New Modification/principal reduction process?

[Angels]

Hi all,

Been on this form for a while now and have experience with foreclosures, but none when it comes to the hamster wheel and in applying for modifications. With the latest government/bank settlement it sounds like there may be a chance to reduce the principle or get my payment lower. The owner of my loan is not Fannie or Freddie, so thought I would give it a go.

The start of my plan is to call the bank and tell them I want to pay the property tax myself and to send the impound money to me. After that it gets a bit fuzzy.

Here are the options I am looking at:

1. Request a loan modification or principle reduction to a reasonable amount. What are the new requirements for this to happen? I understand I must be current at the time of application, but once the process starts do I have to continue to pay?

1. Hang on to the property as long as possible before foreclosure. If the first option does not materialize, what do I need to do to keep it as long as possible?

Thanks, this should be fun!

[Evan Bedard]

1. Request a loan modification or principle reduction to a reasonable amount. What are the new requirements for this to happen? I understand I must be current at the time of application, but once the process starts do I have to continue to pay?

Hey Angels,

From my understanding the banks are going to contact/send out letters to those who may be eligible for a principle reduction under the settlement.. The terms of the settlement just came out so I doubt if you call in the reps are not gonna have much information on the settlement at all..

[gmazz]

Hi Angels, are you sure you have to be current to apply for principle reduction?. . .I am 2 months behind and called ERU they just tell me to call back on March 15 that is when they will start taking apps. . .

Thanks, Evan for your info about letters to be sent out . . .as usual you are right on top of new programs . . .sure hope I'm one of them who gets a letter. . .what do you think about being 2 months behind and already hamped at the floor?

Thanks for all your invaluable info!. . .God Bless! + JMJ

[Evan Bedard]

The mortgage settlement provides assistance for:

Homeowners needing loan modifications now, including first and second lien principal reduction. The servicers are required to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide.

State attorneys general anticipate the settlement’s requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who really can afford to pay.
- Borrowers who are current, but underwater. Borrowers will be able to refinance at today’s historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide.
- Borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. $1.5 billion will be distributed nationwide to some 750,000 borrowers.

TIMELINE

Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance.

Over the next six to nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the immediate cash payments, principal reductions and refinancing. Those eligible will receive letters.

This settlement will be executed over the next three years.