Chase Application Questions

[kgeriak]

I am filling out the Chase application and am wondering if it would be better to show little money left over per month or alot more. I don't want to look destitute but I don't want to look like have $1000 left over per month. Any advice?

[kgeriak]

Another Quick Question if any one knows. I went and looked up my house value on chase.com and on zillow.com and they both state 416,000 and 406,600 respectively. My mortgage is for $400000. Is this a good thing or not? The value has fallen almost $200000. YIKES!

[MAXIE19]

For purposes of a modification, the less your property value as compared to your unpaid principal balance, the better. If your mortgage balance is $400,000, it is better that your home value be as close to that amount or even less as it tells the bank that it is more profitable to modify than to foreclose as they stand to lose so much more on their investment by foreclosing. Also, read somewhere that the banks do not want you having more than 25% equity for purposes of a loan mod.

[kgeriak]

Thank you for answering me - I really appreciate it. The low price may help us in the final analysis. I am writing up my hardship letter today and adding to my package - I am self employed and the total pages so far are over 175 - hate to fax that much but will. I will add that our house has declined in value according to zillow and chase and also add the fact that clients are paying in 60-90 days instead of the usual 30. Delay and less work is the main reason for the request for a modification. May take another year or two to get back where I was financially as a company. Any other ideas you would have for my hardship letter would be appreciated. Thanks.

[Hard Times]

Kgerick..............Thanks for the information about chase and zillow. I checked and found that Zillow is not current in its value, wheras Chase gives a more realistic figure which is 150k less than Zillow's. The Chase figure is an amount which I may be able to get currently for my home. I am amazed at how much the value has dropped from 3 years ago!

Based on Maxie's comments, I am in good shape from these points. No equity and current home value about $200k less than Chase's estimate.

Do you think Chase relies on its own estimate in the calculation when it goes to Underwriting? At what point do they send an appraiser out for an updated estimate of the current market value of the house? Do they ever request to come inside? Or, do they issue trial HAP mods without getting a new appraisal?

Kgerick....on your very first question about "showing money left over each month", I think you just need to be honest about all that.

[caldwellb02]

Hard Times - How do you find out what Chase thinks your home is worth?

[kgeriak]

On the Chase.com site there is a link

https://mortgage.chase.com/pages/oth..._estimator.jsp

That should help.

[Hard Times]

Kgeriak........Any comments on my questions in my prior post?

1. Do you think Chase relies on its own estimate in the calculation when it goes to Underwriting?

2. At what point do they send an appraiser out for an updated estimate of the current market value of the house? Do they ever request to come inside? Or, do they issue trial HAP mods without getting a new appraisal?

Can anyone else answer?

[caldwellb02]

Kgeriak - thanks. yikes. My home has gone down $20,000 in the past three months. (I had a property reassessment in April). You would think that would be more motivation for the banks, since my second loan, as I understand it, would be now fully unsecured (the house is worth less than my first mortgage!). Wow.

[MAXIE19]

Kgeriak:

My husband and I are also self employed and submitted over 200 pages worth of documentation to Chase. If I were in your shoes, I would try not to be too firm about the temporary nature of your hardship by telling them that you expect to recover within a year or two. Remember, the goal here is to get a permanent modification and if the bank thinks that your hardship is temporary, they would string you along, then deny you after several months have passed hoping that your finances would have been better by then. I was denied twice initially for insufficient income and I am on my third submission with the executive team. I supplemented my most recent re-submission by adding my husband's income and expenses (per their request even though he is not on the loan). It increased our adjusted gross income by about $1500. I also submitted two modification proposals using the NPV test and rates of 3% and 3.25% to show that a modification would be more beneficial than a foreclosure. I also submitted home value estimates on my home from Zillow, Chase and Cyberhomes (BOA) all showing that our home is worth about 100K less than our unpaid principal balance and about 500-600K from what we paid for it a few years ago. I also included about six comparables in my neighborhood showing that homes were selling for about 700-800K less than their original price.

In my hardship letter, I drew attention to the reduction in income from 2007 to 2008 and continuing to 2009. I also drew attention to the fact that we have had to sometimes rely on our credit cards to pay our mortgage as well as the fact that my husband has had to sacrifice his own personal bills in other to ensure that we are current on our mortgage (easily verifiable due to my husband's less than stellar credit).

We are now waiting to hear back from Chase.

[kgeriak]

Originally Posted by Hard Times

Kgeriak........Any comments on my questions in my prior post?

1. Do you think Chase relies on its own estimate in the calculation when it goes to Underwriting?

2. At what point do they send an appraiser out for an updated estimate of the current market value of the house? Do they ever request to come inside? Or, do they issue trial HAP mods without getting a new appraisal?

Can anyone else answer?

I have no idea if Chase does relay on their estimates but I did see other posts on this site that said they did so maybe. Sorry not more definite then that.

As for appraisers I have never gotten that far so have no insight into the answer - maybe someonelse in the forum can answer.

[kgeriak]

Originally Posted by MAXIE19

Kgeriak:

My husband and I are also self employed and submitted over 200 pages worth of documentation to Chase. If I were in your shoes, I would try not to be too firm about the temporary nature of your hardship by telling them that you expect to recover within a year or two. Remember, the goal here is to get a permanent modification and if the bank thinks that your hardship is temporary, they would string you along, then deny you after several months have passed hoping that your finances would have been better by then. I was denied twice initially for insufficient income and I am on my third submission with the executive team. I supplemented my most recent re-submission by adding my husband's income and expenses (per their request even though he is not on the loan). It increased our adjusted gross income by about $1500. I also submitted two modification proposals using the NPV test and rates of 3% and 3.25% to show that a modification would be more beneficial than a foreclosure. I also submitted home value estimates on my home from Zillow, Chase and Cyberhomes (BOA) all showing that our home is worth about 100K less than our unpaid principal balance and about 500-600K from what we paid for it a few years ago. I also included about six comparables in my neighborhood showing that homes were selling for about 700-800K less than their original price.

In my hardship letter, I drew attention to the reduction in income from 2007 to 2008 and continuing to 2009. I also drew attention to the fact that we have had to sometimes rely on our credit cards to pay our mortgage as well as the fact that my husband has had to sacrifice his own personal bills in other to ensure that we are current on our mortgage (easily verifiable due to my husband's less than stellar credit).

We are now waiting to hear back from Chase.

Maxie:
I put the npv test below. The form says PASS but I do not know what NPV value to quote in my hardship letter? What numbers below would I put in my letter?

Alter Highlighted Terms for Interactive NPV Analysis
			Present Value of Modification
Program Parameters
			Affordable DTI level	31%
Current Freddie rate	5.4%		Modified Payment	$1,483.31
Program interest rate floor	3.0%		Interest Rate at 30 Year Term	1.6%
			Interest Rate with 40 Year Term	3.1%
Loan origination information and current status
Original Loan Amount	$389,000	Borrower and loan information	Modified Loan Terms Required to Achieve Modified Payment
Original Amortization Term	360		UPB adjusted for Accrued Interest and Escrow	$399,651
Original Interest Rate	6.750%		Modified Rate	3.06%
Interest only loan (Y/N)	Y		Modified Payment	$1,483.31
Current UPB	$397,745		Modified Loan Term	456
Current Rate	5.750%		Modified Full Am Payment	$1,483.31
Remaining Term	336		Difference from Affordable Payment	$0.00
Months past due	-		Principal Forbearance	$0.00
Property state	CT		PV Reduced Cash Flow	($43,836.92)
Advances/Escrow	$0
Current Monthly Mortgage Payment	$1,905.86	Calculates P&I or IO payment based on original loan terms, user may adjust this field.	Valuation Given Redefault After Modification
Current Interest Payment	$2,188.13		Redefault Rate	40%
Current Principal Payment	($282.27)		Months to Redefault	3
Past Due Interest	$1,906		Home Price Appreciation Forecast (from current date)	-4%
UPB Adjusted for Accrued Interest and Escrow	$399,651		Future Interest and Advanced Escrow	$ 20,989
			REO Value	$ 286,853
Borrower status			PV Estimated Loss	($103,990)
Monthly Income*	$7,000
Monthly Taxes and Insurance	$687		Value of Modification
			Modification Value	($67,898)
Foreclosure Scenario			Benefit from Modification	$24,057.33
UPB Adjusted for Accrued Interest and Escrow	$399,651		NPV Test (Pass/Fail)	Pass
Current Value	$416,000
Home Price Appreciation Forecast	-5%	Assumptions specific to the property location. User must supply these inputs.	Modification Terms
REO Stigma Discount	20%		% Difference from Original Payment	-22.2%
Months to Foreclosure Sale	6		Borrower Payment after months:
Months to REO sale	7		1	$1,483.31
Foreclosure & REO Disposition Costs	$11,646		60	$1,695.16
Future Interest and Advanced Escrow	$19,206		72	$1,915.97
REO Value	$285,308		84	$1,992.53
Zero Cure PV Loss	($108,183)		96	$1,992.53
Cure Rate	15%	Assumption specific to the loan and borrower. User must supply this input.	108	$1,992.53

[Hard Times]

Maxie......Wow, I am impressed with the homework you did for your mod. Where can I find the link to go to this NPV test? I searched and searched to try to find a NPV test that the banks may be using, but could not find it....seemed it was a guarded secret. Can you give me a link so I can try this NPV test?
I would greatly appreciat it.

[Hard Times]

Kgerick........Thanks for answering my prior questions. I would imagine Chase would use their values to plug into the NPV test.....I hope so.

Kgerick.....Can you provide the link for this NPV test so I can see how I stand? I asked Maxie, but Maxie may not be online for awhile?

[MAXIE19]

Kgeriak:

Submit the results of the entire test. In your hardship letter, let them know that based on the results of your enclosed NPV test calculations, a modification would be mutually beneficial to both parties and that you are seeking a modified payment of $1483.31 at an interest rate of 3.06% at a modified loan term of 456 months.

[MAXIE19]

Hard Times:

Sorry just got in. Here is the link for the NPV test.

FDIC: FDIC Loan Modification Program Guide – "Mod in a Box"

[Hard Times]

Maxie.......As Captian Kurk would say to scottie, "Your a miracle worker". The govt. should hire you as the new "Mod Czar", and you could crack the whip and make these banks getty-up with these mods.

Going now to the npv link you gave.....many thanks.

[kgeriak]

Do you mean give them a copy of the results like I posted here? I am sending the package in the morning via UPS overnight. I have the address and it is too hard to fax 205 pages - my fax machine keeps quitting on me.

[Hard Times]

Maxie......I tried to use the NPV test....from the website you gave me. Thanks.

Some parts of the spreadsheet are a bit hard to know what to plug in. I assume we should chang the 3% to 2% in cell B6 and also in cell E11?

I used the chase appraised value, and came up with a "Pass" on this NPV test......with a "Benefit from Mod" (cell E29) of about $80,000. You think this is a good range? (As long as we gat a "pass", then this is good for us trying to get a mod, right?)

[Liz Medrano]

Looks like you passed with flying colors $80,000 benefit is good for you. When I did the same test, my benefit is around $40,000.

[MAXIE19]

Kgeriak:

Yes, enclose the results of your NPV test with your package to argue that a modification is more beneficial in your case than foreclosure. Give it about a week or two and go one step further and call the executive team to escalate your file. Hopefully, this will save you the 4 months of waiting that most of us who sumitted in March/April had to endure.

Hard Times:

$80,000 benefit from a mod is good. Bear in mind that we do not know what variables Chase is using but hopefully the FDIC model is close.

[Hard Times]

Kjerick......I just spent some time doing my NPV test, then I looked at yours. I think you made a few mistakes:

I wil list these in a few minutes after I have time to write it up for you.

LIZ.....I did mine again, and it shows a pass with a benefit of 30k.

[Liz Medrano]

That is still good...I have put many different scenarios to see how it comes out...no matter what I put I pass. Like Maxie19 said we don't know what variables they are using...but you have plenty of room. I think as long as you are upside down on your house, it is beneficial for the bank to do a mod. People that have equity are the ones getting denied-it is more beneficial for the bank to do a foreclosure.

[Hard Times]

Kejerick.....Possible mistakes on your NPV tst:

1. May want to change program % rate floor to 2%.
2. Your Current Unpaid Bal is MORE than your initial mortgage?
3. Your current Mthly Pmt must be wrong....how can your mthly interest be more than that?
4. Heres the BIG mistake....Your current value of 416,000 must be way too high. Did you check the current appraised value at the chase website? Original loan amt was 389k, so didnt your home go down in value?

But you still passed with your computations......this spreadsheet is a bit confusing, so alot of mistakes can easily be made on it.

good luck...."All for one, and one for all".

Chase's slogan would be "All for me, and even more for me!"

[Hard Times]

Liz....Thanks again for passing this NPV test to me. I am expecting a call any day from Underwriting. So, now if they say something about their NPV test showing me a "negative" and therfore rejecting me, I will have something solid to protest with.