My Countrywide ARM Story

[mntwindan]

My wife and I bought our house last March with a Countrywide A.R.M. loan and a promise to "refinance for a better fixed rate loan in a few months".

Three months later I called our agent back and wanted to start the refinance process because interest rates dipped down to a low rate. She told me that her manager instructed them to "let it float for a few days". Of course, by the end of the week rates went back up again. At that time we still had equity in our home and could have refinanced.

I filed a complaint with the BBB saying that we felt we were intentionally mislead. Countrywide did respond to the complaint but said they were not liable for our decision. However they did admit to some mistakes that our agent had made. The only recourse they gave me was to call the local Countrywide manager and discuss our refinance options with him. He has not returned my calls. I may stop in and find him but at this point there are no options with refinancing because the equity we had in the house is gone now.

I did call the Loss Mitigation Department at Countrywide but was told "there is nothing that we can do for you right now. Call back in April after the Federal Government puts its new program in place." I asked for a Loan Modification Form and she said they do not have those. She said I shouldn't worry because our loan doesn't adjust until 2015.

We are current on all of our payments. Our interest rate is 5.75 until 2015. But as I explained to the Countrywide represenative, we don't want this A.R.M. loan. We want to modify it to a fixed rate loan for stability for our financial future.

I have read some of the posts. I am not sure what my first steps are. What should I do first?

We live in Southern California.

[Dan Bailey]

mntwindan.,
Glad you found the forum and posted.

From what I've read about the Obama plan, you would be a good candidate IF the lender decides to participate in the program. Keep up on your payments 'til March 4th and see what happens.
At this point it doesn't sound like you are in immediate hardship, just planning for the future(which is excellent) and that plan is geared towards people in your position.
Hang in there and good luck!

[mntwindan]

Thanks Dan, that is encouraging.

I may call the Loss Mitigation Department today and run my situation by them. Although I know the person on the other end of the phone may not be forthright, I am hoping that this new Federal program will be an incentive for Countrywide to fix some of the messes they have helped to create.

[heehoo22]

mntwindan... Countrywide's going to tell you that you do not have a hardship. You are able to afford your payments and your loan doesn't adjust for 6 years. Honestly, with hundreds of thousands of customers who cannot afford the payments NOW or are going through an adjustment within the next year... they aren't going to be able to assist you.

[Woodland Hills Worrier]

My wife and I refinanced to a pay option ARM in 1/2006 and have been making minimum payments since then. We intended to re-fi in 1/2009 to a fixed rate once the pre-payment penalty expired. Well, we are now underwater by $1000k and heading toward that 115% of loan that kicks us into monthly rate which will be out of our price range. I have been looking at the settlement terms for the predatory lending agreement signed by BofA/Countrywide and the Attorney-General of California. It seems that qualified borrowers are eligible for a principal reduction of 95% of current value. And everytime I call they say I am not eligible as I am not delinquent or in default. I can pay negam with some difficulty due to other debt that has built up, but each month I am adding to my principal and will soon hit the magic number that puts me at the maximum payment. My question is: Does anyone know how or why Countrywide plans to not fulfill its agreement in the legal settlement? Does anyone know how they plan to worm their way out of it? Knowing how they work and the political clout the bankers have, they must have found a loophole. Any comments?

[heehoo22]

Originally Posted by Woodland Hills Worrier

My wife and I refinanced to a pay option ARM in 1/2006 and have been making minimum payments since then. We intended to re-fi in 1/2009 to a fixed rate once the pre-payment penalty expired. Well, we are now underwater by $1000k and heading toward that 115% of loan that kicks us into monthly rate which will be out of our price range. I have been looking at the settlement terms for the predatory lending agreement signed by BofA/Countrywide and the Attorney-General of California. It seems that qualified borrowers are eligible for a principal reduction of 95% of current value. And everytime I call they say I am not eligible as I am not delinquent or in default. I can pay negam with some difficulty due to other debt that has built up, but each month I am adding to my principal and will soon hit the magic number that puts me at the maximum payment. My question is: Does anyone know how or why Countrywide plans to not fulfill its agreement in the legal settlement? Does anyone know how they plan to worm their way out of it? Knowing how they work and the political clout the bankers have, they must have found a loophole. Any comments?

Countrywide is working in fulfilling the agreement regarding the AG Settlement. The Settlement does state that a homeowner must be 60+ days delinquent to qualify. So under those terms, if you are current, you will not qualify.

Since you are current, Countrywide will most likely not review you for a loan modification. You can go through NACA (a non-profit origination) to apply for a regular modification. But loan modifications do not include principal reductions. Only under the terms of the AG Settlement is Countrywide offering principal reductions and it is only to qualified borrowers. Even if you are delinquent, doesn't mean you would qualify for a principal reduction.

Also, Countrywide has not ACTUALLY done a principal reduction at this time. The Payoption Arm loans that are eligible for the AG Settlement are in a hold queue while Countrywide works on the program that would allow for principal reductions.

[Woodland Hills Worrier]

Thanks for the response. Would be nice to know that principal reduction could be accomplished. What are the requirements to be a qualified buyer other than delinquency? I fall within the time frame of the settlement. Are there any other qualifications? One passage in the settlement does refer to becoming deliquent in order to qualify, but it would mean essentially a more stringent evaluation of your inability to pay. We are really scrounging around to keep current. Also there is some langauge referring to junior lien falling off during re-fi to current loan value. It all sounds too good to be true.

[Dan Bailey]

Countrywide & Bank of America Watch: The 11 State Attorney General Settlement in Context | Home Mortgage | Protect Your Home & Mortgage With Loan Safe

[heehoo22]

Originally Posted by Woodland Hills Worrier

Thanks for the response. Would be nice to know that principal reduction could be accomplished. What are the requirements to be a qualified buyer other than delinquency? I fall within the time frame of the settlement. Are there any other qualifications? One passage in the settlement does refer to becoming deliquent in order to qualify, but it would mean essentially a more stringent evaluation of your inability to pay. We are really scrounging around to keep current. Also there is some langauge referring to junior lien falling off during re-fi to current loan value. It all sounds too good to be true.

A payoption arm loan that qualifies for the AG Settlement, would only receive a principal reduction if we lower the rate down to 2.5% Interest Only and the payment is not 34% of the homeowners gross income. Then Countrywide would review for the principal reduction.

[Dan Bailey]

Thank you heehoo That one was way beyond me

[gray517]

this is the data on the AG settlement posted on CW website, one is the fact sheet the other is the press release

Countrywide Financial - Real Estate Mortgage Lender - Home Loans - Equity Loan Mortgages

Countrywide Financial - Real Estate Mortgage Lender - Home Loans - Equity Loan Mortgages

[Woodland Hills Worrier]

So what you are saying is that a 2.5% interest only loan would have to be more than 34% of gross income to be considered for a principal reduction? That would be a nice reduction in monthly payments but I would still be underwater. But prices could start coming back and maybe that would work out. Thanks for the info. Do I have it correct?

[heehoo22]

Originally Posted by Woodland Hills Worrier

So what you are saying is that a 2.5% interest only loan would have to be more than 34% of gross income to be considered for a principal reduction? That would be a nice reduction in monthly payments but I would still be underwater. But prices could start coming back and maybe that would work out. Thanks for the info. Do I have it correct?

Exactly... but your rate would only be 2.5% for a short period of time. It would then begin to increase slowly over time. They won't fix a rate at 2.5%

[mntwindan]

Originally Posted by Woodland Hills Worrier

So what you are saying is that a 2.5% interest only loan would have to be more than 34% of gross income to be considered for a principal reduction? That would be a nice reduction in monthly payments but I would still be underwater. But prices could start coming back and maybe that would work out. Thanks for the info. Do I have it correct?

Do you know if your loan is held by Freddie Mac or Fannie Mae? I found out that our loan is held by Fannie Mae so as I understand it, that will be to our advantage when all the facts are made public on March 4th (from the Federal Governments re-vamped Mortgage program). Anyone with more information on this?

[heehoo22]

If you loan is held by Fannie Mae, then you are not eligible under the AG Settlement. You will need to wait to see what the goverment is willing to do because at this point, Fannie Mae is not offering principal.

[sandyh]

To the original poster -
We were in your similar situation for many months (although we have a completely different type of loan - payment option one). Anyway, for months we kept calling and asking if there was anything they could do to switch to a fixed rate, but since we were current Countrywide would refer us to refinance which with no equity, wasn't an option. Modifications are for those that either are behind in payments or are going to become behind very soon. When we called in Nov, we were told that we qualified for the AG program - but that was only after I cried and had a nervous breakdown on the phone explaining that we weren't going to be able to make our December payment. If I had not have told them about our financial problems for December, they would not have put our loan in for review.

So we paid Nov, and then Dec came and we decided to pay our mortgage and not our back taxes as we had "thought" it was important to make every effort to pay. Our home was/is everything to us and we were so concerned about not paying - as we have always done, we put the mortgage before IRS, medical bills, credit payments, etc. The day after we made our December payment, we got kicked out and our modification was canceled. The moment I saw that online, something just snapped. I decided that the situation was, to a small degree, like a war. You need to make calucated decisions and you do need to take risks. We canceled our payment so we could pay our taxes - we figured since Countrywide wasn't working with us, we wouldn't work with them at the moment. Afterall, our whole life has fallen apart because of the $100,000+ of reverse amortization that has been added to our mortgage principal (we have a jumbo & never made interest only payment, always minimum). The 110% balance to loan has killed our ability to get good rates for any type of credit. It has been a complete snow ball situation and it all started with that @#$% mortgage broker and Countrywide.

We haven't made another payment to Countrywide and are, we hope, in the final stages of getting a modifcation. At the end of the day, you will probably have to decide how important it is for you to get a new loan at this time. Frankly, I'm with you in that I want security and want a fixed rate for the rest of my loan. I'm not sure how it all will shake out - it does feel good paying off the doctor bills that have piled up and getting rid of some tax liens. I can only hope that our choices will pay off and at the end of the day, we will get a modification that will work for us. I really can't imagine what it is like not to have to worry about mortgage terms...it seems like this has been going on forever.

Good luck - hope my experience, while mind you not over yet, can shed some light into why you probably will receive no help for a modification until you have a financial need. I don't think what Obama will put in place will help those that don't demonstrate financial need...such a complicated yin/yang...you need to demonstrate financial need but you also need to demonstrate that you can afford your house. Without those two qualifications, I don't see help out there.

[mntwindan]

Originally Posted by sandyh

To the original poster -
We were in your similar situation for many months (although we have a completely different type of loan - payment option one). Anyway, for months we kept calling and asking if there was anything they could do to switch to a fixed rate, but since we were current Countrywide would refer us to refinance which with no equity, wasn't an option. Modifications are for those that either are behind in payments or are going to become behind very soon. When we called in Nov, we were told that we qualified for the AG program - but that was only after I cried and had a nervous breakdown on the phone explaining that we weren't going to be able to make our December payment. If I had not have told them about our financial problems for December, they would not have put our loan in for review.

So we paid Nov, and then Dec came and we decided to pay our mortgage and not our back taxes as we had "thought" it was important to make every effort to pay. Our home was/is everything to us and we were so concerned about not paying - as we have always done, we put the mortgage before IRS, medical bills, credit payments, etc. The day after we made our December payment, we got kicked out and our modification was canceled. The moment I saw that online, something just snapped. I decided that the situation was, to a small degree, like a war. You need to make calucated decisions and you do need to take risks. We canceled our payment so we could pay our taxes - we figured since Countrywide wasn't working with us, we wouldn't work with them at the moment. Afterall, our whole life has fallen apart because of the $100,000+ of reverse amortization that has been added to our mortgage principal (we have a jumbo & never made interest only payment, always minimum). The 110% balance to loan has killed our ability to get good rates for any type of credit. It has been a complete snow ball situation and it all started with that @#$% mortgage broker and Countrywide.

We haven't made another payment to Countrywide and are, we hope, in the final stages of getting a modifcation. At the end of the day, you will probably have to decide how important it is for you to get a new loan at this time. Frankly, I'm with you in that I want security and want a fixed rate for the rest of my loan. I'm not sure how it all will shake out - it does feel good paying off the doctor bills that have piled up and getting rid of some tax liens. I can only hope that our choices will pay off and at the end of the day, we will get a modification that will work for us. I really can't imagine what it is like not to have to worry about mortgage terms...it seems like this has been going on forever.

Good luck - hope my experience, while mind you not over yet, can shed some light into why you probably will receive no help for a modification until you have a financial need. I don't think what Obama will put in place will help those that don't demonstrate financial need...such a complicated yin/yang...you need to demonstrate financial need but you also need to demonstrate that you can afford your house. Without those two qualifications, I don't see help out there.

Thank you for your heartfelt experience. I hope the best for you.

I understand what you are saying and it is what I am hearing from everybody in the buisness "You have to show financial hardship" to get any kind of attention.

I talked to someone from Countrywide today in the loan modification department and they said the same thing..."you have to show financial hardship". Although we are current on our mortgage, we, like you, are getting behind on some other things...so, we are going to show and prove we have a "financial hardship".

[sandyh]

Good luck to you as well. We did write a pretty heavy handed letter to CW, referring to exact language in the AG settlement that described our situation. I'm not sure if that helped or not - you might want to send them a copy of your letter to the BBB if you haven't already and inform them you will take every means possible to correct the wrong, etc. I still can't understand why there isn't some attorney out there making a huge class action here. I guess the attorney for the people "AG" has done this, but I sure haven't been impressed with the settlement so far...

[Woodland Hills Worrier]

Missing payments is going to get easier and easier as things get tighter. I still do not know how strong the AG legal settlement is. The language seems to state that under the terms of the settlement a qualified borrower of a pay Option ARM could get principal reduction to 95% of current value. BofA has set aside $8.5 billion to do this. Is this a fact or a bank PR move. Does anyone know how to contact AG office? California AG Brown is set to run for governor in 2010. He has a rep as a straight shooter. Are the banks able to buy him off. All these laws and bills in Congress seem to make it voluntary for the lender to participate. Seems to me the same as allowing Bernie Madoff to voluntarily give the money back. Wish I could get more clarification.

[gray517]

per the link I posted above (from countrywide's website)

Eligibility for Modifications
Eligible borrowers under this program must have received a qualifying subprime mortgage or a Pay Option adjustable rate mortgage prior to 2008, and the property must be a 1-4 unit owner-occupied residential property. Additional requirements include:

• The borrower is 60 days or more delinquent and the current loan-to-value ratio is 75% or above;
• The borrower becomes seriously delinquent at any time prior to June 30, 2012, and the loan-to-value ratio at the time of the modification is 75% or above;
• The borrower is current on the mortgage but is likely to become seriously delinquent as a consequence of a rate reset or contractual payment recast based on negative amortization triggers, and the loan-to-value ratio at the time of the modification is 75% or above.

Pay Option ARM borrowers accepting a streamlined loan modification option will have the negative amortization feature eliminated from their loan. For owners of only one residential property who currently have little to no equity in their homes, Countrywide will write-down the principal balance to as low as 95% of the current value of the property to restore an equity position. Based on the Affordability Equation, Countrywide will offer a fully-amortizing modification consisting of:

• An optional ten-year interest-only period on the loan; and
• Reduction of the interest rate with fixed step annual rate adjustments, subject to an interest rate cap.

[Woodland Hills Worrier]

Countrywide will write-down the principal balance to as low as 95% of the current value of the property to restore an equity position.

Does "will" mean they will or does it mean they "will" if they can't find any other way to get out of it. I think I fit into this part of the settlement and wonder when they are going to get it going.

[heehoo22]

They WILL... for borrowers that qualify. Which does mean they are going to try to find any other way to NOT do it.

[mntwindan]

Originally Posted by Woodland Hills Worrier

Missing payments is going to get easier and easier as things get tighter. I still do not know how strong the AG legal settlement is. The language seems to state that under the terms of the settlement a qualified borrower of a pay Option ARM could get principal reduction to 95% of current value. BofA has set aside $8.5 billion to do this. Is this a fact or a bank PR move. Does anyone know how to contact AG office? California AG Brown is set to run for governor in 2010. He has a rep as a straight shooter. Are the banks able to buy him off. All these laws and bills in Congress seem to make it voluntary for the lender to participate. Seems to me the same as allowing Bernie Madoff to voluntarily give the money back. Wish I could get more clarification.

I am new to this website (and glad I found it). Nice to talk with people in the same situation. It is a scary climate out there with all of the Ads running of people 'wanting to help you out of you bad loan', etc... Too many of them are predators preying on some of us that have dealt with predatory lenders already. We need to keep fighting and keep things in perspective.

I have read over some of the things listed about the "AG Legal Settlement". I have read over some of the requirements and see that we don't qualify because we got our loan in 2008 and not, as it is stated, "prior to 2008". I am not sure why they put that in there, but, there it is. My question is, can someone briefly state what the "AG Settlement" is?

[mntwindan]

Also, I have just finished filling out a form asking the county Assessor to re-assess our homes value so we can lower the amount of taxes we are paying. I wanted to let everyone know that you can do that. The form in Riverside County in California is called "Prop. 8" form. If anyone wants the phone number let me know and I will type it out. Yahoo has a free Home Value form you can fill out and it will give you comparisons of homes that have sold in your area so you can find the current value of your home. You will need to write down two of those homes that are similar to your own.

[Moe Bedard]

Countrywide Financial - Real Estate Mortgage Lender - Home Loans - Equity Loan Mortgages