Most members have just begun the Trial Modification step of the program...........if the loans were eligible and backed by FannieMae and FreddieMac, the Trial part of the modification has been automatically sent on these loans.
For the MHA program, If you report a hardship, your servicer will:
• Determine whether your loan meets the minimum eligibility criteria (owner occupied, originated on or before January 1, 2009, unpaid principal balance equal to or less than $729,750). If yes
• Ask about current income, assets and expenses as well as the specific circumstances relating to the hardship to determine if you will be unable to make your mortgage payment. (Your servicer may initially accept verbal information about your income and expenses, but eventually you will need to provide proof in the form of tax returns, pay stubs and other evidence).
• Determine if your monthly first lien mortgage payment is more than 31% (approximately 1/3) of your gross or pre-tax monthly income. If yes:
• Add past due charges (interest, taxes, insurance and costs that your lender paid to other parties on your behalf – but not late fees, those must be waived) to the loan balance.
• Determine how much of an interest rate reduction will be required to get your first mortgage payment down to a point where it is no more than 31% of your gross monthly income.
• Apply a value test to determine if the cost of the modification (including the government’s incentive payments) is less costly for the investor than not modifying the loan (loans held by borrowers who have a lot of equity or whose incomes are very low in relation to the value of their homes probably will not pass this value test). If yes:
• Put you on a trial modification for three months at the new interest rate and payment level.
• If you successfully make the payments and are current at the end of the trial period, your servicer will execute a permanent modification agreement that will lower your interest rate to a fixed rate for five years, and then capped at a low rate for the remaining life of the loan.
Here is the link to the list that they update as the servicers sign the contracts to participate and receive funds...........
Making Home Affordable -Contact Your Mortgage Servicer
The program is voluntary to other servicers that are not on the list as of yet, these servicers do not have to follow the guidelines to the program......
You can write a QWR to obtain a copy of your Adjustable Rate Note to see what your rate is tied to, most are libor, and calculated on a 6 month basis, however each note also may involve "percentage points" that are added per the note to the current index at the time the change is calculated..............depending on that percentage.........even if the libor goes down...........the rate wouldn't necessarily follow that path.