Home Affordable Modification on 40 yr mortgage and navigating Chase

[azdmsmith]

Due to a divorce, I refinanced my home in Nov 2008. At the time I had about 100,000 in equity after buying out my former husband. With the Arizona market continuing to fall I now have probably $30-40K in equity. In order to make the payment as affordable as possible I took out a 40 year mortgage. The payment is about 37% of my income. My only other debt is a car payment but as a single mom of two teenagers my budget is still very tight although I have been making the payments on time.
I have been with the same government employer for 15 years so I felt taking on the large payment was a safe risk. However, when the state budget crisis hit, I was forced to take unpaid furloughs which have decreased my monthly pay by $600 and my payment is now 41% of my incomeafter taking on a on a second part time job.
I am absolutely thrilled with the prospect of assistance that the Homeowner Affordable Modification Plan seems to offer. I have confirmed that Fannie Mae owns my loan that is serviced by Chase. I have read extensively about it and feel like I have a pretty good understanding of how it works. However there is one gray area. As I understand it, if I meet the qualifications, my interest rate could be lowered to as much as 2% to get my payment down to 31% of my gross income. If that interest rate didn’t get me to 31% my loan term would then be extended to 40 years. I can’t find any info about how this would work if my loan is already at 40 years and I am above 31%, but I’d like to think that I’ve demonstrated that I have done everything I could possibly do including the second job and extended term to try and make the loan affordable on my own. I could get down to the 31% on my existing 40 yr loan if the interest was dropped to about 3%.

On March 5, I faxed the Borrower’s Assistance Form from Chase’s website and all the required documentation to the number on the form. I tried to follow up this week to confirm receipt and was transferred all over Chase. One person said they were transferring me to someone who would accept the application over the phone. That wasn’t the case. I ended up with someone who said they could not even verify receipt of the documents because the fax number they provide sends the documents to a 3^rd party rather than Chase. He also said that it would take at least 30 days before I hear anything. I’m sure they are swamped and under the circumstances I supposed that is a reasonable timeframe, but I hate for someone to say at some point that they never received my paperwork so I’d feel much better if I could at least verify they have it and will begin working on it (I do have my fax receipt so I know it got there).
So that’s my really long story to get to 2 questions:
· Has anyone been able to find any information on how a mod would work under the federal plan if the loan is already at 40 years?
· Has anyone applied for a federal Homeowner Affordable Modification through Chase and been able to verify the process and that documents were received/accepted?

[HopingtoFind]

azdmsmith... welcome...

According to new federal plan they would extend loan to 40 years in order to get to 31% of Gross income... you said that if they lower your rate to 3% you would get to 31%... so then in your case they wouldn't need to extend your loan term.. they just need to lower your interest rate.

[danoo]

What's with using 31% of gross income? If you have kids and a non working spouse you probably can't afford 31%, I can't.

[whatsinaname]

I pray they will reduce mine to 31%. I wish it was 31% of net income rather than gross because it will still be fairly high for some.

Sad thing is they are not reducing the outstanding mortgage balances due to the decline in real estate prices

[azdmsmith]

Fortunately I have no debt other than my car and home so I would be thrilled to get to 31%, even of my gross income.

My first call to Chase in early March got transferred all over the place and no one seemed to know what was happening with modification under the Obama plan. *** posted a number in another thread that I had not seen before, 866-550-5705 (or maybe I had and that was where the transfers started). Anyway, it seems they now have their act together a bit more. Although callers are referred to the web page re: the Obama Modification plan, since I already completed the forms and faxed my documentation, I went through the menu and quickly got a live person. Great news (I hope)! While they originally told me it would be at least 30 days before I hear anything, they are now saying that since I faxed it on the 5th, I should hear back from someone by 3/19 (ten business days from the day the paperwork was faxed). They told me to call back if I don't hear anything by 3/20. After all the disappointing stories I've read in this forum, I would be very happy if I could just get someone to acknowledge they have my paperwork and are working on it.

[deniseb]

azdmsmith - Hang in there! I originally requested a modification in November and submitted my documentation in December. Nothing actually happened until I called the executive resolution team. Coinsidence?? I'm not sure. I finally got a live analyst on the phone last week, and today - voila - an offer!!!

I think they have their systems in place now for the new Obama plan. I was told last week that all mods had to be screened for that plan and all others prior to an offer..

[antel]

HI deniseb,
I think we started our mod almost at the same time. Did you say that they already gave you an offer? Does that mean you were already approved? I called chase today for an update and the lady told me that my file was escalated to the management for review last friday. She told me to call back in two weeks. Do you think this is a good sign? This is really process is really stressing me out...........

[Aeryth]

Just keep calling. They told me to call back in 30 to 45 days to see if my analyst was assigned, but I called back a week later and they assigned my analyst 2 days after my call. The 2 week delay they give you is normally like someone telling the check is in the mail and will be there in 7 to 10 business days.....sometimes it takes 2 days....sometimes it takes 10.

Just a note, when I called my analyst and left a message, I made sure to say...I am 6 months behind. He called me back within 4 hours.

[deniseb]

antel - I agree with Aerth, just keep calling. I finally called the exec team. I'm not sure if that is what made the difference or not, but things did speed up after that.

I was told that the terms "may change" but my analyst said she didn't think anything would. My deal still had to be approved by the investor.

My loan grew... missed payments and negative escrow balance rolled into the loan, and the length will be 32 years from June 09, but I'm happy to be out of that crappy adjustable interest only loan. I would never have been able to refinance. My home value is decreasing as I type. I just got a zilllow alert to tell me my value decrease by another 5% this month. Incredible!

Hang in there everyone! I'm confident things will begin to speed up now that the banks will have a financial incentive. It's all about the money!

[azdmsmith]

Is it accurate that under the Obama plan total expenses related to income are not really relevant, it’s the housing expenses vs. income that is really the only relevant figure. Page 3 of the Chase borrower’s assistance form requests monthly expenses and I am a little concerned because my monthly expenses exceed my income on paper, but I receive child support that will make up most of difference for the next couple years (then once the kids are gone hopefully the market is better and I can sell the house for something smaller/more affordable). I did not include child support as income when I originally qualified for my mortgage nor did I include it on the borrower’s assistance form (as I read the form it is not necessary to include this income if I chose not to have it considered). I am hoping that a modification would be based on 31% of my income without child support because it is temporary in nature, but without the child support it appears on paper that I cannot meet my monthly expenses listed on the form (which includes food, medical, utilities, etc.).

[snapple candy]

I wonder about this same question also with regards to income vs expenses compared to income vs housing and what actually will be used to set payment amount under Obama plan as I am in similar situation with child support and mine is set to lower soon. I think you did the right thing by not using your child support in the mix. They may use it against you to achieve a higher payment amount (ie: 31%). I am still in process myself. Keep us posted how this ultimately plays out in the calculations.

[azdmsmith]

Today is the 10th business day and I haven't heard anything so I called Chase. The gentleman was very nice, and explained it should take 10 days for them to contact me from the date they received the application and paperwork. However, he said they were working on getting some clarification from the government regarding the program and they are swamped with applications so it may take an extra couple of weeks. He couldn't verify that my information was received which still worries me a bit. 10 days seemed too good to be true anyway, but at least they are giving that info consistently.

[cjberlin]

I can tell you that I have sent my borrowers assistance form, with all documentations, TWICE...each time, I send certified mail so I can track on line...they receive it, but ask for it again, AND I have done everything over the phone as well...aaagghhhhh

[azdmsmith]

That is frustrating but not surprising to hear. I had wondered if I should go ahead and send the paperwork certified as well but I didn't want to create any confusion with them receiving two copies. I know the fax was received but it seems like everyone has a story about lost paperwork so I guess I'll go ahead and send it certified as well. Thank you.

[azdmsmith]

Today I was “preapproved” for a modification under the Obama plan over the phone with my trial period payment, a decrease of $1,000, being effective May 1.

I made my weekly call to 866-550-5705 and told them my mod paperwork was faxed on 3/5 and I was looking for confirmation of receipt and status update. I didn’t get the standard we are busy/still figuring things out/can’t confirm receipt info. I was on hold and transferred and rerouted, but I was able to verify my app was received and was told that it normally takes 90-120 days to review. However since my loan is through Fannie Mae, they have a streamlined process and area that mine is being handled through so I was directed to call 800-466-8939.

I waited about 20 minutes. The person that answered took my loan info and looked it up. She again verified they had received my packet but there was no new info. She then said she could take my info over the phone and see what I qualified for. She took my net income and some expense info (utilities, groceries, clothing, entertainment, medical, vehicle payment, insurance and gas). She put me on hold and 5 minutes later came back to say I was preapproved for the Obama plan. She said the paperwork would be mailed out and I would receive it within 2 weeks. The payment went down by slightly more than $1,000 and comes to 38.75% of my NET income. She never asked for gross income which I thought was strange since the Obama plan is to get to as low as 31% of gross income. The payment she gave me is 23% of my gross income? I sort of gathered that the info from our phone conversation is what will be used to get the trial period started and they will continue to work on the official file to put together the final modification that will be put in place.

She said I would be in forbearance for 4 months and to “keep in mind it may affect your credit”. I questioned her about that and she said they would be reporting that I was not making my full payment. NOW I get why some of the other people who are posting are so angry. They are telling me to make the reduced payment because the plan requires the trial period, yet my credit will be dinged for it? I’ve never made a late payment and my purpose in all of this is so that I could continue to make the payments on time. I wonder how badly it would screw things up if I continue to draw from my savings and make the full payment during the forbearance period so that I can keep my credit score? I sure don’t think that the government’s modification plan intended for the trial period to impact people like this.

I guess I’ll see what happens when I get the paperwork. I have her name and phone number so feel like I am miles ahead of where I was last week. I don’t blame Chase or the Federal government for the fact that my work hours were reduced and I can’t make the payment that I committed to so I am EXTREMELY grateful for the opportunity to get help. Although the modification is only for 5 years, I feel like that will be enough to get me through till my kids are close to graduating and the market stabilizes enough that I can sell and find something smaller/more affordable. If the worst thing that happens is my credit gets dinged, I guess I’ll let that happen but it sure would be nice if there was a way to prevent that.

[azdmsmith]

I figured out why they are using net income and how they came up with the number. The guidelines read:

Monthly net income can be used for preliminary screening and qualification. If used, the servicer will need to multiply net income by 1.25 to get to an estimate of Monthly Gross Income.

31% of my net income X 1.25 is exectly the payment amount they gave me.

I expect the final modification (31% of my actual gross) to be a couple hundred dollars a month more than the trial period payment. I wonder if I'll have to make a payment for the difference?

[Calli09]

azdmsmith,

I am understanding also, that there is not to be a "pre payment penalty" under the Obama plan, so when the paperwork arrives, I would read the fine print. I can see them pulling a fast one there too. Should any of us decide to pay off these loans early with a sale, I bet THAT will cost us too, even though it is not supposed to.......be careful everyone.

[azdmsmith]

Well, I thought things were going smoothly. A handful of people in this forum indicated they received documents from Chase via FedEx yesterday. I did as well and thought it was my forbearance paperwork. Instead it was a generic solicitation letter (verbatim form the Fannie Mae webpage sample letter) telling me to gather info about gross income, loan number, and financial hardship and call the home retention team. They also included a return FedEx label but no info about what I was supposed to send. I called and told them I had already provided this info (twice!), had already been given a forbearance payment amount, and had been told I would receive the forbearance paperwork by 4/15. They wanted my info anyway and didn’t ask about hardship but did ask very thorough questions about income including child support (which from everything I have read is not required to be included as gross income). I asked if they planned to include child support as gross income and he said he didn’t know? At the end of the conversation he said a forbearance amount would be calculated and they would send an agreement within 2 weeks, even though I told him I already been given a forbearance amount for my May 1 payment and was awaiting that paperwork. He didn’t have an answer (or even a clue). I tried to call my analyst. Although her message says not to leave her more than 1 voice mail, her voicemail is full and I could not leave even 1 message. I used the handy FedEx label to send a letter to the retention department and faxed a letter to my analyst as well. It seems like they either accidently sent me the solicitation letter versus the forbearance paperwork, or the right hand REALLY does not know what the left is doing.

[LetsMakeADeal]

I got my packet today. It sounds like yours is different. They are asking me the same questions, they want our tax records...my wifes check stubs and my quarterly tax report. In addition there are several copies (two I mail back) of the modification packet. That we also need to make three payments for our trial period. It sounds different than yours...no?

Also...two things...thanks for the math you did earlier on how they came up with the payment. BUT...do you remember what you submitted as your "disposable income"? Is that based on gross vs net?

Good luck!

[snapple candy]

AZ,
I think it is the left hand doesn't know what the right hand is doing. Maybe they keep asking to see if anything changes or to make it seem like they are actually doing anything on your behalf. (no I am not a cynic-hehe)You and only you (legally) can decide whether you want your child support used as income.Technically it is considered "unearned" income when it comes to financial aid purposes for education and state welfare assistance but when it comes to qualifying you for a loan, it is my understanding you can decide how and when you want for it to be considered income. I think loan applications even state this. As a matter of fact, I am staring at my Chase loan mod papers and it says the following "Proof of income for other household members living in your home (Alimony, Child support,etc) if you want such income considered in a loan workout." Good luck on yours. I am faxing mine in tonight.

[azdmsmith]

Letsmakeadeal
I believe I was negative a couple hundred dollars on disposable income using my net paycheck income. Once my child support is added in I am back into the positive, but I haven’t provided CS info in any documentation because it is my understanding that is optional and I didn’t use it to originally qualify for my loan. *** touched on it as well but I believe that there are a multitude of considerations in addition to disposable income (in my case I have almost no other debt than house and car and sufficient savings to cover a couple months of payments). In fact it does not appear that disposable income is a consideration in the Obama plan so it may affect some more than others depending on the mod?

Snapple candy
Someone else posted that the Home Retention Department was outsourced by Chase to handle the wave of mod paperwork. I am sure that is accurate because I called today (800-495-9412) and the call was misdirected, they had to ask what bank I was calling to redirect me so it’s definitely an outsourced call center. That explains why the right hand doesn’t know what the left is doing. Everything I have done on paper did say that child support was optional (as did everything I have read) so I was very surprised when they asked for it verbally yesterday. Good luck to you, I hope they get everything worked out and running smoothly by the time they get to your paperwork.

[azdmsmith]

It’s been 14 days since my analyst gave me a forbearance payment amount that will be due May 1 and indicated that I would have paperwork within 14 days. After receiving a generic letter via FedEx and being told by the home retention dept that I was basically starting over, I have tried to call my analyst daily but her voice mail is full. I called the executive team today and they were more interested in how I got their number than helping me. He put me on hold for a while then gave me a “direct” number for my analyst (a 614 area code rather than the 1-800 number with her extension that I had been using). I don’t know how that is more direct because it just took me into her voice mailbox which was full.

[Bert C]

Does anyone know if they also include an escrow into the 31% equation. I presently do not have an escrow account. Just curious.

Thanks.

[peggyinfl]

Yes, they will include taxes and insurance in your payment. The 31% will include everything. P&I, taxes, insurance. Also Hoa fees.

[fauve]

Does anyone know if there are restrictions to renting the property after receiving the mod?