by Moe Bedard | Apr 10, 2022 | Mortgage News from LoanSafe.org |
Elon Musk is a well-known entrepreneur and billionaire who is best known for his roles in Tesla and SpaceX.
He has plenty of money, but recently he took out several very large mortgages on five properties in California.
When he borrowed this money, Musk faced some big decisions about which type of loans to go with. There are two options: fixed-rate mortgages or adjustable mortgages.
Fixed-rate mortgages provide the borrower with a guarantee of stable monthly payments.
Adjustable mortgages don’t offer that same benefit, but they do come with substantially lower rates.
Musk chose to take a big risk with his mortgage loans.
Instead of choosing a 30-year fixed-rate mortgage – which would have given him stable monthly payments – Musk chose a hybrid-adjustable loan (ARM).
The Tesla CEO, 49, took out several mortgages worth more than $61 million to buy five adjacent homes in the posh Bel-Air neighborhood of Los Angeles where celebrities like Jennifer Aniston and Kim Kardashian live, according to property records reviewed by Business Insider.
He bought two of the houses – which are located near one another in Bel Air – in 2012 and 2013 for $17 million and $6.75 million, respectively.
Musk bought one of the houses from actor Gene Wilder for $6.75 million, and another from actress Talia Shire for $6.4 million. The other three are located in the Hidden Hills neighborhood of Los Angeles and cost him $24 million combined.
For his new mortgages, Musk secured a floating rate loan with a 3% interest rate for the first six months, which will then increase to 4.5%, according to property records filed with the county recorder’s offices for Los Angeles County, San Mateo County and Alameda County in California.
The loans total $24.6 million from Citibank and $36.3 million from Morgan Stanley.
Musk was able to borrow a high-risk mortgage because he’s a billionaire.
With his wealth, he could afford to take a chance with an ARM mortgage and see his rates go up and payments rise if and when that would happen.
Musk was unlikely to find himself in a position where he couldn’t refinance his loan if needed, especially given his personal wealth and long-established borrowing relationships with major banks.
The typical borrower, however, might not be so equipped to bear the risk of an adjustable-rate mortgage.
The average person would likely find themselves in serious financial hardship if their rates rose — and there’s a good chance they will continue to do so in the forseable future.
by Moe Bedard | Apr 7, 2022
FHA Loan Qualifications: Learn the guidelines to qualify in 2022 By Erik Sandstrom – To find out the qualifications, guidelines and requirements to apply for a Federal Housing Administration (FHA) loan in 2022, read the guidelines below. This will help you learn...
by Moe Bedard | Apr 7, 2022 | Mortgage News from LoanSafe.org |
Rising mortgage rates on FHA loans are driving up monthly payments, making it harder for many to afford.
FHA loans have long been touted as one of the most effective ways for first-time homebuyers to get a mortgage. But with rising interest rates — and a lingering threat of more — FHA borrowers are about to face more pain.
For home buyers, the difference between qualifying for a 3.5% down FHA loan and a 5% conventional loan is significant: about $150 per month on a median-priced home in the U.S., according to one analysis from mortgage data provider CoreLogic.
For people who already have a FHA loan, borrowers will likely see their monthly payments increase due to higher interest rates, which could hurt their financial situation if they don’t have other income streams coming in or an emergency fund set aside in case they lose their job.
If you purchased your home a few years ago, or even just last year when rates were at historic lows, you might be surprised to learn how much higher the rate is today.
The average 30-year rate on FHA-backed loans has risen from 3.97 percent in January to 4.68 percent as of this writing, according to data provided by Ellie Mae, an industry software provider.
That’s a rise of 0.71 percentage points in just six months, and it translates into higher payments for all new FHA borrowers:
$1,429 monthly on a $200,000 loan — an increase of $160 monthly or $1,920 annually
$2,073 monthly on a $300,000 loan — an increase of $239 monthly or $2,868 annually
$2,888 monthly on a $400,000 loan — an increase of $328 monthly or $3,936 annually
Each 1-percentage-point increase in mortgage rates is equivalent to a 10 percent drop in home affordability, according to Trulia.
“FHA buyers are going to get squeezed,” said Jed Kolko, chief economist at Trulia. “They’re going to have higher house payments.”
The rate spike isn’t the only problem facing borrowers with FHA loans right now. Insurance premiums are also expected to rise in coming years — and those increases will hit people who took out their mortgages before the hikes were announced.
The average interest rate on 30-year fixed-rate mortgages increased from 4.20% in March to 4.37% in April, according to mortgage finance agency Freddie Mac (FMCC).
Meanwhile, the average rate on 15-year fixed-rate mortgages rose from 3.43% in March to 3.57% in April.
Just a few months earlier, rates were hovering around 3.5 percent. Homeowners with ARMs are also feeling the pain of higher rates, though the impact will be somewhat less immediate.
The reason for the increase is simple: The Federal Reserve has been raising short-term interest rates as the economy improves and unemployment levels drop.
It’s also winding down its monthly bond purchases that have kept mortgage rates at historic lows.
by Moe Bedard | Apr 4, 2022 | Mortgage News from LoanSafe.org |
A new Redfin report says the rush to purchase second homes dropped in February to its lowest level since May 2020. Though demand is still up 35% above pre-pandemic levels, the vacation housing market will cool as rates rise.
The Redfin report shows that vacation home purchases dropped 38% year-over-year in February after falling 34% in January and 27% in December. The drop comes as the cost of borrowing rose at an accelerated pace following an increase in Treasury yields due to rising inflation expectations, soaring government debt issuance, and ongoing fears related to the COVID-19 pandemic.
Over the last couple of years, affluent homebuyers have been snapping up vacation properties at an unprecedented rate amid the pandemic and remote work flexibility. Many are moving out of cities and into suburbs and smaller cities or greener pastures in states with lower taxes and a more reasonable cost of living.
Before the pandemic, demand for second and primary homes grew at similar rates. But pandemic lockdowns and the Federal Reserve’s easiest monetary policies on record, coupled with FOMO and low inventory, unleashed a surge in buying panic in beach towns and mountain areas.
Upscale housing markets in Phoenix and Las Vegas saw double-digit increases in demand for luxury vacation homes this past winter compared with a year earlier as snowbirds flocked to warmer climates for COVID-19 respite and remote work escape options during the pandemic lockdowns.
But as rates rise, the market is more unaffordable to potential second home buyers.
Redfin found that demand for vacation homes declined 7% in February compared to January. The percentage of vacation home searches fell from 7% of all searches in mid-January to 5% at the end of February, “a bigger drop than we saw after last year’s election,” said Daryl Fairweather, Redfin’s chief economist.
“With mortgage rates now over 3%, they are starting to affect buyers’ decisions,” Fairweather added. “The slowdown in vacation home searches is a sign that it may be getting harder for many Americans to afford a second home.”
Mortgage rates on vacation homes have risen to 3.37% from 2.88% in January. A 30-year fixed-rate mortgage for a home purchase is now at 3.12%, the highest rate since July 2020.
The report says: “As interest rates climb toward 3%, that market is going to cool off. Affordability has been bolstered by historically low mortgage rates for much of the past year and a half. As those low rates start to disappear, we could see buying power dip and affordability decline once again. But there will be more sellers on the market this spring and summer than last year, which will help offset some of those effects on affordability.”
“With mortgage rates on an upward trajectory again, it’s likely we’ll see a drop in demand as people reassess what they can afford,” said Taylor Marr, senior economist at Redfin. “The future of the vacation home market will depend on how long mortgage rates stay elevated and if there is another round of stimulus that boosts buyers’ confidence.”
“Vacation home buyers have the most urgency about locking in low rates,” Redfin agent Kathleen Plinske said in a statement. “They’re generally wealthier, more stable and more risk averse than people looking for primary homes.”
by Moe Bedard | Apr 3, 2022 | Mortgage Rate News |
U.S. mortgage rates jumped again this week, according to Freddie Mac’s Primary Mortgage Market Survey of April 1st. The 30-year fixed-rate mortgage rose to 3.29% from 3.21% last week and 4.07% a year ago; the 15-year fixed rate moved up to 2.61% from 2.57% and 3.26%, respectively; and the 5-year ARM rate averaged 2.77%.
The U.S. economic recovery has been fueled by record-low mortgage rates and stimulus checks from the government to help support households during the pandemic. This led to a strong housing market with a balance of supply and demand, said Sam Khater, Chief Economist at Freddie Mac, in a statement accompanying this week’s survey results.
“Mortgage rates are now at the highest level since June 2020,” he added. “While the rise in rates will likely put some pressure on home sales going forward, we expect existing sales to remain close to 20-year highs.”
However, as rates continue to rise and new stimulus checks remain uncertain, economists expect the pace of home sales to slow down in 2021, as buyers are no longer able to afford as much house as they could before.
“The current Fed and Treasury policies have been effective (up until now) in driving down mortgage interest rates and stimulating credit demand by both consumers and businesses alike,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
“That said, policy makers are clearly concerned about rising inflationary pressures which could potentially derail an already fragile recovery given the enormous amount of federal support currently in place.”
According to Freddie Mac’s report, “With vaccinations ramping up and fears of COVID-19 receding, more consumers are out shopping for homes, which is pushing prices higher while putting pressure on affordability.
In addition, the supply of homes remains tight as many homeowners who would be selling their homes are opting to stay put due to low inventory.”
by Moe Bedard | Apr 1, 2022 | Mortgage Help |
Figuring out how much mortgage you can afford is a process that involves several steps. Once you have gone through all of them and have thoroughly examined your financial situation, you can have a much better idea as to how big of a loan you can afford, and in turn, how big of a house to look for.
The general rule of thumb is that about a third of a borrower’s income should be dedicated to financing a home. For example, if someone makes an annual salary of $50,000 a year, they should be able to manage a mortgage of $150,000 if their current debt is moderate.
While this tends to be a common rule for some, it will not be the case for every new home buyer.
A good rule of thumb is to examine your current debt, living expenses, and then adjust for future financial obligations, like children, education, and possible retirement.
Instead of trying to spend all your earnings on buying a home, a more modest approach is sometimes necessary. There’s no better way to be well-prepared for homeownership than making a budget and sticking to it!
Aside from considering your regular monthly costs such as utility bills, car insurance, health insurance, etc. – finding out the exact mortgage costs you will be facing will help you determine whether or not the purchase is a sound financial investment.
You also need to keep in mind that a mortgage loan pays not just for your house, but also for the costs of owning a home, such as insurance, property taxes, and home maintenance. All of these things should be factored into your calculations when you are calculating your mortgage.
There are also many more factors such as your interest rate, credit score, debt-to-income ratios and down payment that affect the amount you can afford to borrow.
The best way to determine exactly what fees you’ll pay is to find a lender and pre-qualify for a mortgage. This process will allow a borrower to receive a loan estimate from the lender, which will have all of the exact costs associated with the mortgage.
Below I will discuss the steps and most effective ways for an individual to calculate how much they can realistically afford.
* If you need to quickly see how much mortgage you can afford and you do not want to read this entire article, please call me at 619-379-8999 or email me at [email protected].
STEP 1: Calculate Your Monthly Income
To qualify for a mortgage, you and your spouse must prove that you have enough income to cover all of your housing costs, including homeowner association dues and property taxes.
You should also add up all sources of your monthly income, including your spouse’s if you are married, alimony if you are getting some and any other income that you receive.
If you have a fixed-term employment contract or receive a salary from your job, then the calculation is easy. Just add up all of your monthly income and divide it by 12 to get the average amount of money you make each month.
Gross monthly income is the total amount of money earned before any deductions have been made. For example, if you make $45,000 per year and work 40 hours per week, then your gross monthly income is $3,750 ($45,000 divided by 12 months).
If your spouse earns $50,000 per year and works full-time. Her gross monthly income is $4,167 ($50,000 divided by 12 months). Adding these two together gives you a gross monthly income of $7,917 ($3,750 + $4,167).
If you receive variable or irregular income from self-employment, there are several things that you can do. For example, let’s say that you are self-employed and your income varies from month to month or year to year due to market conditions or seasonal factors.
To account for this in the calculation of your monthly income for mortgage purposes, simply average out the last 2 years of your income tax returns and use this figure as your monthly income when applying for a mortgage. These calculations can, however, be slightly tricky because some of the deductions on your tax return are added back into your net income like depreciation, depletion and one-time expenses/repairs.
If you were getting alimony every month or had another source of income such as an investment property, then include that as well. Also include any investments in stocks and bonds or annuities (regular payments) as well as any government benefits.
If you receive Social Security, Alimony, Child Support or any other income source that is Non-Taxable a lender may be able to qualify 25% above what you receive which will allow you to qualify for a slightly higher purchase price/loan if needed.
STEP 2: Calculate Your Monthly Expenses
In addition to this information about your monthly income, lenders will also want to know about your existing debts. This includes credit card debt and any other type of installment loans that you carry each month.
Lenders will take the sum of these debts and add it to your estimated mortgage payment to see if you have enough room in your budget before approving your loan application.
This will include any rent or mortgage, food, transportation, taxes, insurance, and other regular costs of living such as your car payment, credit card payments, utility bills, and other recurring costs.
STEP 3: Debt-to-Income Ratios
Mortgage lenders look at your gross monthly income and your monthly debts to determine how much of a mortgage loan you can afford. This is called the debt-to-income ratio.
Debt to income ratio applies to the comparison of an individuals monthly expenses to their monthly income. Lenders use strict debt-to income ratios when qualifying a borrower for a mortgage, so it is imperative that you get a basic understanding of how this is done.
The housing to payment ratio is referred to as your front-end debt-to-income (DTI) ratio and includes all expenses associated with the mortgage – including principal, interest, property taxes and homeowners insurance. To calculate an affordable front-end DTI, multiply 0.3 by your gross (pretax) annual income, then divide by 12.
In contrast, your back-end DTI is the percentage of your gross monthly income that is applied to all other installment debts (i.e., mortgages, student loans, car payments, credit cards, child support etc). One of the first things to do is itemize all of your debts, including credit card bills, personal loans, and car payments.
The back-end DTI shows the lender exactly how much of your earnings go towards your total debt obligations. Generally, they will look for a borrower with a DTI of around 43-55%. If your DTI is below 43% then you have a better chance of qualifying for a loan.
If your DTI is above 43% then you may have a more difficult time meeting the requirements. FHA mortgages allow a higher number with a front-end DTI of 47% of your gross monthly earnings, and a back-end DTI of 57-59%.
How to calculate your debt to income ratio (DTI)
To determine the size of a mortgage you can afford, your total monthly payment, taxes and insurance (PITI) should not exceed 2x to 2.5x your take-home pay or salary after taxes and other withholding are taken into consideration.
The first step is to calculate your gross monthly income.
To do this, simply figure out how much money you are making each month from all of your documentable sources throughout the year and now divide that by 12. If you are married, figure both incomes into the equation.
Remember I said “documentable”.
If you can’t prove it, it didn’t go into your bank account and or you do not claim it on your taxes, then it is not provable income.
Add up all your monthly debts
Things like a car, credit cards, and stuff that will show up on your credit report are what we are looking for. Figure out what percentage of your income is going towards paying off debts. Generally, figures like 5%, 10%, or 20% are used.
Of course, the lower the better, as you will be more likely to be able to keep up with the payments. So, if your income is $4,000 per month and your debts are $500, this would mean that you are currently at an approximate 13% debt to income ratio.
STEP 4: Calculating Your Mortgage Payments
These are some of the major costs a homebuyer faces when buying a home. Once you have all the costs figured out, you’ll want to sit down with your lender or loan officer to locate a realistic mortgage option.
These expenses include, but are not limited to:
Monthly mortgage payment: Principal, interest, taxes, homeowners insurance (PITI) and HOA dues (if applicable).
Homeowners Insurance
Homeowner’s insurance is required to obtain a mortgage. In fact, you’ll be paying for homeowner’s insurance before you even close on the property. Your lender will require that you pay your first year’s insurance premium when you close on your home loan, and it will be included in your monthly mortgage payment.
Homeowners insurance covers the structure of your home and your personal property inside, up to the policy limits. Most policies also cover liability and additional living expenses if something happens to your home.
For example, if a tree falls through your roof or an electrical fire damages half of your house and you can’t stay there for several months while it’s being repaired, homeowners insurance would cover the cost of temporary housing until your home is again habitable.
How much does homeowners insurance cost?
The typical homeowners policy costs between $1,000 to $5,000 per year, depending on where you live. Premiums vary based on factors like location, coverage limits and replacement cost value (RCV) as well as high risk areas for fire or natural disasters.
In general, if you have a $100,000 mortgage on a house that’s worth $550,000 (the value of the house is also called the replacement cost), your lender requires that you have at least $450,000 in liability coverage and $550,000 in coverage for the structure itself. In addition, you’ll want to protect any personal items inside the home with a rider or floater policy.
The more coverage you take out, the higher your premium will be.
Interest Rate
The two main variables that you will have to consider when determining how much you can afford are the loan amount and your interest rate.
Home loans are typically broken up into two types:
Fixed-rate mortgages have an interest rate that is set and does not change for the length of the loan. This provides stability, but if interest rates go down you will miss out on the lower rate. The most common fixed-rate mortgage is a 30-year loan.
Adjustable-rate mortgages (ARMs) start out with a low, fixed rate and then adjust upward or downward after a certain period of time, depending on market conditions at that time. Most ARM loans provide a fixed-rate payment for three to five years and then adjust every year thereafter.
These are also called 3/1 and 5/1 ARMs, which means they start with a fixed-rate and payment for five years, then adjust annually after that.
Private Mortgage Insurance (PMI):
If you do not have a 20% down payment to purchase the home, you will more than likely be subject to paying PMI. If so, this cost will be figured into your monthly mortgage payment.
You pay PMI as part of your monthly mortgage payment until you reach at least 20 percent equity in your home,, but there is no obligation for your lender to do so. This can take quite some time, especially in a rising real estate market where the value of the home increases faster than you can pay down your loan.
PMI can cost between 0.3% to 1% of the original loan amount on an annual basis. That means that if you borrowed $200,000, you may be paying as much as $2,000 a year — or around $167 per month — assuming a PMI rate of 1%.
There are different ways to eliminate mortgage insurance with less than 20% down; you can buy it out as a single premium, which is a lump sum at closing, or through an option called lender paid, which is a less common direction where you would have a higher interest rate that covers the cost of the premium.
Real Estate Taxes:
Real estate taxes are simply the taxes you pay for your home. All residential property requires the homeowner to pay property taxes – prices will vary from city-to-city, state-to-state.
Each town and county sets their own tax rate and the assessor determines the property value. This information is provided to you by your mortgage company, but you may also contact the local tax assessor’s office to confirm or to find out other important information.
Taxes may be paid annually, twice a year or quarterly. Most of the time when you put less than 20% down the lender will require you to include your taxes and insurance with your mortgage payment. In addition to property taxes, some municipalities also charge a municipal tax or supplemental tax – which is usually a fixed amount that doesn’t change year-to-year.
Down payment:
A down payment is required to purchase real estate. The down payment is subtracted from the purchase price of your home. Your mortgage loan will cover the rest of the price of the home.
The minimum amount you’ll need for your down payment depends on the purchase price of the home you’d like to buy and the type of mortgage.
Most conventional loans will require at least 20% down to obtain favorable terms and avoid private mortgage insurance (PMI) however many borrowers choose to only put 3-5% down in today’s market.
Some lenders offer special programs for buyers, however, which may lower the amount needed for a down payment. FHA loans, for example, may allow buyers to qualify with only 3.5% down if they have a credit score of 580 or higher. Down payment assistance programs may be available for buyers in certain areas who meet income qualifications.
In addition to the down payment, you will also need cash reserves on hand to cover closing costs and repairs that come up during the home inspection process.
Closing Costs:
In addition to a down payment, lenders and third parties associated with the transaction will charge fees to close the loan.
These fees may include loan origination fees, credit report fees, attorney fees, appraisal fees, underwriting fees, etc. In general, borrowers can expect to pay approximately 2-4% of the purchase price in closing costs.
While most of these closing costs must be paid by the borrower, some of them can be paid by the seller, split between buyer and seller or even credited by the lender. It is important that you ask your lender what costs are negotiable and which ones are non-negotiable before making an offer on a home.
Points:
Mortgage points are an upfront loan cost that could save money throughout the life of your loan. Mortgage points can be purchased in order to lower the overall interest rate on your loan. A lower interest rate means lower monthly payments as well as less money being paid over the life of the loan.
The cost of a point is 1% of your total loan amount. For example, if you’re borrowing $500,000 to buy a home, each point will cost you $5,000. Usually every 1% paid to buy the interest rate down equates to .25% in rate.
If you are planning on living your home for a long period of time and expect interest rates to rise, it can be a very wise idea to consider that is also typically a tax-deductible expense, of course consult with your accountant or tax professional the impacts to your taxes when you purchase a home.
Bonus Tips
It is always good to undershoot the number you can most afford. It is better to buy a cheaper house and to have extra money, than it is to overdo it and come up short.
Use a mortgage calculator to determine how much you can afford
Lenders tend to use a formula that is very complex to help decide how much a borrower is able to afford. By using a mortgage calculator you will be able to decide for yourself how much you can afford to pay by factoring in your income, debt, and other expenses to see if you qualify for a home loan.
You can start by calculating your gross income on a monthly basis. Then, you can use a mortgage calculator to determine how much house you can afford.
Here are a couple of sites that offer free calculators: Mortgagecalculator.org or Mortgagecalculator.net
These tools will allow prospective home buyers to get a good estimate as to what their monthly mortgage payments should be.
But be aware that this tool will only be able to give an estimated amount, so it would be wise to speak with a mortgage counselor to get concrete numbers.
Interest rates and guidelines may also vary from lender to lender, so it is always important to first shop around for the best deal before you make your purchase. And in the end, the mortgage lender will have the final say as to how much the monthly payment will be.
If you would like to know exactly how much mortgage you can afford, please call me at 619-379-8999 or email me at [email protected].
by Moe Bedard | Oct 3, 2021 | Mortgage News from LoanSafe.org |
The Rich Dad Poor Dad author, Robert Kiyosaki has been in the news lately for saying that a major crash is coming to the real estate market and the stock market due to the debt crisis of China’s largest property developer, the Evergrande Group.
The Chinese developer owes $300 billion in outstanding loans, and their property portfolio looks overvalued to him.
In a Tweet last week, he told his 1.7 million Twitter followers that he expects a massive crash in the near future.
“HOUSE of CARDs coming down. Real estate crashing with the stock market,” Kiyosaki tweeted. “China’s Evergrande Group cannot pay. Valuation of properties fake. Will real estate crash spread to US? Yes,” he said.
“Stocks dangerous. Careful,” he warned in the tweet.
“Giant stock market crash coming October. Why? Treasury and Fed short of T-bills,” said Kiyosaki.
“Gold, silver, Bitcoin may crash too. Cash best for picking up bargains after crash,” he added.
He also told Kitco News last week that this “is going to be the biggest crash in world history.
Kiyosaki has been sounding the alarm for several months now like in June when he tweeted;
“Biggest bubble in world history getting bigger. Biggest crash in the world history coming.”
by Moe Bedard | Aug 5, 2021 | Mortgage Help |
A loan modification changes your current mortgage contract, such as a reduced interest rate or extended loan terms agreed upon by the lender and the homeowner.
For homeowners struggling to manage or behind on their current mortgage payments, a loan modification will probably be the best option to help your current situation. The purpose is to help make your mortgage more affordable so you can avoid foreclosure.
For example, the lender modifies the existing loan(s) to work with the homeowner because of financial hardship by changing the mortgage terms from an adjustable-rate mortgage (ARM) to a fixed-rate loan. They may also extend the loan term from 30 to 40 years or decrease the current interest rate to make the monthly payment more affordable.
Every mortgage servicer in the U.S. has loss mitigation programs in place and offers loan modifications to borrowers who they deem are qualified. But please keep in mind that they are not required to modify your mortgage, and there are no laws that state they must fix your loan so you can save your home.
A key factor required in every loan modification submission is the existence of hardship. The hardship can be temporary in nature or permanent. Still, the borrower must prove the hardship such as financial hardships, job loss, loss of income, rate adjustments on adjustable-rate and subprime mortgage products, etc.
The earlier you address the issue, the better the chances of negotiating a fixed rate and a manageable payment.
What are the types of hardships?
The following list are a sample of hardships that are deemed acceptable by mortgage servicers
1. Adjustable Rate Mortgage – Reset-Payment Shock
2. Illness of the Borrower
3. Illness of a Borrower’s Family Member
4. Curtailment of Income
5. Loss of Job
6. Property Problems
7. Inability to Sell the Property
8. Mortgage Servicing Problems
9. Reduced Income
10. Failed Business
11. Job Relocation
12. Death of the Borrower
13. Death of Spouse or Co-Borrower
14. Death in the Family
15. Incarceration
16. Divorce
17. Marital Separation
18. Military Duty
19. Medical Bills
20. Damage to Property (natural disaster or unnatural)
How does the process work?
A loan modification is simply done by negotiating a lower payment with your current lender on your current mortgage contract.
The process works by modifying and improving the current terms and/or the interest rates on your existing mortgage. Do not confuse it with refinancing because you would not be making payments to satisfy an existing loan; this means that there are no loan closing costs.
It can easily take anywhere from three to twelve months or more to complete, and in some cases up to two years or more. Even if you feel like you’re a perfect candidate for a loan modification, you will most likely have to jump through several hoops before you reach success.
Just try to always be very polite – but firm – each and every time you communicate with your servicer. Keep track of dates/times and the name of any representative you speak with, this may come in handy later if you get conflicting information from a separate department.
The key when applying for a loan modification is to have patience and be persistent. This process may take a long time and be stressful. Try to control this stress and understand that what you cannot control is not good to stress over. This is just business to these big banks and mortgage servicers. If you remember this and do the same yourself, it will help you deal with the stress and sometimes the comedy of it all.
Do the best you can, stay as positive as possible, and hope for the best. By doing this you will take care of business, and also have a life with your loved ones.
What will I need to apply?
Here is a list of items you will need when you submit your loan modification. It is best to gather all these items before you even approach your mortgage servicer and keep this paperwork all organized in a single file for quick reference and or updating.
1. Financial statement
This worksheet can be defined as a document that contains a borrower’s monthly income and expenses that they wrote down. Accuracy of the information on this worksheet is a major factor in eligibility. The absence of debts may disqualify you, due to the fact that your servicer is going to uncover them eventually whether they are on the document or not.
2. Hardship letter
As mentioned above, hardship letters help to outline the events that have led to your mortgage becoming unaffordable. Although crucial information needs to be addressed in this letter, it also needs to be straight and to the point. Using over 2 pages to describe your situation is actually overdoing it.
3. Proof of income
Usually, income must be verified for each borrower who lives in the primary residence. Evidence of income classifies as:
– Monthly pay stubs for salaries of hourly wages.
– Most recent quarterly profit and loss statements of the self-employed.
– Copies of statements or letters from providers of the unemployed or disabled who need federal benefits to live. The statements or letters should include how long you will be receiving the benefits or the 2 most recent bank statements proving the income.
– The copies of the divorce decree, separation agreement, or other agreements in writing filed with the court explaining how much you will be paid and the amount of time in which it will be received for those who receive alimony or child support.
4. Tax Authorization (IRS 4506T-EZ Form)
Your lender needs this form for permission to request a copy of your most recent tax return from the IRS. Borrowers should make copies of this form for their own records.
5. Bank statements
At least two months of bank statements are required when applying for a loan modification. Bank statements enable a lender to see your total income and expenses and how they are being distributed each month. This transparency will help them make their decision. It is common to have to send in statements multiple times during the process, so trying not to get frustrated.
Here are some more tips to help you along in the process
1. Being punctual
Instead of waiting to default on your monthly payments, you could contact your servicer’s loss mitigation department to apply for assistance. Waiting to get into trouble never helps make a situation better. If you are suffering financially, take action. Patience is a virtue that must be practiced during the loan modification process, not before you even think about submitting the application.
2. Researching
As we promote nearly daily here on LoanSafe, the best way to get the best options is to do your research. While starting at resources like our own forum here on LoanSafe.org can be helpful, the best research always comes from the source. The Making Home Affordable Program, the Freddie Mac Streamlined Modification Initiative, the Fannie Mae streamline, and several other loan modification sources all have websites that anyone can go to for more information.
3. Writing
Hardship letters are always vital tools for borrowers who are facing the reality of foreclosure. While being comparable to hardship evidence, a hardship letter differs in that it sets the stage for a borrower to open up to their lender or servicer and allows them to be honest about their situation. Loan modification and short sale processes generally request it. Sample hardship letters and instructions can be found here on here on LoanSafe.
4. Staying organized
Because all loan modification programs request basic financial information such as paystubs, bank statements, 2 years’ worth of tax returns, recent mortgage statements, and a financial budget you have, the organization is more vital than ever when pursuing a loan modification in 2014.
5. Remaining assertive
When trying to get a loan modification in 2014, you’ll want to remain respectful while at the same time never taking no for an answer. Because the submitting of an application requires constant follow-ups on the phone, it takes the right type of assertiveness of the phone when going after a loan modification. Calling at least 2 times per week will help obtain a positive outcome.
6. Being realistic
Realism does not mean signing the first deal that is presented to you. Bargaining still exists in a world where regulations are ruling the industry. At the same time, remember that those with the power are the ones who make the final decisions; Especially if your loan is owned by Fannie Mae or Freddie Mac.
7. Document everything
This trait falls under the category of staying organized as well. Legal ramifications require borrowers to leave paper trails for themselves in order to get as much help as possible with the least amount of trouble possible. Keeping detailed logs, notes on conversations, and tabs on status updates are crucial tools when pursuing a loan modification this year.
8. Being patient
With some timelines adding up to 90 days to complete, the loan modification process is a process that requires the utmost patience.
IMPORTANT NOTE: It is essential during the loan modification process that you call your servicer regularly after you have sent them all your paperwork. Finding out which department is handling your file is crucial as well.
Where can I find more assistance?
What if I need help negotiating with my lender or do not have enough time to call in weekly for updates?
For those out there who need some housing counseling, I suggest you visit the Consumer Financial Protection Bureau’s (CFPB) “Find a Counselor” tool to search for counseling agencies in your area.
You can also call the HOPE™ Hotline at (888) 995-HOPE (4673) or for other mortgage and financial resources, visit: https://www.consumerfinance.gov/coronavirus/
There are some excellent non-profit organizations out there that can assist you through this difficult process. Two non-profits I have found to be very reputable over the years are HOPE NOW and Neighborhood Assistance Corporation of America (NACA).
Now that you have some information about modifications, it is now time for you to begin the process yourself.
You can also join our free forum with any questions they may have, where you will find many homeowners just like yourself in need of assistance.
by Moe Bedard | Sep 11, 2015 |
22 Mortgage Programs to Buy or Refinance a Home Learn about the various mortgage programs for home buyers and existing homeowners. Quick Links Government Help for Home Buyers Government Mortgage Loans Home Affordable Modification Program (HAMP) Home Affordable...
by Moe Bedard | Jan 26, 2009 |
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The articles, comments and all the materials available on this website are for informational purposes only, and not for the purpose of providing legal advice. You should contact an attorney to obtain legal advice with respect to any particular legal issue or problem. The comments expressed on this website are the opinions of the individual author and may not reflect the views of our company. LoanSafe.org is owned by MoeSeo Inc. A California Corporation.
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Section 230 of the Communications Decency Act
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.
The Communications Decency Act or CDA provides that when a user writes and posts material on a website such as LoanSafe.org, the site itself cannot, in most cases, be held legally responsible for the posted material. Specifically, 47 U.S.C. § 230(c)(1) states, No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. Because the reports on Ripoff Report are authored by users of the site, we cannot be legally regarded as the “publisher or speaker of the reports contained here, and hence we are not liable for reports even if they contain false or inaccurate information.
The reasons for this rule are simple. Websites cannot possibly monitor the accuracy of the huge volume of information which their users may choose to post. If a disgruntled plaintiff were permitted to hold a website liable for information that the site did not create, this would stifle free speech as fewer and fewer sites would be willing to permit users to post anything at all. See generally Batzel v. Smith, 333 F.3d 1018, 1027“28 (9th Cir. 2003) (recognizing, Making interactive computer services and their users liable for the speech of third parties would severely restrict the information available on the Internet. Section 230 [of the CDA] therefore sought to prevent lawsuits from shutting down websites and other services on the Internet.)
In general, each and every lower federal district court and federal appellate court that has construed the CDA has held that websites like LoanSafe.org are immune from virtually every type of civil liability when the site has been sued based on information posted by a third party. See Doe v. America Online, Inc., 783 So.2d 1010 (Fl. 2001); Green v. America Online, 318 F.3d 465, 470 (3rd Cir. 2003) (noting that the CDA, “‘precludes courts from entertaining claims that would place a computer service provider in a publisher’s role,™ and therefore bars lawsuits seeking to hold a service provider liable for its exercise of a publisher’s traditional editorial functions – such as deciding whether to publish, withdraw, postpone, or alter content); Carafano v. Metrosplash.com, Inc., 339 F.3d 1119 (9th Cir. 2003); Schneider v. Amazon.com, Inc., 31 P.3d 37 (Wash.App. 2001); Doe v. GTE Corp., 347 F.3d 655 (7th Cir. 2003); Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997); Blumenthal v. Drudge, 992 F. Supp. 44 (D. D.C. 1998).
So, why should you care about this law? Well, if someone posts false information about you on the LoanSafe.org, the CDA prohibits you from holding us liable for the statements which others have written.
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We take very claim as being serious as well as every rebuttal. Please email Moe @ LoanSafe.org any rebuttal you may have to the claims or reports made on his website. We will post any rebuttals to the user created thread to give you a chance to have your voice be heard, but we will not remove any material that has been posted via user generated content.
Use the complaint as an opportunity to make things right with your client and ask that the client works with you to resolve and mediate the issues at hand. If a successful resolution is made, ask your client to update he claim or report to states that there has been a successful resolution to the matter.
If you think a claim or report is false and written with the intention to harm you or your business or you believe it is a competitor then please email me with “supporting†documentation to validate your claims and I will look into this to the best of my ability.
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Consumer activism and service to our fellow man or woman is very important to us. As we continue to improve and expand our services, we. recognize that visitors to our website need and desire to preserve their privacy and confidentiality. Safeguarding our members and the visitor’s privacy is also very important to us. We have adopted standards that help maintain and preserve the confidentiality of visitors and member’s nonpublic personal information. The following statement affirms our continued efforts to safeguard customer information.
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We gather nonpublic personal information about our members on occasion as may be necessary to conduct business with our members or to help advise them. We collect nonpublic personal information about you from the following sources:
- Information we receive from you on applications or other forms, over the telephone or in face-to-face meetings, and via the Internet. Examples of information we receive from you include your name, address, telephone number, social security number, credit history and other financial information.
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We reserve the right to amend (that is, add to, delete or change) the terms of this Privacy Statement from time to time.
by Moe Bedard | Oct 11, 2008 |
All LoanSafe testimonials are from actual members who have obtained a loan modification, short sale or some type of loan workout with the help of this one website since 2007. In the last seven years since the LoanSafe forum has been in operation, we have saved approximately 10,000 homes and families from foreclosure ( fully documented online) and countless others that have been undocumented.
Saving homeowners, lenders and communities tens of millions of dollars in the process. All without one single dime of outside funding or support!
LoanSafe.org protects families, homeowners, communities, lenders and changes lives.
Loan Safe Testimonials:
riddlemethisbatman
I feel like such an idiot, Moe. Here on the forum, I thought Evan was your brother (knew you had a son named Evan but assumed he was named after his “Uncle Evan”). I mean, I saw all those pics of little Evan…LOL. That is the crux of my shortcomings—-missing the obvious.
I am grateful for all your time and energy spent to establish and run this forum—thank you, Moe. I hope you’re blessed with the realization that what you have done has made a positive difference to so many people. God bless you.
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To the LoanSafe Team, Contributors & Fellow Members;
Someway – somehow, I was lucky enough to find LoanSafe late in 2009. Yes, I might have been a little late but hustled to catch up to the wave. Truly inspired after reading Prof White’s paper on Walking Away.
There was already a loyal following when I joined LoanSafe and their personal experiences confirmed I was on the right path. Then I started making my own plans quietly & privately. I’m still a little paranoid so I’ll share the general picture:
State – CA
House Purchased – 2006
Mortgage – Conventional w/ 20% down
2009 – Underwater by at least 40%
Stopped paying Mortgage – 2010
Notice of Intent – at least 3 times
Mortgage Sold
Foreclosed – 2014
CfK – Yes
So to all the long time members, thanks for sharing, supporting and leading the way. To the recent members, don’t be shy – study hard for your particular state & personal situation, ask all those questions you have – then take the action that works best for your short & long term financial security.
To LoanSafe Team – THANKS very much for creating a platform for so many to regain their footing, learn/study all the options and then inspiring them to fight back against the Banks / Mortgage companies that wreaked havoc on our economy in order to re-establish their financial foundation. You are a big part of the solution vs the financial system that triggered hardship for so many. Forever grateful.
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Author : alohagal (IP: 71.xxxxxxxxxx) on 4/1/2011
E-mail : m*#^[email protected]
Dear Moe and staff,
I just wanted to tell you THANK YOU for this site. You are such a blessing to me and to countless others. Before this site, I was a nervous wreck. The forum has helped me kept my sanity. It has given me such a wealth of information and I didn’t feel alone. What a great support group!! I looked back on my posts and remembered how frantic I felt. And thanks to this forum, I was able to find the information and most of all the feeling that there is HOPE. This forum gives HOPE to people! Thank God for you Moe and your staff!!
I received my first mortgage modification approval last year (OneWest) and just recently, got my second 2mp (Citi) approval. It was an ordeal (end of 2009 to March 2011), but I followed the threads that was for me and got great advise from everyone!!
There are no words to tell you how Thankful I am. I just wanted to write this to tell you that I am very very grateful for all you do at Loan Safe.org!!! This website was truly a blessing for me!!! I pray that you have good health, happiness and prosperity!! : )))) May God Bless you, always!!!!
From the bottom of my heart, THANKYOU!!!! – Alohagal
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Chris516 2/15/2011 – – OMG OMG I GOT MY PERMANENT LOAN MODIFICATION FROM BOFA!!!!!!! TODAY!!!! IS this a good one?
They increased my loan balance $11,373.99 (Past due interest & taxes an insurance)
They increased my mortgage term 6 years and 5 months.
My payment is $1500 less a month!!!!!!
1-5 years-2%
6-3%
7-4%
8-33-4.75%
I cant not believe after 18 months I got it!!!!
MOE, Meance HUGE CYBER HUGS!!! I found this site as a newly divorced single mother trying to keep my home and I had no idea how. Your advice guided me and without you I would have NEVER got this!!!
Yes it is a HAMP..it states HOME AFFORDABLE LOAN MODIFICATION
however I dont see the $1000, benefit?
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Kcarb 12/8/2010 -I have been browsing this site since the beginning of October (months after starting our modification review) and read posts almost every day, both happy for the successes on the forum and also full of anxiety when I read the modification stories, where the outcome is grim. We are in the midst of a mod process and it is really starting to get to me. Some days I feel hopeful and others, not at all. I am so impressed with the amount of knowledge that this forum provides.
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Member Kirkspal Joined August 2009
Well, after 25 months, forbearance, 2 trial mods, 15 trial payments, and a foreclosure notice, Chase has modified my mortgage!!! Our foreclosure sale date for our house was to be Feb 16, 2011. Woo hoo, we get to keep our house! I take it as being official today. I have not received the signed agreement back from Chase but the website has our updated information listed after being “unavailable” for a while now.
IT CAN HAPPEN PEOPLE. I have felt hopeless, depressed, and angry for 2 years now. Don’t give up the fight if you really want to keep your home. I have been living scared for so long I feel like I can finally breath. Our new payments are still a lot for us but we are going to make it work.
THANK YOU MOE AND EVAN AND EVERYONE ON THIS SITE THAT KEPT ME GOING. Good luck to everyone still in the fight
https://www.loansafe.org/forum/chase-mortgage-tell-us-your-chase-story/36020-1-more-success-moe-evan-25-months-making.html
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date Fri, Sep 10, 2010 at 9:13 AM
subject Re: Happy Birthday from Mortgage Forum – LoanSafe.org
Thank you and this forum for everything. Helped me save my home and my sanity!!
Shawna
Founding Senior Stylist &
New Stylist Trainer, Gigi Hill
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9/5/2010 – Hello Moe, I just wanted to tell you, your website has saved my life (literally), I stumbled on your site in the middle of losing my home, I was able to network with people going through the same thing as I am. I didn’t feel alone anymore, I have tried to give back and counsel those that haven’t walked in my shoes yet. We hear so much about what is wrong with America, I just wanted you to know, you are whats “right” with America. I am known as “Homesweethome” on your site, and thank you again.
Nina Mitchell
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LinkedIn
Linda has sent you a message.
Date: 7/27/2010 Subject: you saved my life
Hi Moe – about 8- 9 months ago I found your website. I read other “victims” stories and knew I was not alone. I email BoA
president Barbara as suggested and it worked. I have been in the Loan Mod with them since January and just have to push to get the final paperwork done. But I could live and enjoy my life when I got the help from you.
Maybe we have learned hard lessons – but you actually do something about it for us little guys. Mille grazie! Linda
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Dear Moe,
This is unbelieveable, but I have great news!
I just received a phone call today from my lender Indymac and they finally gave me the HAMP program loan modification after 1 year of fighting. I did contact HUD counselors who have assisted me through this present request for a loan modification. I would definately suggest everyone to contact HUD to have them assist and represent anyone with their loan modification. I had been denied 5 times in the past year. It has now been 1 year almost to the date and it seems as if the bank just waited for me to go into foreclosure to really consider doing this. As of this weekend 7/30 I would only be 30 days away from a trustee sale.
First of all I want to Thank God for this miracle. And, I want to thank you for so kindly responding to my email. I wish to pass along this information to any and all others of thousands of people who are still fighting for their true right to a loan modification and help everyone everywhere and especially on your website. I love your website and God Bless and thank you so much for it. It has truly helped me to keep in touch and updated and given so much great information to keep my head and heart lifted up when I was drowning in pain and fear. I pray for everyone on your website everywhere tonite and for you and your family for doing such a wonderful giving thing for so many people.
I will still stay updated and wish you and everyone the best blessings. We all deserve a second chance to keep our homes and maybe the banks will realize this as things just get worse and worse. Afterall, they are and have nothing without us homeowners. You are right, keep on fighting, screaming and kicking.
These are our homes! Thank you again.
Respectfully Michele
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My name is Anita Nelson and Loansafe.org helped me and my husband save our home!!! I am a true success story and without this site we would not be in our home!
We bought our home in July 06 in Stagecoach Nevada. Our purchase price was 333,000 we obtained a loan with the help of the seller doing a carry back of 64,000. Immediately after the loan closed the seller started harassing us to get that paid even though we had 5 yrs. We refinanced 6 months later into a horrible loan with 11.65 % interest rate with a payment of $3515 a month (that didn’t include taxes or insurance) the broker said its ok, do this for 6 months, I will get you 11,000 to pay the payments and it will all be ok.
Well it wasn’t!!! After 6 months he couldn’t help and almost a year later when the 11,000 was just about used up with helping making the payments Avelo Mortgage paid our taxes. They were not late, the bill was sent to them by misstate and they paid them and raised our payment $288 a month!!! Now I knew for sure that we couldn’t do this much longer our payment was now $3800 a month. I called Avelo and they said I could apply for a loan modification, which I did and 1 month later was denied with no reason at all!! Deals off, which was their exact words!! I was crushed. I had to tell my husband we were going to lose our home.
That was in October 07 I will never forget the day my husband said to me, you don’t give up, you are a fighter and I know you can figure this out! So the fight was on!!! January 25, 2008, I found Loansafe. I joined right away and told my story. That same day I had so much advise on what to do and where to start. With the guidance from the moderators on the site I finally got up enough nerve in February to do a QWR, write letters to everyone I could, did an interview for our local news and called called called Avelo daily, every single day I called. I was determined to be a pain in the ass!
On February 18th Avelo called me as I was driving to work and her exact words were, What can we do for you Mrs. Nelson to help you with your loan? I explained to her that even though my loan isn’tt going to reset for another year we just can’t do the payments. She went over our financials and said we qualified for a loan modification. I faxed here everything she requested by Friday February 22nd and she said it would be a month before we knew anything.
On March 7th, Gil from Avelo called and said our modification was approved; new interest rate will be 6.75% fixed for the life of the loan with a new payment of $2686 a month and that includes taxes and insurance. No payment was due for March and new payment starts April 1st. I was and still am delighted. We are still on cloud 9 even though it has been a few months of our new modified loan.
Our lives have changed so much. Our home wasn’t purchased to be an investment it was purchased because we love it and it is where we want to spend the rest of our lives. It is OUR HOME!!! And it wouldn’t be without Loansafe, Moe, Cat, Andrew and everyone else.
I just really want to say Thank you from the bottom of my heart!!!
Anita Nelson
Loan Safe success # 65
P.S. Moe should have a copy of my modification; I did email it to him when I got it for him to have for his success file!!!!
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JacMac – Homeowner and single mother from New York – I want to wholeheartedly recommend this forum to those who just popped up here or may have been lurking and are scared, unsure perhaps you’ve just realized you’ve been taken for a roller coaster ride, and the price of the trip is more than they said, more than you can afford — the point is, the forum is a wonderful place, and it is SAFE!
The internet can be a scary place, with people posing as someone who wants to help you but what they really want to do is make a buck. This is NOT one of those places.
You can save your home OR do something about what is happening to you. Even though you’ve been victimized, you don’t have to be a victim. Take power over your life again!!!
This forum can help you make choices that are right for you, and you’ll be amongst people who are just like you, and who care. I’m speaking from personal experience AND I’m not getting anything for saying this!!
See Jac Mac’s loan modification. Courtesy of Loan Safe!
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Andrew P. – Homeowner, police husband father of twin boys from Pennsylvania saves his home. (Now a Loan Safe moderator & also a. A perfect example of the power of paying it forward and the power of this website)
Received an apology letter and loan mod via fax from countrywide office of the president. Secretary of Mozilo called and asked if they can fax along with mail the documents. Maybe tomorrow will send Moe and email with the scanned letters to post.
If you go back and read some of posts I have been worried about my mortgage for a while now. I had originally called in August and asked about it but was told since I’m not late they couldn’t do anything. Then in October when I called again I was told that I could apply. After months and who knows how many hours on the phone.
I was finally approved for a 5 yr freeze on mortgage. I even had to go as far as threaten to rescind my loan and send RESPA letters with the violations Brian had found. I really am very grateful of Moe for this site and his wisdom and guidance. I feel very stress free right now. I will be staying on this board to help others who were in my predicament too.
THANKS AGAIN MOE !!!
See Andrew’s loan modification from the Office of the President Of Countrywide, Angelo Mozilo
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To Whom It May Concern:
All was well till my husband’s job laid him off for 2 weeks in 10/06. That 2 week lay off lasted 6 months at which time he took on a new job with a 25% reduction in pay.
We had Litton Loan Servicing with a 10.5% ARM 5/30. Needless to say nothing was paid timely. In 3/07 we contacted Litton to apply for a modification, they granted us a forbearance plan increasing our payments an additional 1200.00 each month for 18 months. Our payments went from 3041.94 to 4200.94 just trying to save our home.
Needless to say we zeroed out all of our assets to meet this obligation until the well ran dry in 10/07. Hence, we break our forbearance plan.
In October we contacted Litton begging/pleading and crying for a more affordable monthly payment to no avail. November and December the same result NO HELP.
Christmas comes and Christmas goes or lack thereof (picture no X-Mas with 3 children) and an Italian Husband. We’re talking no gifts no seafood no nothing.
Right after the New Year 01/08 we get fired up and are determined to be heard. We can afford our home but we cannot afford to catch up.
To Google we go.
We trip on Loansafe.org. Now I will tell you we were skeptical. Who helps others for free? Better yet how many other people could really be under a Notice of Default? Boy, were we shocked.
We became part of the Loansafe family in 01/08. And we say family because that is what they are. Family helps out family and boy did they help us out. 24 hours a day, seven days a week. No question was too stupid for them to answer and let me tell you we asked some real doozies.
With the hand held assistance from our family at Loansafe most specifically Cat but at times Moe as well (he is really busy) we learned how to fight for ourselves and win.
Our fight started in February and we won our modification in April. We went from 10.5% to 8% for 5 years J a savings of more than $300.00 each month.
You would think that is the end. NOT.
Cat offered to review our modification documents for us so that we could sign then with piece of mind. We scanned them to her, she gave us her stamp of approval and off to success we went.
Still think it’s over. NOT.
30 days after our online account is updated with the new payment amount and zero arrearages Litton contacts us and reveals an escrow shortage that will drive our monthly payment back up and over the top, worse than when we started the modification.
I report this back to my family at Loan safe and once again Cat rescues us. She recommends we contact Litton and ask them to stretch the shortage out over 3 years. Once again we followed her advice to the T and Litton agreed.
Now although I owe my home, sanity and happy life to Cat and Moe I also owe it to all the members on Loansafe who supported me through those very, very long sleepless and crying nights.
Thank you Loansafe
Joseph and Lynn Arena
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Dear Moe,
I have been fighting to keep my home since 2003. To me it’s not Real Estate. It’s where my 10 year old son has grown up, where birthdays and Holidays have been so special, and where family and friends in town always feel safe and warm and loved. I was blessed to grow up in a place like that on 2.5 acres in Riverside California, and I’ve done my best to duplicate that atmosphere on my acre here near Wellington Florida.
When I read your words and quotes on your website, I felt like I had been surviving alone in the desert and someone had just given me a 5 gallon container of purified, ice cold water. Thank you for being here. And thank you to everyone who has contributed to the site. It is truly one of the most wonderful contributions to the world imaginable. And that is in no way an overstatement. Please accept my heartfelt Thank You Moe.
Warmest and Kindest Regards,
Damon H
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Dear Loansafe.org:
I bought my first house in February 2006, which I was so happy. I was making my monthly mortgage payments on time until I ran across some financial difficulties that was totally unexpected. I even ran out of my emergency money just to keep up with my payments. I fell behind by one month and I tried to get my mortgage company, Countrywide, to help me to work something out. Well, in November 2007, I was told that I could apply for a Loan Modification because my Adjustable Rate was going to change in February 2008 and obviously I could not qualify to refinance.
I sent the necessary paperwork, (i.e. paycheck stub, bank statement, hardship letter). It took Countrywide two months to respond. In January 2008, I received a FEDEX package with my loan modification approval to temporarily lock my rate until 3/2013. I sent the paperwork back (got it notarized) to Countrywide, which they received it on 1/28/08. Well, after speaking with customer service and attempting to speak with someone with the loan workout department, I started sending my new monthly payment in 3/2008, as agreed. From March to June 2008, I received paperwork indicating that I was in default and possibly the loan foreclosure process could be initiated. I tried calling the loan work out during that time, which I was getting nowhere.
Then one day, I decided to search on the Internet on any information that can help me with my situation. That’s when I found out about Loansafe.org. That was a blessing because a lot of the information on the site was very helpful. And after reading a lot of the blogs, I found out I was not the only one going through this. I started a new thread with my situation and Cat responded right way. I was amazed. She gave me a telephone number to Tabitha at Countrywide. After speaking with her, I got my situation resolved in a week. I was thrilled that finally this was corrected.
I also wanted to mention that during that week waiting for my account with Countrywide to be corrected, Cat and other bloggers were so supportive. It helped me a lot because this was so stressful to a point that it started to affect me emotionally and physically. Anyone who is going through this mortgage crisis should go to this website. Moe, Cat and the others are truly Angels for helping people like me who are going through a difficult situation. I cannot stop raving about this site. I even referred a friend of mine who is going through a similar situation and I believe she is in the process of getting her situation corrected, also.
I want to say THANK YOU, CAT, MOE AND THE OTHERS ON LOANSAFE!!! You really helped me and I hope you continue your success in helping others like myself.
Sincerely,
Yvonne Bowen
Lancaster, CA
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I started the loan modification process on 11/20/07 by sending in my financial info, pay stubs and bank statements. I followed up every week and did not really get the best feedback.
In late December, a great loss mitigation rep told me that I “fell through thru cracks” and gave me another fax number to send my pay stubs and bank statements. She told me that she would help me put a rush on my application. She also told me that after receipt of the documents, they would put the foreclosure on “hold”. I think “hold” means moving the sale 90 or more days.
Well since I have followed this GREAT website, I have been calling every day since about 1/3/2008. On 1/10/2008, they told me that my complete package was received and accepted on 1/7/2008 (official start date I guess)
Since then I have been calling every day to follow my file. The loss mit dept at Chase has been very good. Everyone is polite and patient.
Today I called and they told me that I am approved! and will be receiving my loan docs in the next few days! They did not tell me the interest rate because it was not available (not sure if true) but they did tell me the down payment ($8152) by 2/14. I asked about the step program(thanks to the website explaining that) and they said that I was recommended for that (whatever that means)
So needless to say I am happy and anxious to receive my docs. My loan mod process so far has been about 30 days since the official (1/7/08) date.
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Bob – Homeowner from San Diego – I have finally got my loan fixed for 5 years @ 5.99%. Fully amortized loan..principal and interest. After almost 6 months of doing battle with Countrywide I am done. I have to make two more payments (Jan. and Feb.) at 7.45% but then in March 08 it goes back down to 5.99% saving me $610.00 a month! Great news!! I do not even have to sign any paperwork. They said it is a done deal and I will probably receive a letter in the mail today.Here is a link to my original thread:
https://www.loansafe.org/forum/showthread.php?t=162
Hopefully 5 years will buy me enough time to pay down my second mortgage and put me in a good position to refi. I want to thank Moe Bedard, Brian and all the forum members for all your help and encouragement. I never would have been able to keep my home if it wasn’t for the knowledge I gained from www.loansafe.org. Thank you all so much!!
Do not give up!! Keep up the fight!! You to can stop foreclosure!!!If anyone needs any help or advice in dealing with CW from someone who has been through it, just drop me an email at
[email protected] and I will do whatever I can to help.Paying it back and forward is the way to go!
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Thanks again for all the congrats! Well I got my docs today! As promised my loan is at frozen at 5.7% for 5 years!! My modification did not cost anything and we do not have to make a March payment.
In the cover letter, it said to return the application for auto withdrawal of payment, but package did not include app. so I called our negotiator Christy Mcgowan (very nice girl) and she said that it would not be necessary, it was an oversight on her that she didn’t omit that part. She also told me that it was not possible to modify our second rate (9.875%) That is fine by me, because it is fixed and I was really only worried about the first! It would have just been the cherry on top! I still can’t believe that this is a done deal! I am so happy and relieved!!!!
Here are the biggest misconceptions that kept me from even trying the modification route until I found Loansafe.
1. You have to be late in order to qualify for a modification
2. You must have a serious financial hardship
3. It takes 3-6 months
4. You can’t do this yourself!
5. It’s a pain in the a$$!!!!
Reality
1. I was never late
2. good steady income, but no LTV
3. 5 weeks
4. You CAN do this yourself!!!! (with the help of y’all)
5. It’s a pain in the a$$!!! No gettin around that one! I lived at the Kinko’s fax machine!
All in all my case was “easy”. My only real problem was LTV. I feel for so many of you out there that are in much more dire situations than my family and I hope that each and every one of you can find the best solution for you. Don’t give up! Call call, call, call and fax, fax, fax” I am positive that the turning point in my case was the QWR. It definitely put some fire under their bums!
Thank you,
Shannon AKA shannonek – Member and a “Success with CitiMortgage HELOC ”
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We were very lucky. I am relieved this is all over. But, I’ve learned so much these last five months. On Saturday, my husband and I volunteered at the local homeless shelter. We know how fortunate we are to still be in our home. It’s our time to give back to those who are not as fortunate. We are both committed to doing this monthly, to remind us our journey and to be thankful for being given a second chance.
To all of you still fighting your battle, don’t give up. Stay in contact with your lender until you’re even driving yourself crazy. Ask questions, explore options, and contact elected officials. Don’t be afraid to tell your story to anyone who will listen. I will continue to pray for all of you, that all of you will find a permanent solution as well.
Thank you to Moe, Poppy, Cat and Andrew for all of your advice, support and encouragement. I could not have done it without you!!!!
echo2 “I did it!!! Modification approved!!!!”
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Well, today I received a call from Citi Mortgage that our mod application had been approved. Our first payment is due in April. We can skip March’s payment.
The whole process took about three weeks. We will be getting our loan mod papers via UPS this Friday!
Three weeks ago, I sent in my paperwork, financial information, hardship letter etc. to the mod department.
I called to follow up shortly after and inquire as to whether or not they had received my documents. I was told that they had and that if I didn’t hear back by March 1st to give them a call.
I decided to email three people with Citi Mortgage. The CEO and two others from the office of homeownership preservation. I emailed them last Thursday and explained my situation to them. I got an email from one of them the next day letting me know that someone would contact me by end of business on Monday (two days ago). Sure enough, someone did. This person took financial information from me over the phone and asked me to fax him a hardship letter, my W2’s and a pay stub.
The next day, Tuesday, the closer sent off our package to the underwriter. Today, Wednesday, we received a call from the closer letting us know that our application was approved and we were all set.
Our interest rate went from 13.6 to 2% for the next two years. After the two years are up, they will review our info again and determine whether or not another modification is needed. Our monthly payment went down by over 500.00 dollars!
I’m still stunned.
A few more details. We were never ever late on this loan. Nor have we ever been over 30 days late on our first mortgage.
Now, we are working on modifying our first which is set to reset on December 2008.
So, there you have it. It can be done!
salvega530 – Member “Chase Success III”
Hello everyone!!
