Tag Archives: loan modification

A Different Kind of Help

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Like all good housing counselors, my colleagues and I are trained to consider a range of options for homeowners who seek our help. But, every once in a while, we work with a client who needs us to think of solutions that don’t appear in the training guides. I had one such case recently, and we are going to call him Charlie.

In January of this year Charlie came to our office seeking help with his mortgage. In 2013 Charlie’s wife passed away. As a result, his household income fell by almost half, and his mortgage payment of $1,400 per month was more than two-thirds of his remaining income. Despite his best efforts, Charlie had fallen a few months behind on his mortgage payment and he was concerned that his lender might foreclose.

After we met and considered a number of possibilities, Charlie decided that he would like to try to get his mortgage modified to an affordable payment and, at the same time, to put his house on the market so he could move to Florida.

After a month or so, Charlie’s bank offered him a modification. Unfortunately, the modified payment was only about $200 lower than the original payment. So, while Charlie would be current on his payments, his home was not sustainably affordable. Charlie was concerned that he was going to have to accept the first offer on his house – even if it was lower than the house is really worth – in order to move on with his life. That’s when we decided to see if there was something else we could do to make Charlie’s payments more affordable.

I called the tax collector in Charlie’s home town and asked her whether the town offered a discount on property taxes for senior citizens. In fact, they do. Although the application process seemed daunting to Charlie, with a little encouragement from me, he agreed to at least try.

The first application Charlie made to the town was incomplete, but with some more coaching on my part he submitted a completed application on the second try. Then we heard nothing about the application for a few weeks. So I started making weekly calls to the town’s tax clerk.

In the end, we got a great result: Charlie’s annual tax bill was cut from almost $7,000 to $1800, which, together with the loan modification, lowered his monthly payment from the original $1400 to around $780, which he can now afford.

Charlie is now able to hold out for what he thinks is a fair price for his home, and he can devote the time and energy he had been using to worry about his mortgage payments to planning the next chapter of his life.

There are obviously limits – imposed by time and other resources – that prevent housing counselors from being able to help with all of the situations our clients might face. But it is refreshing and encouraging when a little bit of extra effort can deliver a big improvement.

Pursuing a loan mod? Let us help you with that.

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Perhaps you’ve heard that the federal government has imposed new regulations on Servicers (entities who collect mortgage payments on behalf of investors) with the intent of improving the loan modification process.

The Consumer Financial Protection Bureau (CFPB) imposed regulations on large Servicers effective January 10, 2014. Below is a partial list of timeline regulations imposed that should get you an answer to your loan modification, short sale, or deed-in-lieu request in 30-45 days.

• If a loss mitigation package is submitted to your Servicer 45 days before a foreclosure auction date you will be protected by the CFPB regulations.
• If the package is submitted 45 days before the sale date, the Servicer must provide you a missing items list by mail. If submitted 37 days prior to the sale date, you must contact them to find out what items, if any, are missing.
• After a file is considered complete, it should be submitted to underwriting and be decided in 30 days. Failure to do that is in violation with CFPB regulations.
• Foreclosure proceedings cannot begin until a borrower is more than 120 days late.

Did you know that the number one reason for denial on a loan modification request is “incomplete package?” How do you know if you’re sending the right documents? I know many people who keep sending documents by fax, email and mail to their Servicers and still don’t get positive results. Why? Let us help you.

Through NeighborWorks® Southern New Hampshire, a HUD approved housing counseling agency, HOMEteam’s certified foreclosure prevention experts are prepared to help you FREE OF CHARGE.

If you’ve been trying to get a loan modification and are getting the “run around,” please attend one of our information sessions. We’d love to help.

Good News in the Morning

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Oh what a beautiful morning!  First call of the day started on a happy note.  A former client, who had her first mortgage permanently modified on the Treasury’s “Making Home Affordable Modification Program” (also called “HAMP”) back in November, called to say her second mortgage was just modified on the Second Lien Modification (2MP) program.  What that means is her interest rate on the second mortgage dropped to 1% for five years, and it then changes to market rate for the remaining term.  These terms mirror those on her first loan modification, reducing her monthly payment by 80%. WOW!!!  I am so happy this family now has an affordable payment.  She said, “I feel like we can live again!”