Home Affordable Modification on 40 yr mortgage and navigating Chase

[gordilox86]

AZ,

The Trial Period Plan doesn't actually "kick in" according to guidance until form 3156 is signed by Chase.

How to get form 3156 signed by Chase:

1) Read the Chase cover letter that came with the Trial Period Plan carefully (notice this cover letter is probably not actually signed by Chase. There is a reason for this).

2) Write your own cover letter addressed to Chase (I addressed mine to Attn: HAD, 3415 Vision Drive, Columbus OH, 43219). My letter went something like this:

Pursuant to the Home Affordable Trial Period Plan ("the Plan") I have enclosed two signed notarized original copies of the Home Affordable Trial Period Plan (form 3156) along with a cashier's check payable to Chase Home Finance in the amount of $_______. Please apply the amount enclosed of $___________ towards my 1st Trial Period Plan payment per Item 2 of the Plan, due September 1, 2009, then sign and send a fully executed copy of the Plan to me at: (your address). If you should have any questions or concerns regarding this or any other matter, please do not hesitate to contact me. (signed)

Be sure to put your name address, phone number, property address, loan number and date on your cover letter.

3) Send your cover letter, 2 notarized copies of form 3156 and the cashiers check to Chase at the address mentioned within Chase cover letter. Make sure you send this package via fed-ex so you can track the delivery.

4) Keep a copy of the entire package including the cashier's check and the fed-ex delivery confirmation.

Hint: If you send the package August 24rth, it will not be processed into Chase system until August 31st. The payment must be processed by Chase by the 30th of the month.

Hint:There is no need to return the Chase coverletter back to Chase with your Trial Period Plan package especially for those of you who are current when you entering the Trial Period Plan.

5) On September 1st, call Chase Homeowner Assistance center (877) 419-6492 for the sole purpose to verify your payment was processed to Chase system by August 30th. The individuals you may speak to at Chase Homeowner Assistance don't know anything, so I just use them to get information from the system.

6) Wait 2 weeks then call Executive Resolution Team (312) 732-6153. Tell the Executive Resolution Team Chase is not following the guidelines. Tell them you sent your Trial Period Plan to Chase however, Chase has not returned a signed copy to you as specified within the Trial Period Plan and in the guidelines. Demand a copy of the signed Trial Period Plan (form 3156) be faxed directly to you.

Please be curtious to everyone you speak with as everyone is totally overwhelmed and purposefully kept unknowledgeable.

[snapple candy]

Gordio,
Thanks for the info. I still have not got back my signed copy from Chase and just made the 3rd Trial Payment. I think I may have posted back in June how the Fannie Mae Negotiator at Chase told me they had the "signed" copies to customers "on-hold".
I dont believe it for a second. I did file a complaint with TARP about it and they sent me back an email Thank you for your complaint, blah blah blah. Havent had any follow up since.
I will call Exec Resolution as you have suggested and see what happens.

[gordilox86]

Freddie Mac "Trial Period Plan FAQ's" and “Bulletin 2009-19” state that Servicer shall send permanent modification agreement to borrowers in order for borrower to have enough time to receive and process and pay the 4rth payment by the 1st of the month following the 3^rd Trial Period month, which in my case is (September 1, 2009). I've been told by 3 individuals at Chase, the Servicer has no intention of following this guidance. Instead underwriting will not look at any Trial Period Plan file until the monthh following the 3rd Trial Period month, regardless of whether the 3rd Trial Period Payment was made timely. According to Chase Executive Resolution Group, the underwriting department will start processing the Trial Period Plans for permanent modification during the first few weeks of the 4rth month. Chase plans to back date the permanent Loan Modification agreements to the 1^st day of the 4rth month, for those borrowers who made their 3^rd Trial Period Plan payment timely.

[gordilox86]

Everyone,

If your loan is owned by Freddie Mac or Fannie Mae you absolutely have to watch this video. Almost all your questions will be answered. https://freddiemactraining.webex.com...ingID=34405247

[gordilox86]

Snapple,

Call James Dimon, Executive Assistant, Gloria Marshal Figueroa (Chicago Office) (312) 732-6153. Tell her you have spoke to your attorney and you want to make one more good faith attempt at obtaining a signed Trial Period Plan before you file your motion.

[snapple candy]

Gordio,
I started watching this and it looks great! Nothing like knowing more than your negotiator to help you get the answers. I will go watch in entirety at another time. Dont have 1 hour to watch.

Ya know I left message at the number your posted and waiting a call back about the signed from #3156. It states right in the trial mod contract, you are supposed to get the contract back signed by the lender otherwise it isnt considered "executed".
I did call around to various dept asking what was the status of my perm. modification. I am told they will fed ex me a packet to get updated information/financials so they can proceed with perm. modification. When I inquired about when to make the next payment and time line for completion, as with others I was advised to make a 4th payment if I do not have the perm mod finalized. When I pressed her, I was told that it was "suggested" to pay in an effort to bring down the total balance due. Right like the 25K you just tacked on will make a difference if I make a 1100 payment? I also requested thru customer service an "audit" or transaction history of the loan that lists all the payments, delinquencies and late fees. If and when I agree to a perm mod, I want to see how and why they are charging for late fees, etc. I suggest others do the same.

[snapple candy]

Thanks Gordio,
I did leave a message for Gloria. I also let her know I had filed a TARP complaint about it. I'll keep trying to get an answer and let you know what I find out.

[snapple candy]

Gordio,
I also left message for a guy named Stephen whom Gloria had as a referral number on her line. I just got a phone call from my original loan mod person whom he emailed after receiving my message. She said, yes I see the contract on the system and will fax it to you right away. Well I got the fax.....it even has my original sticky note on it that asks for it to be faxed to me once signed by Chase. She faxed me the contract UNSIGNED! I am speechless! I called her and faxed her back to send me it signed. If I dont hear back from her, I will Exec office again. Why does this have to be so difficult?

[gordilox86]

Snapple,

Make sure you watch video before submittal of updated Financial documents!

Call it a hunch but I bet you 100 to 1 a fed-ex packet from Chase requesting updated documents does not arrive on your doorstep...

You don't have to wait for Chase to submit your financial documents. However, you should watch the video to undertand how the information you submit will impact your end result (permanent modification).

Step - 1 Visit www.chase.com/https://www.chase.com/ccpmweb/chf/document/Borrowers_Assistance_Form_Chase_2009.pdf

Step - 2 Complete the Homeowner's Information Packet again. (yes again). This time only include 2 paycheck stubs, 1 month Complete Bank Statement, Complete Financial Information Form, and Completed Hardship Affidavit. (these instructions only apply to Wager Earners, follow Self Employed instructions on "Homeowners Information Packet" for Self Employed).

Mark all other items N/A on page 2 of the Homeowner's Information Packet, unles something else has changed and this change will help your case.

IMPORTANT: Snapple please read this carefully as it is very important. When the underwriter calls you for actual modification, Chase will take a "waterfall" approach towards the modification. Today I learned Chase will not be applying this waterfall approach correctly on purpose. Unless you understand the waterfall approach and its affect on your loan, you may get less than the government had planned for all this hassle. If you sign/send the final modification agreement to Chase without double checking how Chase applied the waterfall in your case, you will get much less from the HAMP program and all this hassle.

The 6 step waterfall approach works like this:

"Servicers will follow the sequential process in the order specified below only to the extent necessary to achieve the Target Payment:

1. Capitalize arrearages.
2. Reduce the interest rate in decrements of 0.125 percent to no lower than 2.0 percent (using the remaining term to maturity). If the modified interest rate is below the interest rate cap, the modified interest rate will remain fixed for five years. Beginning in the sixth year, the modified interest rate will be subject to annual increases of no more than 1 percent per year until it reaches the interest rate cap. The interest rate cap is the Freddie Mac Weekly Primary Mortgage Market Survey Rate for a 30-year fixed-rate conforming mortgages, rounded to the nearest one-eighth of apercent (0.125%), as of the date that the Modification Agreement is prepared.
3. Extend the amortization term month-by-month up to 480 months from the modification date.
4. Forebear principal in $100 amounts. Deferred principal will not be subject to interest and requires an additional
balloon payment due upon sale, payoff or maturity. Deferred principal will be non-interest bearing and nonamortizing.
5. Run the proposed modification terms through the NPV Calculator. If the Servicer obtains an NPV negative result
and the modification terms include deferral of principal, the borrower is eligible for a modification provided the
interest-bearing principal is not less than 100 percent MTM LTV, including capitalized amounts. If the Servicer
obtains a NPV positive result, the borrower is eligible for a modification regardless of the MTM LTV ratio.
6. If the Target Payment cannot be achieved, then the borrower does not qualify for this program. If the Servicer is
unable to offer the borrower a different alternative to foreclosure, the Servicer must then refer the mortgage to

Freddie Mac for further review.

Today I learned Chase is planning to run the actual modification by first modifying term of loan in lieu of interest rate. In otherwords complete step 3 before step 2 above. I believe Chase thought process is that borrowers will be so excited to actually receive the final modification they will just accept the modified payment and walk away with much less from the program than they should have received. Please don't let this happen to you. WATCH THE VIDEO and pay particular attention to the waterfall approach section. Recalculate your payments before the underwriter calls you so you can speak knowledgeably to him/her. If you don't know how to use a financial calculator, talk to your CPA and ask them with help calculating your new mortgage payment under these guidelines.

[gordilox86]

Snapple,

Also, I forgot to tell you. After you fax the updated Homeowner's Information Packet to 866-282-5682 wait three days for imaging, then call the Homeowner Assistance Center at 877-419-6492. Ask the Homeowner Assistance Analyst if the updated financial information has been imaged. If so, ask what the next step is.

At this point, the Homeowner Assistance Analyst will flag your file for Chase underwriter to review.

Once you receive a signed Trial Period Plan and you have that issue squared away, you will receive a call from an underwriter. You must be prepared like a boyscout for this call.

Don't worry you and I are almost there. Let me know if you need help. I will try to stay consistent posting over the next couple weeks.

Good luck.

[azdmsmith]

Gordi,
The way you explained the way the steps SHOULD happen fits with exactly what I was told regarding the final mod when I was approved for my trial period. Although I don't have anything in writing and we ALL know the infamous Chase bait-and-switch routine, I was told that my interest rate would be 2% on the final mod and the interesting part was, as you explained, the term of the loan (# of months) was an odd #. They did start with the mod date as the first payment, and calculated the number of payments as an odd amount (not an even 360 or 480) it was like 30-something years and a few months. I think a big red flag for the scenario you pointed out would be if they give you loan terms of an even 30 or 40 years. It is not likely that the numbers come out perfectly even so they are pulling something fishy if they give you those kind of terms. Thanks for the heads up.

[gordilox86]

AZ,

What I was trying to say above is, if Chase extends the loan term to 40 years before reducing the interest rate then Chase would may be able to meet the target payment without having to drastically reduce the loans interest rate. This scenario would be ideal for Chase and Freddie Mac because you walk away with a 40 year loan. I learned today that this is exactly how Chase plans to handle people unless they speak up and know their guidelines.

The guidance states the Servicer must first reduce the rate down to 2% before looking towards a term extension as a means of acheiving the target payment. This scenario would be ideal for the borrower, because you walk away with a shorter term and a lower rate which was the HAMP forfathers objective.

Either way, under HAMP the best case scenario would be to keep loan term the same with a permanent modification to a 2% rate fixed for 5 years, which will increase 1% per year until rate reaches 5.22% where it will stay fixed for the life of the loan.

You can pay down alot of principle in 5 - 7 years with a 2% rate.

[Marie T]

Azdmsmith...thanks for the BBB info - do you think that helped your case? I would be thrilled to get a 2% for five years....it would still be tight but I have done the math and we could make that payment.

Is there anything else I should be doing? I saw a really good post on here awhile back showing where someone had contacted a multitude of agencies and Chase/WAMU people, and of course, I cannot find that post now!

[cliffdweller]

Hello Gordilox,
A really big thank you to you for taking the time to post all of this.
I really appreciate it.

Maybe you could set me straight. I have never understood the big deal
about a PITI loan....particularly in these tough economic times. I would rather
have the flexibility of an interest only payment, and if I get some extra cash,
GREAT - I will throw it at the principal...but why be locked in?

To be clear, I am not in the MHA plan - have a WaMu (or whomever) owned
loan...not Freddie or Fannie. I don't know if they will offer interest only, but
at this point, that is my preference. Am I crazy?

Thanks again...very generous of you to help out in this way.

[Marie T]

Hi Cliffdweller -

From what I have been told by the folks at Chase Homeownership Center, CHASE will only do a modification that includes paying off principal. Since they have been wrong about other things, maybe they are wrong on this too.

[cliffdweller]

Hi Marie,
Yeah - I suspect this may be the case.

A home just isn't that good of an investment these days - would rather invest
in myself and my own earning ability, or a stock or two that are doing well right
now.

[azdmsmith]

Marie
I believe that contacting the BBB is THE thing that got my file moving. The first response that Chase sent to my complaint was that I did not qualify. I then had the opportunity to respond again and used the guidelines to show that the reasons they provided to the BBB for my not qualifying were bogus. If nothing else the complaint forced someone to do some research and respond in writing to why my app was denied. It appears that Chase is a least somewhat concerned about having unresolved BBB complaints on thier record.

Also complain to Fannie Mae and/or Freddie Mac if that is applicable. It is my understanding that Freddie Mac will be responsible for ensuring the guidelines are followed and developing a “second look” process for apps that are rejected by all servicers regardless of the investor, so if it were me I would write a complaint to them even though they are not my investor.
Also:
1. The OCC online at http://www.occ.treas.gov/ or at:
Office of the Comptroller of Currency
Customer Assistance Group
1301 McKinney St, Ste 3450
Houston, AZ 77010-9050
2. Although they will just reply with a generic response, if your complaint involves fraud, waste, abuse, mismanagement, or misrepresentations (any of that sound familiar to anyone here?), complain to SIGTARP at www.SIGTARP.gov or at:
Office of the Special Inspector General for the Troubled Asset Relief Program
1500 Pennsylvania Ave, NW Ste 1064
Washsington, D.C. 20220
877-SIG-2009
3. The Congressional Oversight Panel at http://cop.senate.gov.contact
732 North Capitol St. NW
Rooms C-320 and C-617
Mailstop: COP
Washington, D.C. 20401

Gordi,
It is my understanding that the difference between the trial period payments and regular payment will be (or I guess I should say SHOULD be) added to the loan balance and the number of months due will then be calculated based on the quoted interest rate. Thank you for helping us be aware of the issue with Chase attemepting to modify terms before interest rate in contrast to the guidelines.

[Marie T]

Azdmsmith - Thank you so much for this info! I have already sent (emailed) a letter to my Congressman today. Do you have the email of Chase Executive Team? It is probably almost 5 p.m. there so maybe too late today anyway.

Cliffdweller - I agree, not a good investment. Not sure that anything is right now. Oh well...

Gordilox - the info you posted looks great but that only applies to those who have FannieMae or FreddieMac backed loans, right? Mine is (supposedly) owned by WAMU.

[determined1]

Question? Chase has my trial period payment at $1,529 per mo. Now if I take the balance that I owe now and 1st apply the 2% rate and then extend the term to 40yrs, that results in a PI payment of $1,480. I have taxes (once reduced), flood & property insurance that total around $418 per mo. So if this is supposed to be a PITI payment they are a little off unless they plan on forebearing about $100k in principal.

Should I worry about this now. I haven't seent anyone get a principal forebearance from Chase here. Is this a setup just to be declined at the end of the trial period. Anyone ask for & receive a PITI breakdown for the trial?

[art4ari]

I got my trial exactly at 31% of income and according to chase, it includes tax and insurance only. if this amount doesnt cover the loan at 2%/40year, they may deny you, that is what I understand. I also want to know for sure what the magical numbers are...good luck

What are the details of your situation? when did you start the trials? what docs they asked for?

[Lainy09]

I got my trial exactly at 31% of income and according to chase, it includes tax and insurance only. if this amount doesnt cover the loan at 2%/40year, they may deny you.

That is exactly what happened to us--only they "denied" us before we ever got far enough to be on a trial, they ran the #'s and it just didn't work out in 40 yrs to cover what was owed. We are now on a regular Chase repayment plan for a 3 month trial, and then in the meantime can apply for a mod with them...

[azdmsmith]

You can google Excel adjustable rate mortgage calculator and download a spreadsheet that works pretty well. For HAMP, plug in that the rate remains fixed for 5 years then increases 1% every 12 months up to the cap. I then adjusted the term to get the P&I payment close to my trial payment less taxes and insurance. I think that will give a reasonable estimate of the term. If a 40 year term doesn't get your payment to 31% when you add in T & I, you may have a problem at least with regard to HAMP?

I sent in my trial payment docs with a cover letter as Gordilox suggested, we'll see what happens next.

[art4ari]

Originally Posted by Lainy09

I got my trial exactly at 31% of income and according to chase, it includes tax and insurance only. if this amount doesnt cover the loan at 2%/40year, they may deny you.

That is exactly what happened to us--only they "denied" us before we ever got far enough to be on a trial, they ran the #'s and it just didn't work out in 40 yrs to cover what was owed. We are now on a regular Chase repayment plan for a 3 month trial, and then in the meantime can apply for a mod with them...

That may happen to me because I have too much surplus (1560.00) My application was filled out by a chase center rep and he did not include second property expenses. I may have to reapply.

How did your repayment plan works, did they offered to you? where are you on the modification? I would like your advise and guidance if you dont mind please... thanks.

[gordilox86]

All of my posts relate only to the HAMP program for a Freddie Mac owned/guaranteed loan.

To determine if your loan is owned by Freddie Mac please visit https://ww3.freddiemac.com/corporate/.

The information I've posted would be relevant to HAMP program for Fannie Mae owned/guaranteed loans, as the guidelines are almost identical.

[gordilox86]

Determined,

To derive the original Trial Period Payment, the Homeowner Assistance Analyst multiplied 31% by your gross income to come up with $1,529. The $1,529 is called the "Target Payment" under the guidelines, because the Servicers underwriter must Target this payment during the final modification.

For the final modification, the underwriter must first lower the interest rate in small increments until the rate reaches 2%. If lowering the interest rate to 2% does not reduce your monthly payment to $1,529, the Target Payment, then the underwriter would extend the term of the loan until the Target Payment is acheived.

Applying this logic, and assuming what you've stated is correct, you should expect a permanent modification with a monthly payment of $1,529, interst rate of 2% (fixed for 5 years, then adjustable by 1% per year until rate reaches 5.22% where it will stay fixed for life of loan), loan term of much less than 40 years.

The underwriter may want to first extend your loan term to 40 years, then give you a higher interest rate to acheive the target payment of $1,529. Of course, if you read the Freddie Mac guidelines, this scenario violates the sequential watterfall approach. Don't let your underwriter dupe you into increasing the term of the loan before looking first at the interest rate.