OK, I'll go first, but it's old news, and it was commercial. It was a local bank, so not relevant to almost everyone, just more of a sign of the times. link to red thread. Summary: never a late payment, 20% LTV, 7.5% APR due to reset for final 5 yrs of 15 yr note in 8 mos It was looking to reset around 5%. Told loan officer I was going to go for 4.75% with another bank. She reset at 5% with no docs, no fees, over the phone.
First, thanks OP, fantastic idea for a thread. Expect it will help us to navigate our current negotiations with the lender (Chase) much better than on our own.
Second, a suggestion out of the gate for people. When negotiating with the lender, don't forget about someone BESIDES the lender who has a vested interest in you being able to make your payments: your PMI company (private mortgage insurance) My PMI company (Genworth) has a homeowner assistance team and they will negotiate with the lender on behalf of the borrower to get better terms, etc. I'm thinking they are going to battle pretty hard for manageable terms for me since they are on the hook if I can't pay. I posted their number and website in the Wiki.
areaman
Member
posted: Oct. 24, 2008 @ 9:57a
In light of National City being bought out, will that include National City Mortgage? Sorry if it is a stupid question; I know some of the corps have different divisions and they are not always part of the same entity. Our mortgage is with NCM and I am curious what will happen to it and if we can get a lower 30 yr rate than our current 6.25%?
CALABASAS, CA - Bank of America today announced the creation of a proactive home retention program that will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 Countrywide Financial Corporation customers nationwide.
The program was developed together with state Attorneys General and is designed to achieve affordable and sustainable mortgage payments for borrowers who financed their homes with subprime loans or pay option adjustable rate mortgages serviced by Countrywide and originated prior to December 31, 2007. Bank of America acquired Countrywide July 1, 2008.
"We are confident that together with the Attorneys General we have developed a comprehensive program that provides more solutions than ever before to assist troubled borrowers and put them back on the path to sustained home ownership," said Barbara Desoer, president, Bank of America Mortgage, Home Equity and Insurance Services. "Since acquiring Countrywide in July, we have committed significant resources and developed innovative programs to help as many Countrywide customers as possible stay in their homes."
Countrywide mortgage servicing personnel will be equipped to serve eligible borrowers with new program elements by December 1, 2008 and will then begin proactive outreach to eligible customers. Foreclosure sales will not be initiated or advanced for borrowers likely to qualify until Countrywide has made an affirmative decision on the borrower's eligibility....continued
coolambo
Senior Member - 1K
posted: Oct. 24, 2008 @ 11:34a
I've tried doing this with Countrywide about a month or so ago. I am really hoping things change so next time I call them, they'll tell me they'd be happy to do this modification for me. I am in the OPs category of "responsible, current borrowers". We've seen all this bailout for those who have been irresponsible. Here's hoping that something gets done to us who are responsible and doing our best to be current on our payments.
52club
Ancient Member
posted: Oct. 24, 2008 @ 1:00p
This is really the best solution for all that have a vested interest in the home loans not defaulting, which is pretty much everyone. I hope we hear some sucessful stories on this thread. I also hope comments stay positive since even for responsible individuals it is better to have neighbors with a modified loan than a neighbors whose house went into foreclosure.
I suppose to play devil's advocate some might say it is better for everyone to cut their loses instead of prolonging this "crises".
drodge said: Wouldn't any changes also be taxable?Unless there is an exception on the federal level, a reduction in principle would be considered cancellation of a debt and taxable as income. No idea how that concept applies to an interest rate reduction, or whether a principle reduction would be considered current income or would be prorated over the term of the loan. But it does raise an interesting issue, especially if you do not have the money to pay the resultant tax liability.
rasher
Senior Member
posted: Oct. 24, 2008 @ 2:35p
I have a Countrywide 5/1 ARM that is set to adjust in June '09. I hope we can get somewhere with this thread. Who has called? Who has tried what? Anything work yet? I'd just love to get some "bailout" benefit coming my way. Take advantage of what you can, that's the FW way, right?
fewchaboy said: LoanWorkout.org has a lot of useful information.
Try there first for feedback.
Did you bother reading that site info under "Loan Modification Tips"? Unless your broker or lender committed some fraud(ie chances are you got some sub-prime mortgage which reset at 500-600 over Libor) or you are delinquent, upside down in your house, don't have the ability to pay and can prove some kind of financial hardship which impairs your future ability to make your mortgage payment then most lenders won't re-negotiate the terms of your mortgage.
Now while I understand some people will fall into one of the 2 above categories most people will not unless some lenders are truly stupid when it comes to verifying people assets and future ability to pay. I do not think any lender is going to reduce your principle balance or interest rate if you can afford to continue to pay your mortgage based on the contract you signed.
Loan Modifications I have a felling are only going to benefit people who got screwed by their bank or broker into taking one of those teaser rate mortgages with the promise of "Don't Worry we will just keep refinancing you each time your mortgage adjusts so you will never have to pay libor +500-800 bps on your mortgage". But hell if you managed to get your mortgage company to do a loan modification even tho you have the ability to pay your mortgage please let us know and with what bank as I do not think anyone is going to delinquent on there mortgage on purpose just to try to get a loan modification.
Dolmar - Loan mods have been offered to CURRENT borrowers for many years.
Here is an old thread on lenders offering loan mods. Even I obtained loan mods without being delinquent. In that environment , the goal in offering loan mods was to keep clients, not loss mitigation, rather than losing them via refi to lower rates.
SUCKISSTAPLES said: Dolmar - Loan mods have been offered to CURRENT borrowers for many years.
Here is an old thread on lenders offering loan mods. Even I obtained loan mods without being delinquent. In that environment , the goal in offering loan mods was to keep clients, not loss mitigation, rather than losing them via refi to lower rates.
In that thread no one stated they were able to get a loan modification. The site fewchaboy linked is for a site selling their services in helping you get a loan modification. For $2k they claim they will help you get a loan modification as their "Legal Team" will review your loan docs for fraud and send a letter to your mortgage servicer if fraud is found and if no fraud is found and you meet their guidelines they posted they claim they will be successful in modifying your loan.
I have obtained a loan modification on non recourse commercial property back in 1995 as the property was upside down and had negative cash flow for 3 years based on rents in that area the building was located collapsed. It is one thing to get a loan modification on a property owned by LLC where you have no personal responsibility and bank can not go after anyone else and only the income from the property can be considered vs your personal house when you can show plenty of income to pay your mortgages and if you default they could always come after you for the deficiency if they choose to do so. Now if you managed to get a loan modification in the 2nd scenario then you are a very lucky as never been able to get a loan modification on a profitable property even after letting the bank know I am refi that property with another bank. They did not even try to save the loan or compete with the other banks offer. I have a very good relationship with the bank I was refi the loan away from.
I did obtain mods from 1st Nationwide without being delinquent, on properties that were appreciating with low LTV. Their goal at that time was to avoid losing good loans to refi out to another lender.
In the current envrionment, I predict we will see new modification departments setup to help borrowers without requiring proof of hardship. We arent quite there yet, but I will develop this thread with the latest updates so even responsible, current FW mortgageholders can benefit.
dolmar said: The site fewchaboy linked is for selling selling their services in helping you get a loan modification. For $2k they claim they will help you get a loan modification as their "Legal Team" will review your loan docs for fraud and send a letter to your mortgage servicer if fraud is found and if no fraud is found and you meet their guidelines they posted they claim they will be successful in modifying your loan. .
I agree with you here. Ive checked out that loanworkout/loansafe site (very scammy). They do have a free forum, but the real purpose seems to encourage frustrated readers to hire them or use their attorneys. And almost all the forum participants are the "dont blame us we bought too much house crowd" - its more like creditnet than FWF.
tester99
Member
posted: Oct. 24, 2008 @ 6:19p
Only retail lenders are getting in the act of H4H as of now. Wholesale lenders are not touching these.
Has anyone tried or considered trying offering something additional to your lender in return for a lower interest rate? I would consider moving my investment accounts/IRAs to Bank of America in return for some kind of reduction, currently 5.75% fixed, about 75% LTV, and current with payments. With people pulling so much money out of these banks, maybe they would be interested in additional deposits.
SUCKISSTAPLES said: I predict we will see new modification departments setup to help borrowers without requiring proof of hardship. We arent quite there yet, but I will develop this thread with the latest updates so even responsible, current FW mortgageholders can benefit.It's starting. They're desperate, and they have money. They're beginning with both edges now (extremely low-risk and high-risk). In my small town, bank VP's are cold-calling asking for lunch dates ISO good refi's. How far into the middle they go remains to be seen, but it's happening like never before in my lifetime.
Rorer714
Senior Member
posted: Oct. 25, 2008 @ 4:57a
SUCKISSTAPLES said: And a few rare cases have included PRINCIPLE reductions.I think this is an extremely important part for new home buyers. When they get a loan they know they can’t pay back they come here and get information on not paying it all back. Is this the FW way? Maybe somewhere in the title put “ATTENTION DEADBEATS”.
We need to find someone who works at one of these banks and find out what the specific criteria are. I would guess they have a formula based on credit score, payment history, estimated LTV, debt to income ratio, etc. If we knew the criteria, we could take steps to meet the criteria (i.e. make one late payment, get total monthly debt payments to a certain level, etc.)
I wonder how bad $400K of credit card debt might scare my lender into lowering my rate.
We need to find someone who works at one of these banks and find out what the specific criteria are.
YES! Employee/insider input and leaked info is welcomed! Anyone who doesnt wish to post the info using their SN can feel free to PM me and I will update this thread.
Problem with loan modification is usually somebody has to eat the loss at the other end. It's either the bank or the hedge funds that bought this loan as part of a bucket. Unless that party accepts the loss, your loan modification success rate is very low.
I believe in certain areas we will see a lot of pricipal reductions. Areas like Phoenix, Las Vegas, etc where modest homes have lost 1/3-1/2 th value. A co-worker (who can easily afford his house) has a 400K house (3 years old) where other houses are falling into foreclosure and have ruined the value of his home (appraised at 190K). His loan company is actively seeking a loan modification for him.
At some point banks will realize that they will have to forgive principal in order to stop the problem. In AZ as a non-recourse state those that can't afford their mortgage or can't get a rate modification get foreclosed and the whole neighborhood goes down. Soon people who can afford thier home realize its not worth paying for properly thats worth tons less than they owe.
Don't call me a deadbeat but if my property is worth half what I paid for it, it becomes a business decision to leave. Banks have to stop this and the only way is a principal modification otherwise the cycle will continue and home values will keep going down.
alchemist said: In AZ as a non-recourse state those that can't afford their mortgage or can't get a rate modification get foreclosed and the whole neighborhood goes down. Soon people who can afford thier home realize its not worth paying for properly thats worth tons less than they owe.
You might want to check your facts. AZ is a non-recourse state only on new purchase mortgages. For refinances tho AZ like many other states is a full recourse state. And most people used their home like ATM and refinanced their homes durning the housing boom. Also HELOC are always recourse loan. The fact that many lenders have not sued people for deficiencies is fortunate for home owners but durning the S&L crisis they did but the difference I have a felling was that most S&L portfolio their loans so they personally felt the pain vs now most loans are repackage and sold in MBS so the banks have no skin in the game.
You haven't thought about the other side of the trade. Who takes the loss for the reduction in principal? The lender or MBS buyers or hedge funds? If the loss is passed on to MBS buyers, there won't be any MBS buyers anymore. Nobody wants to invest where your investment is lost/reduced due to government regulations. The only solution is for foreclosures to Quicken and prices reach an affordable level.
I think banks won't agree to the loan modifications unless they take a chunk of the profits when the home is sold in the future.
alchemist said: I believe in certain areas we will see a lot of pricipal reductions. Areas like Phoenix, Las Vegas, etc where modest homes have lost 1/3-1/2 th value. A co-worker (who can easily afford his house) has a 400K house (3 years old) where other houses are falling into foreclosure and have ruined the value of his home (appraised at 190K). His loan company is actively seeking a loan modification for him.
At some point banks will realize that they will have to forgive principal in order to stop the problem. In AZ as a non-recourse state those that can't afford their mortgage or can't get a rate modification get foreclosed and the whole neighborhood goes down. Soon people who can afford thier home realize its not worth paying for properly thats worth tons less than they owe.
Don't call me a deadbeat but if my property is worth half what I paid for it, it becomes a business decision to leave. Banks have to stop this and the only way is a principal modification otherwise the cycle will continue and home values will keep going down.
My facts are correct, AZ is a non-recourse state, I'm not talking about refis, etc. I'm talking about the average Joe who bought a house they could afford and saw everything fall apart because of the creative financing that was going on in the areas inflating the value of the homes....remember the banks appraised the houses and have some responsibility here.
Anyway I'm just reporting that some lenders in this area are reducing principal to avoid people who can afford their home from walking away furthering the cycle.
alchemist said: My facts are correct, AZ is a non-recourse state, I'm not talking about refis, etc.
The only people who bought homes and did not refi were people who bought in 2006-2007. Most people who bought homes pre 2005 more than likely refi their homes because rates fell and if they were paying PMI or had impounds they were able to removes those as well. Of coarse I know a couple of idiots personally who bought their homes pre 2000 and have fixed rate mortgages between 6.5-8% who refused to refi back in 2003-2007(pre june) when rates dropped down to the low to mid 5's. As those idiots could not understand even tho their mortgage would be extended to 30 years again because they were paying much less interest over the life of the loan they would save a lot more than the added years of payments or that the interest rate savings covered the closing costs for the new mortgage.
These same people even till today refuse to refi there mortgages down to low 6's. So I guess there are some people who never refi their homes but most people did refi. Most people also have Heloc so while the first mortgage issuer might not be able to to sue you and the 2nd holder sure can.
Rorer714
Senior Member
posted: Oct. 25, 2008 @ 2:33p
alchemist said: I'm talking about the average Joe who bought a house they could affordI think you might want to take Math 101 over. The price of your home has nothing to do with your ability to pay off your mortgage. As you put it, if the average Joe could afford the house (afford his payments) it would not matter if the house was worthless, he should still be able to make his payments. If he walks away from it, yes he is a DEADBEAT!!!
tester99
Member
posted: Oct. 25, 2008 @ 3:34p
Deadbeat stuff aside, the post is to find out how to make a buisness decision given the current climate. Yes even those that do everything right are sensing they really should be walking away or reducing their outlays. No one likes to miss a bailout. You reduce principal and people with money start spending it on more property.
It's strictly buisness Sonny.
The only retail outfit that has started these H4H this past week is Wells.
Rorer714 said: alchemist said: I'm talking about the average Joe who bought a house they could affordI think you might want to take Math 101 over. The price of your home has nothing to do with your ability to pay off your mortgage. As you put it, if the average Joe could afford the house (afford his payments) it would not matter if the house was worthless, he should still be able to make his payments. If he walks away from it, yes he is a DEADBEAT!!!
I don't agree. Average Joe is able to afford only with an assumption that he is developing some equity (if not for appraised value at least to the amount he pays in principle ). If the equity is not developing then the affordability equation changes.
Yes i strongly believe that lender has his hand in the house and they should get a pie of the losses.
tester99 said: Deadbeat stuff aside, the post is to find out how to make a buisness decision given the current climate. Yes even those that do everything right are sensing they really should be walking away or reducing their outlays. No one likes to miss a bailout. You reduce principal and people with money start spending it on more property.
It's strictly buisness Sonny.
The only retail outfit that has started these H4H this past week is Wells. If they were doing everything right, then they wouldn't walk away.
It is legal robbery. Not much different than robbing a bank. Reducing your rate's isn't, but reducing your principal might be. Lets say that someone borrowed $100 from you. They then tell you they can either pay you $50 if you forget the debt or they wont pay you back anything at all. Did you just get ripped off $50? It is wrong and immoral. It is theft.
That being said, there are people who have no choice. Circumstances happened where there is no way they can make their payments. The banks took a risk and assumed you were going to be able to make your payments. The lesser of two evils is to settle your debt rather than walking away. In those circumstances, debt settlement is the right thing to do.
Havello said: I get sick of getting my hopes up about principal modification of my home just for Washington to turn around and tell us that is not part of the home relief act. I was doing all the right things when I purchased my home in Florida back in 2006. I put 20% down ($50,000) which was my life savings. I took a loan with reasonably low interest of 6.5%, but with interest only for 10 year term with monthly payments of $1,550. I am keeping my payments current, but I am into a lot of credit card debt, and this continues to get worse since I can only pay a little more than the minimum payments on them.
My situation would worsen in 7 more years when my mortgage note would go to include payments of principal. The loan payments will go up to $2000, and that I honestly can not afford. When I bought the house in 2006, the idea was to refinance or sell the house in about 5 years expecting the house to improve in market value. But it went the other way, and now I am over 150% under value or negative equity. (Balance on my loan is $215,000, but house's M.V. is around $125,000). I did not speculate. I bought the lowest price houses in the market at the time. Problem is that Florida, same as Nevada and California, had a unique situations in which house prices have plummeted. This is not my fault. I am a victim of circumstances, but I'd like to do something to get myself out of this situation w/o having to default on my loan. I believe the BK cramdown option is currently being discussed to be added to the relief program. If it passes, you would have to file Ch13 and a BK judge could reduce principal to MV. Stay tuned, there should be more info in the coming weeks
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