN Honest, It depends on where you are from and the cost of living in your area. for example I live in Cleveland where middle class earnes 100k or less a year, where as california Middle class is like 300k or less per year.
I just wanted to post back and give some encouragment to those in the home made affordable program. We successfully went through the program and after three months were offered a permanant modification. We had a 30 year fixed rate with PMI. Hope this helps someone!
Hogan is right. It is the responsible middle class that is getting completely hosed in this deal. The only stimulus they get is that the government is making it possible to refi more than 80% of the home’s value without taking PMI…pretty worthless.
I agree that those of us who have acted responsibly are unfairly going to end up getting “stuck with the bill” for this mess. But don’t underestimate the the value of being able to skip PMI. That would have saved me $1200/year, and a total of over $6000 before I was able to get my LTV ratio down to where I could cancel the PMI.
As happens a lot, this probably started out good, but was ripped apart and had little changes put in everywhere that made it so the government could say ‘hey, we’re doing something to fix it’ while not actually helping those who needed it in the first place.
When this whole thing started it was people who had bought too much house with bad loans losing their homes. Now throw in those that are current with good loans who now owe $500K on a house worth $350K and think they have made a bad “investment” in a house that want out because it will take 10 years just to appreciate back.
People who bought too much house with bad terms will lose their house. No matter the help program out there.
saladdin
I called Freddie Mac and Fannie Mae to find out if either backed my loan. Both said no, but the Freddie Customer Service person said that other groups were participating in the MHA program. So I called my lender to get more info and they told me my loan was backed by Fannie Mae. Moral of the story: I suggest calling your current lender first.
I am on the same page as saladdin. There are some people in this situation where they bought at the wrong time and really just to lower their mortgage payments, but don’t have any equity in their homes.
I am getting ready to pull the trigger on refinancing pretty soon, not with any help from this program though. The rates are probably at some of their lowest levels.
One of the fortunate or not so fortunate, got the lay off bug last yr..am making payments am current…I called lender, I qualify, but lender is slapping hefty fees, adding approx 7k on in closing costs to my loan….they are asking for 6 mos escrow of my taxes, title fees etc..is this legit..not sure how to check
I just contacted my mtg co, Countrywide, and they said I qualifed for this Home Affordable Refinance program and told me my interst rate could be lowered to 5.25 but it would cost me 2.25 points which was $9,000 at closing. I’m confused, I thought this was suppose to help? Does anyone know if this is correct or is Countrwide being greedy again?
There are no fees for this program. I don’t know why Countrywide is insisting that there are. In fact, here is the government’s site about it: http://www.treas.gov/press/releases/reports/modification_program_guidelines.pdf
I smell a scam on their part.
sounds like you are refinancing not modified you want to be modified. Refi costs money and the 5.25 is bs im getting 2% on my mod of a 430k mortgage but it goes to 5 in five years. Im still walking because they won’t reduce the principal which makes the mod pointless as I will be back in the situation five years from now. By walking I will be able to FHA in two years and the market will still be bottoming. Promise you that. Then the mods from this program will mature to there new rates and you will be doing this crap all over again in 2015. Promise you that too. If homeowners with upside down mortgages don’t receive these write downs in principal you will not see values in your homes for some time. And those who are buying short sales now are the direct problem for more market drops as per sf value keeps dropping with every short sale and foreclosure. You will not receive serious consideration for those mod programs without verifiable hardship. I got a dream payment from 3,200 to 1,240.00 and I still must short sale it as the 1,240.00 is for five years and I see no real action taken to stabilize housing values or to increase them. The only way to increase values is to stop short sales and the only way to stop short sales is to cut the principal it is truly the only way. As i am in the situation facing a payment that is better than I can rent for I am still faced with the future. The future is bleak with 250k upside down and everyone buying homes around me for half what I paid for mine. If your neighbor short sales his home you have to also or you must get a princ reduction make sense? Unless you paid it off you are going to lose serious money as you won’t ever sell it even in ten years at 5% you will not recover 250k in losses. So what’s the point. You can wish people to stay but if you are smart you will take the short sale as well as the mortgage forgiveness act expires in two years. Which means if they don’t renew it you would have to pay taxes on short sale. Kind of a sticky situation. If the bank merely gave the princ reduction in the amount they gave me in princ forbearance I would have stayed and would still be underwater but not so bad as to wait for recovery. Even keep the home forever. But right now I would never be able to repay and they keep adding everything they forgive to the back end they aren’t really forgiving anything they are greedy and stupid as it was there fault the values dropped. By short selling to begin with. They should have never allowed short sales or foreclosures they should have rented the homes out and kept them off the market until they figured out what to do. They created this mess they now have the responsibility to homeowners like me that dunked there life savings in there homes to fix it. And shut down lying mortgage brokers that promised a fixed payments by shorting escrow bait and switching interest rates and so on.
i don’t expect folks will get a good deal through this program. probably will still need to shop around for the right interest rate and closing cost combination.
I’m currently working on a MHA refinance with Countrywide with total closing costs of about $3000. I’m going from a 6.5% interest to a 5.25% rate.
Since I’m going through the MHA program I won’t have to add PMI into the loan which is what stopped me from refinancing about 4-5 months ago. That will save me about $2500/year and mean that I’ll save about $208/month on my mortgage – just over one year to pay back the closing costs through lower payments.
I’m with Countrywide as well and started my trial payments in June. I haven’t been offered a contract yet, but I do have a Fannie Mae loan. They have said twice that they are going to accelerate the process. Now they say they are awaiting approval from Fannie Mae for this modification. That seems strange.
My question is: How long were you in the trial period and do you have any suggestions for getting them moving on this?
Hi Liz,
I am with Wells Fargo and have a Freddie Mac backed loan. I started the process in August/September, began making the “Trial Payments” in November and made the last “trial payment January 01 and was told to submit an updated hardship letter, pay stubs (I sent in 4 of the most recent), and current household expenses. They reviewed the previous information and since it was less than 90 days old…all I had to do was draw a line thru the previous document date … if the information was still correct and the same, initial then re-sign, re-date EVERYTHING. Make sure you put the last 4 of your SS and the loan # on each piece of documentation you send as well. Then, include copies of your most recent pay stubs…signed, dated, last 4 of SS#, loan #. If there are 2 or more names on the mortgage…each person needs to do the same documentation on each piece of document you have to submit. You may also be required to submit copies of your checking/savings account…I did not on the 2nd phrase (after the last “trial payment” was made) documentation. I re-submitted this information on January 06, got a phone call on January 12…”documents have already been processed with underwriting, expect modification packet in 2 weeks via UPS”. Received documents today with modification agreement.
I don’t know if this helps you…but my processing time with Wells Fargo has been fantastic! I have to say that by having my PMI representative on board from the get go, really seems to have made a HUGE difference in how fast my modification application was handled. There is a lot of good information on this site about various agencies and, i.e. HUD, PMI representatives on your current mortgage, that can be very helpful in getting your application processed in a more timely manner. Good luck and keep us posted. Darla
Same situation as KatieB, here. I’m leery about buying down my points and increasing the amount of my mortgage by 6 or 7 thousand dollars. Have you found out anything else, Katie?
Adam, Countrywide told me that they are the only ones who could refinance the loan for me on this program.
This program is a joke, where the government money went I have no clue.
I have a first and second. Arm I know but didn’t then first house and boa talked me into it since I wanted to move in 5 years.
My house is worth nothing in N Florida right now so this is awesome for me.
Heres the deal. No options, they pick the rate, the banks JACKED all closing fees and even jacked the value of points to get a better rate.
Where the government money went I have no clue. I’m going to pay more and out of pocket costs of around 6500 (just closing costs) via BOA and they will NOT even tie in my second.
This is a joke, and criminal and the banks are only taking advantage of the 105% level to refinance. Criminal.
I have not heard back from Countrywide. Go figure. It was my understanding with this program credit was not a factor (I have good credit) but Countrywide insisted on running a credit report. When I questioned this they said it was a requirement. I also was told they were the only ones who could do this since they were the mortgage company. Anybody know if this is true? I am confused by all of this as everything I have read about the program Countrywide is telling me something completley different. I still don’t get why the need to charge points when the goverment is already paying them to refinance the loan. I am hoping to speak to someone today who is in the process of refinancing with Wells Fargo to see what they have been told. Will keep everyone posted.
My countrywide quoted 4.75% for Affordable home refi but with 2.5pts. i called ditech and was told that many point is standard. buyte way you don’t have to refi through your orginigal lender – just read about this on the .gov site. And they ran my credit report.
Another things most don’t know is if you have second, as long as the first is under 105% you qualify. Even if second cause it to excced this ltv. Anybody getting any other discount points? 2.5pt seems quite excessive.
I have spoken with several loan consultants at CW and have yet to received the same answer. My loan is backed by Freddie Mac w/PMI and was told not eligible but they are expecting to launch into these type loans in appox. 2 weeks…w/PMI is the “catch”. One consult had the nerves to asked if I could come out of pocket with $8K because Freddie Mac has a $2500 cap limit. If I had $8K sitting in the bank, then I probably wouldn’t be reaching out for help. The banks gets this money, but still expect the borrowers to pay. Im beginning to feel “trapped”, as they are quick to tell you that they are the only one that can help with the loan.
From comments I’ve seen on Clark Howard’s website there are much better loans out there WITHOUT points. What I am hearing is that you should shop around. Unfortunately, I think with so many people trying to refi the banks might be smelling an opportunity to exploit people and start charging a bunch of points. No wonder the American public was outraged that our tax dollars bailed them out…
I also called Countrywide about the MHA on the modification. I was sent to the refiance dept. I could roll the first and second together with 4.875% interest. Then they wanted a app. fee of $475. This is a joke. I wanted the modification. This program is terrible. The banks are just trying to get rich again. I read the terms on the MHA website. It seems the the mortgage companies are making their own rules.
MHA program sucks. It doesn’t help.
I got my loan documents from Countrywide/BoA yesterday.
My original loan was a 7/1 ARM, 6.25%. I got a 5/1 ARM at 4%, enabling us to save ~$275/month (not planning on staying at my house for more than 3 years from now). About $3k in points and closing costs, but that was rolled into the loan amount. The only thing out-of-pocket, I was told, was a $400 application fee, but the documents seem to indicate that might get rolled in as well.
FWIW, and before anyone jumps to any conclusions, I’m a proud member of the middle class and we’ve done everything right. We have great credit, bought a place we could afford, fully pay off credit cards every month, etc etc. So I’m quite satisfied with being able to refinance through this program when otherwise I wouldn’t be able to b/c of how terrible the housing market has tanked (I live in AZ). I was intending on signing everything and returning it first thing this morning, but reading these stories is making me wonder if I’m exceptionally lucky or naive.
I did everything the way you were suppose too. I can’t sell my house because of the market. I am in this situation because of a divorce. I have excellent credit with the only debt being the house. I can’t sell because all the foreclosed houses are cheaper than mine.
I just got off the phone again with Countrywide. This guy was way better than the first lady I talked too. But, buying points and such is all I can do to get the rate down.
It just seems like the MHA says one thing, and the banks and what not are doing another. All the while using the bailout money. All I wanted was a lower payment before I can’t make my payment, and start loosing my excellent credit.
Again, I called for the modification, and got the refiancing.
Wow, I’m amazed at people who can be so judgmental. Just because things seems to be going well for them, they don’t understand why others aren’t the same way. We all have different situations my friend. As a freelancer, I have to extend credit to clients. My clients are in the hospitality and real estate business. They stopped paying, I couldn’t pay credit cards, moved for a new job, renting in another city, paying mortgage on other house, can’t sell, can’t rent, it’s domino effect and can even hit those who usually make decent decisions. For those who think they are so much better than the rest of us, I do wish the best for you, that you keep your jobs and businesses. It’s rough for all right now. I’m hoping the WAMU modification goes through and isn’t a rip-off. Fingers crossed someone buys our financed vehicle. I’m alright driving our 11 yr old car. No one wants it though.
After reading around and talking with my mortgage broker, it appears that if you have a loan that is backed by Fannie Mae, you are free to refi using anyone you wish. If your loan is backed by Freddie Mac, at this time you can only refi through your existing loan servicing company (i.e. Countrywide).
I’m with Freddie Mac and Countrywide. I can get a better loan than my current through Countrywide, but not as good as I could get through an independent broker. My broker thinks that Freddie Mac loans will be open to independent brokers within a few weeks, but whether that is accurate or wishful thinking on his part remains to be seen.
Hi everyone, Countrywide Bank
I got a 4.375 w/2.375 points at closing. I’ll role about 2100 in closing costs into the loan and save roughly 300/month for the life of the loan. I seen it in writing so things are going well besides a inflation in my loan amount out of nowhere. payoff + closing costs is a simple figure. They addad another 2 percent or so with no back up/rhyme or reason. I’m communicating with them now and trying to straighten out this typo. Has anyone elses loan amount been inflated? I don’t think it’s intentional so I crossed out the incorrect info on all my loan docs, initialed it, and signed them. Good luck everybody.
Good info JT. I’ll have to see if my loan is from from Fannie or Freddie.
Stan, keep us posted. Good job staying on top of the numbers! How were the closing costs explained? It seems if they wanted to slip something extra in, it could easily fall under closing costs.
We applied and waited 5 months to see if we could qualify for the
Loan Modificaiton. Our idea was to maybe lower our Mortgage
expense which had gradually moved up over 300.00 per month over a 2 years period.because of incresed taxes in the escrow. Our 1568.00
payment was offered a 167.00 a month savings for 4 months..if you paid on time…on a trial period..then a 1% savings..on interest for 5 years
It was more about public relations than real savings..as 167 dollars is 10%…savings. Maybe that is all they intended, but at first. I heard there were some people behind on their mortgage that could be reduced by 2/3rd..or pay only 500 a month for six month until you could re secure
higher income from a job loss. Honestly, 167.00 per month..did not
make me move very fast to sign on. I would rather just pay the old note and pay on time when I can..and pay the late charges if I have to…when I can’t. There was no real help to us..even though our income went from 6400 per month to 2800 per month..or my mortgage being 52% of my take home household income.
My story was just as honest and straight forward as anyones.
167.00 a month..and I was suppose to be happy about it.waited 5 months to tell me this. Whew! We had a party.. we were so happy!
yea! right! so much for Obama’s stop foreclosure efforts. Paid the banks…to move some numbers around…but there is no real big
savings that I could see.
Yes, a lot of people bought homes which were not affordable. Some probably in hopes of selling and making a profit sometime down the line. When considering the price of rent verses mortgage, I’m sure many chose mortgage. Not all people who bought are irresponsible. Many lost their jobs and are now wondering if they should deplete their savings or apply for Obama’s plan. I’m sure that the people who cry the loudest about the people who apply for the government’s help are the same people who would be first in line if they were in the same cicumstance. I thank God our home is paid, but thinking back, there were times when my husband and I had hard times and borrowed from the equity of our home or credit cards to help stay afloat. Each and every day, there are more and more people who are losing their job, facing foreclosure. To all the people who cry “irresponsible people,” I say, “I hope you’re able to keep your job, and if not, have enough savings to sustain you until you do. And when that runs out, then what?”
I can’t speak for anybody else who’s complained about irresponsible people, but personally I have no problem with those who have lost their jobs or been affected by health issues getting some assistance to keep their homes. Certainly there are a lot of people whose troubles are not of their own doing.
What I do object to, though, are people who were so eager to take big risks because all they could see were big dollar signs, and were willing to throw caution and common sense out the window. Or those who have lived way beyond their means, buying big-dollar toys so they can play today on money they may or may not have tomorrow.
I’m sorry their problems, I really am; but I don’t feel it’s fair for them to say, “I took a risk and it didn’t turn out like I’d hoped, so now I’d like everybody else to pay the consequences for me.”
IMO, the message that sends is exactly the opposite of what it should be. Instead of people learning that irresponsibility and risk-taking can have dire consequences, what they’ll learn is that they don’t have to worry about those consequences somebody will bail them out.
So, if we’re going to remove the consequences for bad decisions, how will everybody learn the lessons they should learn from this mess? How on earth can we expect that a collapse like this won’t just happen again, because somehow we’ll be wiser next time?
Not sure if anyone has mentioned or noticed this yet, but we (so far) qualify for the modification. My husband got laid off from a 250,000/year job and we had twins that were born 17 weeks early – causing me to quit my job to care for their special needs. We’ve managed to pay all of our bills on time and have no credit problems – just need help because there aren’t any jobs available making what my husband has always made. Well, they say we qualify, but they have a 3 month trial period where they make sure you can afford the new payment. While making the new payment (on time mind you), they will turn your original loan payment in as delinquent! So, for 3 months, your credit gets hit. While we appreciate the help – we were trying to avoid getting bad credit. Nice.
thanks for telling about turning original loan payment in as delinquent. i kept asking my servicer how it would ding my credit and your post answered something they wouldn’t.
I just called Countrywide (Now Bank of America) to modify my loan since I lost a significant amount of income. I am current on my mortgage but can’t afford it anymore. She offered me a Refinancing option to extend my load from a 15 to a 30 year with 12k in closing costs. I asked her isn’t the MHA program without any closing costs? Don’t they drop your payments to 31% of your income for the first 5 years? She says, “That’s Phase 2 of the program & it’s not out yet” Also she said to participate in the phase 2 program I have to stay current for 12 months.
Is that true that Phase 2 is not out yet? Do I really have to stay current to participate? My load is a Fannie loan. Please help.
I, too, have been calling Bank of America since April, and am current on my mortgage. Am seeking to refinance to lower my monthly mortage payments, on which I am current. Have been told, since May, that because I have PMI, I need to wait for Phase 2 to be released. Noone knows when–every two weeks, they tell me “we expect it in two weeks..call back..” Does anyone have any information on this “Phase 2″? It feel like just an excuse. Makes it very difficult to trust that this program is legit.
Lulu, there is no phase 2, its a tactic the refinance dept uses… Call back & ask for the modification dept. Tell the mod dept that you dont want to refinance, you only want to modify..
It bewilders me, that the banks are so deceitful, when they are required to provide a federal program to HELP people who are struggling–NOT hinder the process. I guess I’m confused between the Home Affordable Refinance Program and Home Affordable Modification Program. I thought the Refinance program would be appropriate for us–to help us refinance our (current)mortgage payment. We have little equity, as we’ve only been in the home 3 years, and PMI–our payment is maxing us out. I’ll check the modification guidelines instead of waiting til the cows to come home for Phase 2.
I have no idea what Countrywide is talking about. My loan is through Wells Fargo and I’m being offered the 31% with no closing costs. They are adding 2 years to my loan, dropping my interest rate and taking over $1,000/month off my mortgage. The loan is at 2% for the first 2 years, then 3% for the 3rd year, 4% for the 4th year, and 5% till the end of the loan – 31st year. They call it the Obama “Making Home Affordable” Home Modification plan.
Shanon, Were you late on your mortgage? If you were not, did they try to push you to the refinance rather then the modification?
is this true what Shanon says above about the delinquent status even if you are paying on time all along and never missed any payments?? I’m about to send off the papers today, and am a little scared of blowing my awesome credit way down!
That is the same thing Countrywide (BoA)tried to do to me. I wanted the MHA, not refiance. I can read and know exactly how I qualify. They are still pulling the same crap. I am waiting for them to catch up before I try again. Phase 2, there is no phase 2 that I heard about, except from BoA. They used that same line. It is a diversion, to get you of track. Call back and tell them exactly what you want and to not take this crap. They got their money in the bailout to help us out. Now then need to do just that!
Also, I keep hearing about these investors, the ones that hold the mortgage as securities. If my mortage is backed by Fanny or Freddie, then aren’t they the investors? Another point, If I were to get forclosed on, wouldn’t the investor lose all of the investment anyway? Someone explain this to me, I really don’t get this investor thing.
No, I was NEVER late on my mortgage payments and still haven’t been. The way the home modification plan works (at least for Wells Fargo) is that they give you a 3 month trial period with your “new” payment amount. You make the new payment instead of the old payment. They put the payment into an account until they have enough to pay your old payment. Then they pay your old payment. In the mean time, your old payment is turned in as DELINQUENT. It’s crazy, but true. I fought with them over this because it will ding my credit. Even if the “new” payment is paid ON TIME, the way the plan works, your 3 trial payments will cause the 3 old payments to hit your credit as DELINQUENT. They spell it out very clearly in the paperwork. They say it is the only BAD part of the plan. So, we have worked really hard to pay every payment on time and we have excellent credit. So, by accepting the plan, we will be hurting our credit. It’s a bunch of crap. So, if you want the help – you have to hurt your credit to get it. If you’re not sure how it works with your mortgage company – just ask them OR read ALL of the paperwork. It’s in my paperwork.
Okay, so I called back & told them what the woman had said about the Phase 2, she had no idea what I was talking about but said that perhaps I was dealing with the wrong dept. She transferred me & I told the gentlemen that I want the modification “only”, he says I should fax in my pay stubs, hardship letter & tax return. They’ll review it & if I qualify they’ll send me in the paperwork to fill out. Does this sound right?
Hi Shannon,
We are in the same situation but I have been told by Wells Fargo that trial payments will only be reported as delinquent if you had missed payments prior to entering the trial period. According to Tina in the loss mitigation department if you are current on all of your trial payments they cannot report you as delinquent because you could show proof of paid statements to the credit reporting agency to dispute the claim. Of course Wells Fargo says they cannot send this to me in writing. Just curious have you checked your credit since making your first trial payment and if so has it changed?
Ty – I forget to mention. Wells Fargo didn’t mention anything about a refinance option. Our income also dropped significantly – so refinance wasn’t an option. However, the Home Modification essentially refinances your home, but with no fees.
Only Fannie Mae or Freddie Mac backed loans qualify for the refinance option. Wells Fargo loans currently just qualify for the modification program at this time.
Ty – That sounds more like what I had to do. In fact, they made me send the same paperwork 3 times. I turned my initial set of paperwork (paystubs and hardship letter) into Wells Fargo mid March. My first trial payment was due 8/10/09. This is how long it took for everything to go through. Also, I’m not even “Approved”, yet. It is still possible that I won’t be approved. They are doing 1 last review of my information – yes, I had to send it all AGAIN. I’m not sure why – maybe to see if things are changing (finances)? If everything is the same (and it is), then I should get permanently approved. However, they never once asked about savings or 401K until the end. So, I’m a little worried about that hurting me. We do have 401K. A lot of government programs disqualify you once they find out you have savings. They make you depleat it before helping you. So, I’m hoping that I don’t suddently get disqualified after having my credit dinked during the “Trial” period payments.
Wow! That seems like a pretty long process. Did you keep on calling them & they denied getting the faxes? Also, did you send last year’s tax return initially with expenses or only hardship & pay stubs.
Ty – They never denied receiving any of my papers. Just kept asking for another set – saying that they needed more recent copies. They said they were outdated. They were outdated because of how long it took them to get to my application. I sent payroll stubs, a hardship letter, and a list of my monthly expenses. I didn’t have to send my income tax papers until the very end. I had to send it with my first “Trial” payment. At that time, I also had to send another set of payroll stubs, a hardship letter, a list of monthly expenses, and a list off all assets. It was recently in the news how long it was taking to process these applications and the banks said that they were going to push the applications through much faster now – but, I doubt it. My bank was Wells Fargo and I think they’ve had the majority of the applications according to the news – so maybe that’s why it took so long.
Shanon, Thanks for sharing your experience. TY
In response to MHAM I read somewhere today that our 401K and other retirement program savings is not used to determine eligibility. I typed into aol search makinghomeaffordablerefinanceprogram
and have been reading makinghomeaffordable.gov.
I cannot locate the exact info to share, but you should be able to find it there. It does not tell about reporting existing loan as delinquent for the 3 months. Thanks for sharing this unfair practice which I will protest to the program designers. Perhaps it would work to continue to make that payment while in the first 3 months of the program if possible. Not that on my SSA disablity I get enough money to do so………however others might to save their credit.
It does say however, to call 888-995-hope for more information.
I’ll again for that info.
Deborah – I asked if I could pay the full original amount during the trial period to avoid the deliquent status and was told that I couldn’t do that. If any amount different then the trial amount is sent, it will be rejected and considered not paid. If you miss a trial period payment, you will not qualify for the modification. All of this is in my paperwork. I would be happy to type it word for word if anyone is interested. It really is unfair.
I began this process December 2008. I submitted and resubmitted and resubmitted; called and called; over 12 work orders, AND NOT ONE PHONE CALL OR LETTER OR RESPONSE OF ANY KIND!! I finally lost it. I called my lawyer, my legislator, and the CFO’s office of BOA. Finally at the beginning of AUGUST, I finally get a response, but I had to sick everyone I could on you people. Then a guy named AJ working my loan pre-qual’d me for the MHA plan, he told me I could not be foreclosed on, he told me I would see a DRASTIC REDUCTION IN MY LOAN – as much as 50%! My mortgage is 1210/month. The MHA plan I got today offered a payment reduction to….. wait for it… 1181.10. WOW THIRY BUCKS! SO MUCH MORE FREAKING AFFORDABLE!!!! ARE YOU KIDDING ME??????? Just take the frigging keys. And tell AJ that when my kids no longer have a home we are moving in with him. He gave us false information, false hope. You people need to know what you are talking about or find another job. I cannot believe the ridiculous crap I have gone through to get a 30 dollar reduction on my loan. THANK YOU OBAMA, THANK YOU FANNIE MAE, THANK YOU BOA AND AJ. My prayers have been answered – not. Won’t get my vote again. go back to Hawai. I hope that all the greedy B@$trds who issued these loans are enjoying their trips to the islands, vacations, ovens that actually work, windows that don’t leak, heating bills they can actually pay and the lovely 70 degrees their house must be in the winter. The housing market crashed, I lost my job, and now I lose everything.The American Dream, people. Alive and well. And Mr H. you insufferable toad, richer than god but whined over having to pay 75 bucks for a pool pass so I had to pay half of my pathetic commission just to get the other half on your lovely vacation to Vermont I hope you rot. And the next time you swear at me or one of your emplyees over the phone I will take it upon myself to make your life miserable. Must be nice to have made your fortune on the backs of the little people. Piss off.
Fedup, wow! What an experience… Please share more about your situation.. Did they lower it to 31% of your income..? How long did’nt you pay your mortgage?
I did everything that Shannon did (and I am with Wells Fargo) and I got my application DENIED today under the most ridiculous excuse that I “qualify for their making home affordable refinance program”, which would save me a whopping 80 bucks a month! The real irony here is that I would still be paying 50% or more of my monthly income, which was the whole qualifier for the MHA program, wasn’t it? It’s an endless loop with the banks, and I am seriously considering just walking away.
Fed Up…The collapse and bailouts were taking place during your “application.” I find it hard to believe that you applied for “Making Home Affordable” since the program started sometime in March.
In July 2007, we re-financed with Countrywide in order to get out of an ARM that was about to go up astronomically.
In order to get the loan through, the value of our home was appraised over what is was really worth. In addition, only my husband’s name was put on the loan since the credit cards are in my name.
The loan is an interest only arm that does not include taxes and insurance. The payment is $3407 and my husband takes home $1300 per week. I am a stay at home mom with 2 young children.
In September of 2008, we were struggling to pay our bills. The value of our home was plummeting. We weren’t behind yet, but were about to be. We pro-actively contacted Countrywide in October 2008 and asked for help.
Here is a time-line of events:
October 2008 – Sent Countrywide hardship letter. Husband withdraws $25K from his retirement fund to pay bills. This money must be repaid quarterly – $1000.
December 2008 – Countrywide refuses loan mod without a reason.
March 2009 – Obama plan underway. Contact Countrywide again. They say they can’t help because we make too much money. Because they added husband’s net income to his gross income and used that figure! Request that they re-open our case.
May 2009 – Told by Bank of America rep John McFarland that they will not help us since it is not their fault we are over-extended.
July 2009 – Contact Bank of America’s Barbara Desoer to request a loan mod. Cannot pay August mortgage payment. Faxed new hardship letter and required documents.
August 2009 – Assigned Bank of America Negotiator Melissa Henderson.
August 21, 2009 – BOA Melissa Henderson calls to inform me that our request is being denied. She informed that we meet all of the requirements under President Obama’s HAMP program, however, because my husband borrowed money from his retirement plan (which is depleted and we are still repaying), we do not qualify for a loan modification. She said that we are current on credit cards and car payments and therefore do not fall under the guidelines for assistance.
This is outright fraud. The HAMP stipulates that retirement accounts cannot be used to determine financial status and in addition, being behind on anything (credit cards, mortgage, etc.) is not a HAMP requirement.
Think I am only one person? Wrong, go out to http://www.loansafe.org and read the thousands of horror stories.
Hopewell Mom…Banks are disgusting. However, while watching the news I learned that when contacting a bank you must ask for the mitigation department, and insist, because they will give you the run-around. You must be forecful and insisting. If you don’t get anywhere, contact the government agency running the programs. As a matter of fact, they hold seminars where you bring your documents and they help you fill them out. And, I would also contact a news agency explaining your plight, and be sure to name the bank. The way I understand it, banks are trying to go back to “business as usual.” And they are being investigated. Don’t give up!
We have had an MHA loan modification in progress with B of A now for three months. Today, we called for an update and all records of our application have suddenly disappeared from their system! Three months of waiting, of being told of the status, on and on. Now all those notes are gone from our account and we have nothing. Nothing. It’s as if we never applied. Not only that, they will NOT let us start anew until we first apply for the MHA refinance, which we do not want and cannot afford.
This is unreal, how are they allowed to get away with this?!?!
Ann,
This is in my contract from Wells Fargo under “The Loan Trial Period” section, Item D…
“The Lender will hold the payments received during the Trial Period in a non-interest bearing account until they total an amount that is enough to pay my oldest deliquent monthly payment on my loan in full. If there is any remaining money after such payment is applied, such remaining funds will be held by the Lender and not posted to my account until they total an amount that is enough to pay the next oldest delinquent monthly payment in full.”
It is my understanding that the original payment that is due becomes deliquent during the “Trial Period” based on Item D. This is how the loss mitigation department explained it to me. Hopefully, the person that I talked to is wrong. We’ve never missed a payment, so I was very frustrated when he told me that my payments would be turned in as delinquent even if paid on time.
Also, my Wells Fargo loan is backed by Freddie or Fanny. So, you can have a Wells Fargo loan that is backed by them. We opted for the Modification based on our financial situation. In fact, Wells Fargo basically tells you what the best route is for you. They look at all of the programs and tell you which is best for you. Including in-house programs if they are better fitted for your situation.
I work for a bank and work primarily in government backed loans. Here’s how the whole thing works: With Obama’s Making Home Affordable plan we take 31% of gross income. We can drop the rate to as low as 2% and defer principle (but we cannot forgive principle). There is NO FEE for this program, and if your bank is charging you a fee, they are either being dishonest with you, or trying to sell you a refinance. The truth is, the MHA program works in theory, but only truly helps a small portion of homeowners. As far as your credit goes, if your modification payment is less than your house payment, they technically have to report you delinquent to the credit bureaus since you aren’t paying your full house payment during the trial period, You may be able to take this up with your credit bureau. If your loan is government backed and you qualify for MHA, that is unfortunately your only option, unless you decide to sell. If your loan is not government backed (Fannie Mac, Freddie Mac, FHA, VA, etc…) and you cannot afford the MHA, ask your lender about the other modification programs available. DO NOT hire a third party negotiator; I used to work for one of those, and they have no more negotiating power with the bank than you do, so you’re wasting a lot of money. And yes, the bank can and will pull your credit to qualify you for a modification. Credit score is not a factor, but they’re looking at debt to income ratio. If you have a lot of credit card debt they may refer you to credit counseling. As far as letting the property foreclose, the bank works with cash buyers and investors, so they’re really not worried about being able to sell your property after foreclosure. Trust me, using the line “but if you foreclose you get nothing” will not work with the bank, and may make them less likely to work with you. The bank is not interested in negotiating, only with minimizing their losses. They would prefer to modify, but if you are difficult to work with, or do not keep up with your modification payments, they would rather foreclose on your property. Hope that clears up some of the myths about the lending industry! The best thing to remember when dealing with your bank, be easy to work with, send them every document they request on time, and follow up with them! Don’t trust that they’ll do what they say, make sure you are calling them to find out exactly what’s going on with your mortgage!
Kate,
so in your experience have you seen anyone finish the trial 3 months and have their payment drop for ex mine is 1500 a mth and mike at wells fargo said it will drop to 725 a mth it doesnt even make sense how is that possible???? pls help
We have a mortgage that is backed by Fannie Mae with Wells Fargo that was purchased in late December 2007. We are currently working with our PMI representative, trying to “modify” our mortgage with Wells Fargo. I have repeated the fact that in our small (25) home community, on a dead end street, 7 homes have either been “short sold” or foreclosed with market depreciation value of about 33%. Having friends that had an ARM that matures in December 2009,they were able to re-finance with another lender that requested a “debt forgiveness” of $82,000.00 from the hedgefund that bought their mortgage on the secondary market because of the depreciated market value of their home and it was GRANTED. Another that had an ARM on a $750,000.00 mortgage with a depreciated home value of $500,000.00 to re-finance in a “step-up” rate beginning at 2.5% for 5 years and titrating up to 5.8%, extending her loan for a 35 year term. I understand that there is a “Phrase II” of the “HAMP” program and it deals with over-inflated mortgages on depreciated home values and it is suppose to be made available in the next 2-3 weeks. I inquired with my PMI rep and she cannot confirm this but says if it does happen “we will be able to avail of that even though we are in “modification” processing now. Does anyone know about “PHRASE II” and how it will affect “upside down” mortgages? Why was it left up to the lenders to determine how to modify mortgages instead of following guidelines across the board for everyone? It seems that some lenders are doing everything possible to help distressed homeowners while others, are trying to make sure they don’t lose any profits that were calculated on the original mortgage by not taking into consideration of the market values on the home mortgages that they are now “modifying”.
CLARIFICATION:
I spoke personally with the individual with the $750,000.00 home with a new market value close to $500,000.00…She is with Wycovia (Wells Fargo the parent company of) and she had an ARM that was due to mature in 3.5 years at the time she was able to “modify” yes, modify since she could not refinance her mortgage since she had no equity in her new home. She was never late on payments, had essentially lost her job (housing industry), and had been with Wycovia on several home loans prior to the last. She dealt directly with the bank and although it took about 4 months and is now about to make her last “trial payment”, was able to cut her mortgage from $4000.00 to $2000.00 (this includes taxes and interest) for the first 2 years! Interest rate dropped to 1.5% for first 2 years, 2.5% for the 3rd year, 4.5% for the 4th year and 5.5% for the 5th year and thru the duration of her loan which was extended to a total of 34 years.
IT IS TOTALLY UP TO THE BANKS AND TO THEIR DISCRETION AS TO HOW THEY WILL HANDLE EACH LOAN. They are suppose to look at all the different options and determine which plan/options will work best for you.
If you have an excellent payment history and you have been with the bank for an extended period of time….maybe, going directly to the bank might be a better option…
I have told repeatedly by my PMI representative that banks ARE NOT USING THE OPTION OF “DEBT FORGIVENESS” AT THIS TIME. Unless, you are fortunate enough to have had your mortgage bought on the secondary market by some hedge fund and that hedge fund is willing to do a “debt forgiveness” on your mortgage in order for you to refinance (friends with an ARM did do this)..we are at the systems mercy.
Just thought I should clarify the information that my husband gave me with more accurate facts after speaking personally with the friend. Don’t know if this helps anyone but felt the need to be as accurate as possible. Darla
I would like to add a comment with regards to the documents that were required by Wells Fargo..I was asked to submit most recent 2 weeks pay stubs, signed copy of 2008 tax return, list of monthly expenses, and a hardship letter describing our circumstances and reasons we should be considered for the “HAMP” PROGRAM. EACH DOCUMENT PAGE NEEDS TO BE SIGNED, DATED, AND LOAN # WRITTEN UPON IT. YOUR TAX RETURN NEEDS TO BE SIGNED EVEN IF YOU E-FILE. And include the completed “HAMP” PACKET(each page signed, dated and loan number inscribed). After submitting this information, I was contacted by my PMI rep.(United Guaranty), the following week. She informed me up front that there was no charge or cost involved for her to help us…being that this is part of the service that is included with our PMI insurance. She has been a wonderful source for making sure all the documents that Wells Fargo would need..they had and has made sure our application was given directly to the “Loss Mitigation” dept. She has since been keeping us informed on our application process and has answered many questions for us. My suggestion would be to get your PMI rep. involved with your application process as early on as possible especially since this is a service you are already paying for with your PMI.
Hi Darla What is the PMI rep dumb question but i have never been late on my payment this is all new to me thanks I am with wells fargo as well and the rep.Mike seemed to be bother when i asked questions Just out of curiosity I asked if my credit would be damaged by any of this and he said yes i dont feel to confident this program will help
Hi MAR,
The PMI is Private Mortgage Insurance. When purchasing a home and if it is a “Fannie Mae or Freddie Mac” backed loan and you do not have the 20% down payment…the lender will require you to carry the PMI insurance to insure that your loan will be protected against losses such as bankruptcy, foreclosure, abandonment, etc. If you are a distressed homeowner and you have PMI insurance on your mortgage…contact the PMI insurance provider and ask if they have a “Loss Mitigation” department. If they do, speak with the representative that is responsible for your loan insurance. If they do not have a “loss mitigation” department, inform them of your situation and they should direct you as to whom you should contact. The PMI insurer does not want you to fail with your mortgage… otherwise, they will be paying out of their pockets for your deficiencies whether it is foreclosed or short sold. This is what has been explained to me. I hope that this helps. I also made a comment about this to “Stephanie” on 9-30-2009. Again, I hope this helps you. Good luck, Darla
I have a mortgage with Litton Loan Servicing. About 1 1/2 years ago I was having some difficulty paying all my bills. So I called all my creditors and to my surprise they all had options to help me, including my mortgage company, Litton. I never told Litton that I could not pay their bill. I was just looking to see who could help. They encouraged me to apply for a HAMP modification. After several months I got accepted into the trial modification period. I asked them what that was. They said it was the final step that takes no more than 4 months, just make your payments on time and you will be fine. I thought all was well. I made on-time payments. I stayed in touch like they asked. After 7 months of timely payments I called them as I often did to check in. Finally, after 7 months, they said I was denied for some unexplainable reason and owed them $3000 and that my home was in default!
What kind of help is this?
I could have paid my full mortgage and not ended up in this debt. I do not understand how this is considered help. I have been paying hundreds each month in credit card bills. Meanwhile, my mortgage company is reporting me delinquent. I was worried about my credit when I should have been worried about my house. I could have easily paid my full mortgage. I cant live in a little plastic credit card. Who came up with this plan to help people?
I have spoken to dozens of people, mostly couselors and loss mitigation reps, some nice, some not. None of them suggested that I consider saving my house and not my credit cards! I don’t know who to trust anymore.
The best part… The loss mitigation side of Litton is promising to resolve the mistakes and get me a modification BUT the original mortgage department side of Litton has been pursuing foreclosure and has now told me that my loan is being sold to Green Tree Servicing on January 1st. Green Tree is the company that’s being sued for killing someone with harrassing phone calls. I don’t expect they will work with me and make it all better.
To the person who says they’re middle class earning $200,000 a year, say what? Middle class jobs in Wisconsin pay $11.00 an hour, if you’re lucky. We had $40,000 of equity in our home because we paid off our land. My husband’s surgery was basically not covered worth crap by our emergency insurance. This combined with my job loss, resulted in a large loan (2nd mortgage). So refinancing will not help us and we are I guess, in your eyes, lower class. If middle class is $200,000 a year, we should be on relief. Sorry, but I do not feel sorry for anyone complaining that they cannot refinance making $200,000 a year. Get real!
Anne – It may be hard to believe but yes, in many parts of the world $200k a year is middle class – like NYC…You have to take cost of living into account.
Just curious, has ANYONE finished the 3 month trial period and been given a new final mortgage payment? We’ve been working on this since March. We just paid our last trial period payment and STILL haven’t heard whether we will qualify. What’s left after the 3 month trial period payments? More paystub and paperwork? Or, do they use all of the paperwork that you sent in when you agreed to the trial period? I’m just getting frustrated with the program. People in need can’t wait nearly a year for help. My understanding is that they can still decline us even if we complete the trial period. So, then we would be behind on our loan and we’ve never been in that situation before.
I am also doing the trial payments – I still have a month to go. i am very curious to know what will happen after the 3 months are up. please update when you find out. also, my credit was immaculate before this. now my credit score has drop by over 100 pts. however, when I called citimortgage they said they will notify equifax. I checked my account with equifax and it now states”
Account Status Changed from Contact member for status to Pays account as agreed” But heres the deal, In August my score drop from 780 to 650, but during that month it rose again to 782. Now after I paid September’s trial payment – it drop again from 782 to 650. I’m waiting to see if it will go up again.
I’m with USBank. They sent papers dropping my payment $400 a month. No terms were included and nothing was explained about credit dings or what the government would do to help me out. Lots of forms to send back in with 1st trial payment. I’m supposed to sign all this in faith and wait for 3 months to find out what my terms will be finally. After hours of waiting on hold and many disconnects and rerouting I found out the interest rate would be dropped to 2.625 and 350 months but my principle payoff would increase 5000. Term months are same as now. They didn’t know anything about anybody adding to my account even when I sent website for guidelines. 5000 is deferred principle. “Somebody has to pay it” but I thought this was the stimulus plan job. Won’t tell how it will affect my credit. My questiion-Why add 5000 to payoff. I still owe the same principle as before so my payoff should just not be as high as original mortgage plan. More money goes to interest up front and more to principle at the end. I was approved for modification but don’t want anything added to end of loan. They swear it is not a refinance. Sounds like to me the 5000 from the obama plan over 5 years just cancels out the 5000 tacked on the principle and nothing changes except my credit ding and they get money but I do get lower interest years 1-29. My final interest rate would be 1% less than it is now. Anybody else told about tacking on 5000? etc…