Denied Chase Modification-Help Please

[mahendral]

I had applied to modify my loan under the Making Homes Affordable plan. After 4 months of waiting, today I found out during my weekly call that I have been denied. The reasons they gave me are :

1) My monthly loan payment (includive of taxes,interest,etc) to income ratio is 37.3%. They are telling me that Fannie Mae(who owns the loan) only allows modifications for less than 37%.

My comment: This is sheer BS. I thought the whole idea is to refinance so that the payment is brought down close to 31%

2) Too high cash reserves

My comment : I have 6K in my checking account. That is like one month emergency reserve.

I feel both the above reasons are invalid.

Has anyone else got similar reasons for denial ?

Any advice on what I can do ?

[Moe Bedard]

Glad you joined our cause!

Yes, a lot of homeowners are experiencing this. Let me guess, you are not yet late?

[mahendral]

Hi Moe- Correct, I am still current on my payments. Its really frustrating. Just feeling helpless.

[Moe Bedard]

Hello!

I thought so. This seems to be the common denominator between everyone that has been denied. My very good guess is that unless you kick, claw and scream, that you will not be able to get a loan modification until you are late. Only a few members have obtained one before they were late.

You may have to make a choice sooner or later, your credit or your sanity/welfare?

[azdmsmith]

I was denied many times over a 5 month period before finally being told I was approved and placed on a trial period (still don't have paperwork yet though).

I had to educate Chase many, many times including actually emailing them the FannieMae Servicing Guide 09-05R and pointing out where their actions and decisions violated guidlelines.

They did bring my payment, including taxes, HOA dues, and insurance to 31% of my gross income (although I had to argue about what they included in my gross income and refer them to the guidelines).

I am current and stayed current throughout most of the process except at one point when I went 14 days late. That was a HUGE mistake for me because I had the funds to make the payment in my account but was only going late to see if that would help the mod process. It backfired because then my cash reserves were too high. FannieMae guidelines for cash reserves for current borrowers (those who fall in imminent default category) are no more than 3 months of your mortgage payment. If your balance is more than the equivalent of 3 months of mortgage payments I would suggest you bring your balance down and reapply. The 37% thing is BS, the guidelines are clear on the 31%.

Write Jamie Dimon, call the executive team, and file a Better Business Bureau complaint for their lack of customer service and failure to follow published guidelines. I really believe it was my BBB complaint that finally got things moving. You can also file a complaint online with the federal Office of the Comptroller of Currency for their failure to follow guidelines. Good luck.

[mahendral]

Thanks very much azdsmith. Your reply gave me hope. What I did is I re-faxed my bank statement showing a balance of about $4800 which it was before anyways. This is barely one months of cash reserves in my case. I called Chase again. Fortunately I got someone sympathetic to my plight. She said she has submitted my file for review again to the underwriter.

About the 37% rule, she didnt say anything about it. I told her that there are no such guidlines from Fannie Mae after talking to the rep there.

Hoping for the best.

[lsmith12]

Do you have any concerns about how the credit reporting will be handled during the trial modificaion? Did you get anything in writing on this. One member said that they reported 90 days late because they called it a forebearance and she was current before this.