Forbearance and "Pre-approved" for Obama Plan?

[imupsidedownfl]

First off, I’ve been visiting this forum for a couple months now and I’m very grateful for it. I’ve learned a lot. Thank you.

Here are my specs:
I bought my house in 2006 at the peak of the market for $408k. I put 20% down (about $90k) and financed the remaining amount for 30 years at 6.15%. My current mortgage is about $2,550 per month. Not a Fannie Mae or Freddie Mac investment. As everyone is aware the market here in Florida has fallen apart and you can now buy my home for a little under $150,000. I currently owe $327k. Add a pay cut and this has all been really difficult to swallow.

I called WaMu (now Chase) and talked to them about a loan modification on Feb. 7th. I faxed my paperwork within a couple of days and called to confirm about 2 weeks later. Thankfully, they didn’t lose any paperwork and verified they had received it. Step 1 complete.

From here I called at least once a week to see if there were any updates. Nothing happened until Friday, March 20th. I didn’t get a call from Chase, but from a local appraiser who wanted to make an appointment to appraise and take pictures of my home. I called Chase right after I got off the phone with the appraiser to see what was up. The representative told me I’ve been assigned a councilor and had been approved for a forbearance agreement and he said I was “Pre-approved” for the new government modification program. However, I was told that I would need to complete a three month forbearance agreement @ $2,200 per month “to prove” I could make steady payments before I could start the government plan. I haven’t made any payments for February or March. I wanted to talk to my assigned councilor but she wasn’t in the office. He gave me her contact information and I’m going to call her on Monday.

Why would I have to complete three month forbearance before I can start the government program? Taking my payment down $350 is nice but still not practical for my situation. My payment would need to be around $1750 to be at the magic 31% mark. I’d just like to get some advice on how to proceed from here.

I’d appreciate any opinions.

Thank you.

[Maurice Bedard]

Hi imupsidedownfl,


Welcome to the forum and thank you for joining.............

You would need to clarify with Chase as to exactly what you are receiving if those payments are not at the 31% target of your gross income.......

the trial modification can be utilized as a part of the program ..........

In summary, participating servicers will (in order):

• Determine that a loan meets the minimum eligibility criteria (owner occupied, originated before January 1, 2009, UPB equal to or less than $729,750). If yes:

• Obtain sufficient income information to determine if the borrower has a front-end debt-to-income (DTI) ratio of 31% or greater (verbal income may be accepted for initial evaluation subject to verification prior to final approval). If yes:

• Capitalize (add to the loan amount) accrued interest, past due taxes and insurance, delinquency charges paid to third parties (e.g., for inspecting the property), and escrow advances by the servicer – but not late fees or other default fees charged by the servicer;

• Determine how much of an interest rate reduction is required to get the borrower's mortgage payment to 31% DTI, and if the DTI still exceeds 31% at the rate floor of 2%, modify the loan in other respects specified in the Guidelines;

• Apply a Net Present Value (NPV) test to determine if modification (including the incentive payments) provides the investor with a better financial outcome than foreclosure. If yes:

• Put the borrower on a trial modification at the new interest rate and payment for three months.

• If the borrower is current at the end of the trial modification period, the servicer will execute a modification agreement that includes escrows for taxes and insurance even if the prior loan was not escrowed.

[imupsidedownfl]

So I talked to my Chase rep today and she had my income jacked up. That's why my payment only went from $2,587 to $2,200. After talking to her today she said she could mod my loan to $1,930 per month. To do that my interest rate would be set at 3%. She said that would be at 34% of my income which is within the guidelines of the new plan.

I don't really understand why I can't get right at 31%, but at this point I'm not sure if should really push the issue considering this is what I think a good deal. Can I get someone's opinion on if they think this is a good deal based on what they've seen? I know you can't tell me what to do, I'm just looking for some outside advice. Thanks in advance.

[Maurice Bedard]

this is the way the guidelines word it.............

The Front-End DTI Target is 31%. The Standard Waterfall step that results in a Front-End DTI closest to 31%, without going below 31%, will satisfy the Front-End DTI Target.


3% is a great rate...........we do not see that often from the investors with Chase.

[imupsidedownfl]

I think it's a pretty good offer. They are going to FedEx the paperwork and I'll have a local real estate attorney take a look at it. I'll keep you posted. I really appreciate eveyones help.

[chasepmt2hot-firefighter]

Was the 3% for the life of the loan or a step rate that will increase in 1 or 5 years?

[Audrey&GunnersMama]

Unless it's a freddie mac or fannie mae loan they are not obligated to go to the 31%. That's a great mod! I would accept it

[Maurice Bedard]

Audrey&GunnersMama


Is that what WaMu is telling their reps...........because that isn't what the guidelines state..............it sure looks as though they would have to get to the 31% using the waterfall steps...........

The refinancing option is only available for conforming loans owned or securitized by Fannie Mae and Freddie Mac. Most conventional loans including prime, subprime, adjustable, loans owned by lenders and loans in securities are eligible for a Home Affordable Modification.


Determine how much of an interest rate reduction is required to get the borrower's mortgage payment to 31% DTI, and if the DTI still exceeds 31%at the rate floor of 2%, modify the loan in other respects specified in the Guidelines;

[Audrey&GunnersMama]

I WILL HAVE A VERY LONG EXPLAINATINON FOR YOU A BOUT WAMU TOMORROW. ITS'S 8 pm here and i just want to focus on 9pm and quittin' time (sorry for previous caps-- was notating a previous phone call).


But I will take some time and answer your question with a good explaination tomorrow

[Maurice Bedard]

I was just askin.........


Well you have a good rest of your night and I will wait patiently until tomorrow to hear WaMu's interpretation of the plan.........

[imupsidedownfl]

Based on what the rep told me the 3% interest is for the life of the loan. She went down to 34% of my income which she explained was within the plan guidelines. I'll keep everyone updated on when I recieve my package. I'm pretty surprised at the speed this is all moving in.

[chasepmt2hot-firefighter]

imupsidedownfl,

I agree....this is a wonderful rate. I hope it's for the life of the loan.

[flyingpuppy99]

I would watch this. This is the same offer I recivied. They only down fall is they start reporting that your payments are late for 3 months. This will in turn raise you intrest rates and min payments on your credit cards.

[chasepmt2hot-firefighter]

What did you do about the offer? Did you counter?

[flyingpuppy99]

I have been trying to get a hold of her to talk to her about the offer and Its been over a week and a half since I left her a message. She wont answer her phone either.

[imupsidedownfl]

Okay, I got the FedEx package today. It looks pretty basic, they have a 3 month payment schedule at the $1930 they offered. They want me to sign the forbearance, give them my most current tax return, and re-submit the bank statements, paystubs, etc... then send back to them by April 4th.

It says very clearly that if I make the payments on time they will "consider" offering a modification. Is that standard language? Should I push for something a little more concrete? I'm not sure what to do here.

[chasepmt2hot-firefighter]

Why would they not protect everyone from the credit card companies rate hike due to credit ratings? Why is it that Chase can't give the very best service? Just like the person above stated her analyst said 34% was within their guidelines. What the hell is wrong with going to 31% for this person if it's the best you can do? Wouldn't you feel better as a person knowing you did the very best to possibly really help someone? Please who feel the need to have power or control at the expense of hurting and/or disappointing someone else has serious issues. They must not have any say so at their own home. Their spouse must treat them way beneath he/she for they to come to work and not want to give 100% of whatever can possibly be done to make someone elses life better. I wonder what went wrong in their own life to make them so unhappy to strangers. Chase needs to give mental evaluations to it's employees. They should feel great about changing lives, knowing someone's child will have a better home life, knowing they'll contribute to happiness a complete happy home. These people need help or need totally exposed to the media to knock them off their feet for their own reality check.

[Maurice Bedard]

chasepmt2hot-firefighter,


Take it to the top...........

JP Morgan Chase
Jamie Dimon
CEO
1(212) 270-1111
jamie.dimon@jpmchase.com

[chasepmt2hot-firefighter]

Cat, I heard Jamie Dimon would just totally blow me off. Unless it was with a reporter along with her crew! If I ever got the chance to cut loose on Jamie Dimon, he might hire me. I'd clean up that mess of slackers in no time. The girl I talked to the other day sounded like she had a few pain killers after lunch. She wasn't right.

[Maurice Bedard]

I wouldn't be right either if I had to work with 300-500 files............I would have to far exceed the limit of Red Bulls per day to be perky after getting to the bottom of that pile.......

[chasepmt2hot-firefighter]

You are to funny. I've never tried a Red Bull...

Random thoughts...

I can tell you that I've tried to increase production (our business) in every single way possible. You don't come out ahead half-way doing things. You'll always have to come back and redo it again, fix the problem you created or possibly be eliminated from ever getting the chance to fix it. It takes twice as long to redo something and twice the money. Time is money. Money is time away from your children.

If a firefighter was called out to an employee at Chase's house, should the fireman immediately do their very best to save the property? How about all the photos and your child's baby books? How about your pet? Should a firefighter delay his arrival to your house because he heard on the radio, it's a large task and if it blazes to a level of only fighting the fire from the exterior, it would be less work than entering the home? Would you be angry as you stood watching a side at his mercy begging to salvage any part of your life? Just anything he could salvage of your home? What if the firefighter decided to start with your shed or your detached garage and not your actual home? What if the firefighter decided to roll his hose entirely back up and start the process over again because he had the authority to do so? Remember, it certainly is his call as your tax money pays his salary. It sure could save him a lot of trouble and from being exhausted to take his sweet time. Right or wrong the damage has already been done. How would this Chase employee feel? Possibly that this fireman had a chance of salvaging something but thought he was doing enough by saving your lawnmower? What if he said, look I saved your weed-eater too... just be happy, you can rebuild your house someday.

What if...when 911 calls started coming in and the entire Nation was in a panic and the firefighters decided to finish their meal they had just prepared, prior leaving the station? Or they needed to wait for the President to interrupt their TV show to declare an emergency, before they decided to put on gear and head for the truck? Although, I'm the first to admit, this is not comparable to 9/11, but it's still dramatic to an individual. It's a life changing event. This example is only to place a person in this position of panic.

Losing the only thing we have left to keep our family together and focus on improving our lives for our children, is our homes. Next to a death of someone you love, comes your safety, security and shelter, all within your home. People who have fought with all their might to keep their home, credit and employment, don't deserve to watch their home go up in flames. They just need is a little water. They need it now, not when it's to late.

A very shallow person could not place themselves in the mind set of how it might possibly feel. We are real everyday people just like you, your parents, grandparents and siblings. Why would you delay a person in need? Saving and/or changing the life of a person is what makes you human. If you don't feel compassion to the level of doing your very best during this horrible time for them, than you don't need to directly service the public in any way.

[Maurice Bedard]

all true...............but the firefighter is in the position to make a snap decision to go for it and do what they are trained to do and whatever is necessary to save people's lives.

A loss mitigation rep...........has to go up the food chain to analysts, underwriters, managers, and finally the investor to get the final o.k. on a modification.................they are not able to approve anything at their level.

[chasepmt2hot-firefighter]

Very true...but in the time of feeling so lifeless, these people could try to give provide you the very best instead of some of the sloppy offers that you know darn well, were submitted just to be submitted. They need to restructure the entire process. This is serious to me and I expect not to be talked down to nor ignored. These people are also trained to save lives. It's all about the worker and their performance. What they contribute to their job, regardless of who they pass the file to next. The person holding your file is making the decision right then and right there.

[imupsidedownfl]

I created this thread back in March and never gave anyone an update on what has happened. That's basically because not much has until the last couple of days.

I completed the 3 Month forbearance of $1930/month for May, June, and July. After I completed the agreement I called every week with no update. I had a lady call me last week and ask for a couple more financial documents which I sent. Yesterday morning I received a modification offer via FedEx.

Here it is:

My modified principal balance is 326,079.00 (This includes any missed payments, etc)
They want to defer $76,900 of the principal and basically put in on the back of the loan which I would pay no interest on. However, if I sell or Refi they will want it.

So the principal balance I have to pay on is $249,179.00.
They want to make my mortgage a 40 year term starting October 1st.
For the first 5 years my interest is 2.0% making my payment around $1350 which includes escrow. It escalates 1% for years 6-8 at which point it goes to a fixed 5.15% for the life of the loan.

My payment before the modification was over $2500 so the payment looks good to me. The problem is I'm still upside down by $100,000+.

Is this offer in line with what others have received? Any opinions?

[rachel_p]

Wow, a real offer for a permanent modification. That is great news!

No other thoughts from me right now, just wanted to say congrats on actually getting the offer. I hope it all works out for you.

[EastCoaster]

I created this thread back in March and never gave anyone an update on what has happened. That's basically because not much has until the last couple of days.

I completed the 3 Month forbearance of $1930/month for May, June, and July. After I completed the agreement I called every week with no update. I had a lady call me last week and ask for a couple more financial documents which I sent. Yesterday morning I received a modification offer via FedEx.

Here it is:

My modified principal balance is 326,079.00 (This includes any missed payments, etc)
They want to defer $76,900 of the principal and basically put in on the back of the loan which I would pay no interest on. However, if I sell or Refi they will want it.

So the principal balance I have to pay on is $249,179.00.
They want to make my mortgage a 40 year term starting October 1st.
For the first 5 years my interest is 2.0% making my payment around $1350 which includes escrow. It escalates 1% for years 6-8 at which point it goes to a fixed 5.15% for the life of the loan.

My payment before the modification was over $2500 so the payment looks good to me. The problem is I'm still upside down by $100,000+.

Is this offer in line with what others have received? Any opinions?

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IMO that is a great deal.

I'd sign up for it in a NY minute.

It's percisely the restructuring I'm shooting for.

In a perfect world they would not have to stretch to 40 years but I'd still jump on it.

Thanks for posting.
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[art4ari]

WOW ongraturlations! its a great deal! I am working with your same numbers and I would beefit greatly from a mod like yours.

What is your DTI?
Did chase paid your taxes? How much you pay for taxes and insurance?
Are you employed or self employed?

[OH-WAMU]

Nice offer! Maybe things are starting to HAPPEN in Chase's hallways!

[imupsidedownfl]

art4ari,

1) For my forbearance agreement my payment ($1,930) was 34% of my monthly income.
2) As far as taxes, in my mod agreement it says I'm short $2,100. They give me the option of paying that amount over five years and in fact included that in my payment or paying it off right away which would lower the estimated $1350 payment by $60/month.
3) Employed

Let me know if you have any questions. I'll do whatever I can to help.

[art4ari]

Thanks! u are giving us great hopes!

I never heard of the option of paying taxes right away! You got a ballon payment. I wonder what determines to opt for one, obviously your DTI on trial payments covered more.

So your final modified payment is 23% of your income.! That is fantastic!

Did you run the NPV? if you did.. how close is it to your actual mod?

Thanks for your patience and help

[shade]

Interesting were you enrolled in the MHA plan or just a chase mod program? Very nice mod.

[Jillian118]

That sounds pretty cool. Us Chase/Wamu people havent seen much come down the pike lately so any info we can get from you is sooooo exciting...

so my questions.. Were you current? and do you know who your investor is???

[Do not want to lose it]

Wicked Good for You!!!!!
We are all jealous.

[imupsidedownfl]

art4ari, I actually didn't run the NPV

shade, I'm pretty sure that it is a MHA mod as they talk about how I will receive a small amount of money each month I pay on time that will be applied to principal. I left the papers at my office or I could get a little more specific, but I'm pretty certain it is MHA.

jillian118, I stopped paying my mortgage in February. I called and did a phone interview then sent in the hardship letter and other documentation they wanted. By the middle of April I had a forbearance agreement. I don't know the investor and they obviously won't tell me which I still don't really understand.

Anyway, I really had no idea that there were so many of you that haven't had a permanent offer. I feel lucky now to get it. This forum was so much help to me that I will answer or do anything I can to help. I know how frustrating the process can be.

[Reece1]

Hi,

I don't know if you're checking this thread, but if you are could you give us an idea of how you're credit was affected through this process?

[flyingpuppy99]

I can not say how it affected mine yet since I am filing for bankruptcy now on my credit cards. The Mod helped me but then my husband became disabled and is now unable to work. My house payment only takes one and part of the other pay check instead of both. But I do not make enough to pay the house, utilities, car payment and the Credit cards. I tried working out a payment plan with the credit cards but they would hear nothing of it. They wanted way more then I could affrod to pay while we wait to hear on the social security. I gave them a detailed plan to pay them back in full. You think with all the bankruptcys going on right now they would work with people who were showing they wanted to pay.