Mortgage companies and H4H success!

[Newman]

Frank, I can see the scepticism in the paragraph you posted..but I gotta ask, after a $200,000+ reduction in my principle owed on the loan, how in the world can my payments go up? The writer you quoted must not understand the balance owed on the NEW loan is based on 90% of the appraised value of the home...so in this case, lower is better. No matter how I slice it, I am taking roughly $230-240,000, fixing it at 30 years at 5% interest or lower, and impounding the taxes and HOI. Am I missing something, because I just went from a payment of 2650 a month, to about 1500 a month...and remember, also, that all fees and points are part of the 90%, it is actually 85% to the bank, 5% to costs...so NO money out of our pockets..

[franklinco]

Frank, I can see the scepticism in the paragraph you posted..but I gotta ask, after a $200,000+ reduction in my principle owed on the loan, how in the world can my payments go up? The writer you quoted must not understand the balance owed on the NEW loan is based on 90% of the appraised value of the home...so in this case, lower is better. No matter how I slice it, I am taking roughly $230-240,000, fixing it at 30 years at 5% interest or lower, and impounding the taxes and HOI. Am I missing something, because I just went from a payment of 2650 a month, to about 1500 a month...and remember, also, that all fees and points are part of the 90%, it is actually 85% to the bank, 5% to costs...so NO money out of our pockets..

Currently I myself am looking around the net for information regarding the H4H deal. A few sites refer to the LTV being changed from 90% up to 96.5%. I thought that since this was a national law from public law 110_289 that it was only changeable through the Congress enacting changes. Also the claim that shows the increased LTV states that the loans could be up to 40 years.

I agree with your point that with the new appraised value being lower, the finance being set to a fixed and hopefully better rate, the loan can then be successfully paid.

Many of us are skeptical of the program being something that will help many of us escape bad termed loans and prevent probable foreclosures.

I for one applaud your efforts to get the loan restructured and again point out that I myself would like this program to be achievable.

Thanks for the comments. I'm rooting for you to get final approval as are many other who read this forum are also.

[Maurice Bedard]

frankinco,


Considering the H4H is an FHA program............all of the information regarding it is right on FHA's website............along with all of the information that was put out to the participating lenders.

HOPE for Homeowners

[garyys]

Newman,

That is what I have been telling people for a while now (my house going from 318,000 to less than 110,000).

I think Franklinco's quote refers to general modifications from the lender where they change the interest rate, and fix it for thirty years and bring the payment goes up. Then it moves into the H4H program. I think there are more than 312 people trying to apply for the program. The list of lenders on the FHA site will take your info and set on it until they figure out how to do the loans. There seem to be very few investors buying these loans. I found one of the lenders that is a direct money lender actively looking for H4H applicants. Their is a lot of misinformation out there, I just think you have to wade through it and find the truth.

Gary

[franklinco]

frankinco,


Considering the H4H is an FHA program............all of the information regarding it is right on FHA's website............along with all of the information that was put out to the participating lenders.

HOPE for Homeowners

Thanks Cat for the link. I see the program still requires the 3% UFMIP and the 1.5% yearly MIP. The ratio creditors can recover has increased up to 96.5 percent of current appraised value. You now can refinance up to 40 years .

I'll check the site for continued changes with the program.

[diana0806]

hey gary, which lender on fha website is a direct lender? all the one's i called cannot get money for h4h. keep us posted . hopefully you will be a success soon.

[garyys]

diana0806

Considering I am not a success yet, I hesitate recommending any lender. I found them by looking for FHA lenders on the net. When I last looked they were not on the list, but they were listed a a general FHA lender. I had the same problem as you, lenders that wanted to participate, but no money to back it up. Until I found this direct $ FHA lender from New York.

Good Luck,

Gary

[Newman]

Okay, so here we go tonight. Got a LOT of stuff from the new lender, looks like I have to resubmit everything for these new guys, which begs the question, why are you sending over the old packet? why not just go off of that, and let me update stuff as it is asked for? Hmmmm...here is the laundry list of things they are asking for...


-last 2 years full tax returns with W2 forms and 1 month of recent pay stubs
-recent mortgage statements for refinances
-paystub from march 2008
-for your scenario-paper trail of last 24 months of payments
-mortgage note (you can request from current lender)
-appraisal if you have one (even if it is old)
-homeowners insurance policy for refinances
-4506, hope authorized and authorization attached signed
-letter of explanation for any derogatory items on credit (lates on the mortgage) with documentation to back it up
-any assets that are in liquid form (retirement accounts, checking, savings, cd, stocks, and bonds)
-copy of drivers license and ss card


A lot of this stuff is already done, but they are also wanting a LOT more documentation than the last guys, some of which I am not sure that I have, time will tel how much I can come up with. Also, I did the numbers for the ins. stuff, here are those numbers..

UFMIP is 3.0% of the loan amount=8100.00=paid up front as part of the loan


ANNUAL PREMIUM IS loan amount divided by 1.5%=$1620.00 divided by 12=$135.00 PER MONTH?

So I have work to do the next few days on this, try to get as much of this stuff (read BS) together, and get it submitted, so here we go again, but this time I feel good, all of the paperwork from this lender has Fannie May letterheads on it, so that means hopefully that maybe the loan can be converted later on also...for now, I am not concerned about the payback issues, I calculated that out also, here are those numbers..

Appraised value of the home is $270,000
Minus the 10%= $27,000
Actual amount of loan is $243,000
Difference is $27,000, I owe them $13,500 after 5 years.

Since we are over 200,000 in the hole here on the property, I don't see us making a large rebound within 5 years, so any equity would be a small amount, I feel that for the loan we are getting, i.e. principle reduction of over $200,000, fixed rate conventional loan, 30 years, maybe even 40, with a 4-5% interest rate, at this point I can not see a downside to it, keep in mind also that ALL closing costs are paid through the loan, not me. Questions?

[Maurice Bedard]

Newman,


I just want to say Good Luck!!

I hope you are the first H4H success on the forum!

With Gary following the same success right after you!

[Newman]

My Broker told me Friday this is a "Done deal" heard that before, thus my incredulity. That said, he also said that out of all of the brokers he knows he is the ONLY one to get one of these done...I know brokers, I never knew one to say something like that unless he believed it, they aren't prone to embeleshing for no reason. Plus, i have given this guy no money at all, so far, he is working on the amount to come to him from the bank, not from me. Interesting.

[garyys]

Thanks for the update Newman, and good luck.

I think that it is key for people not to pay up front for these services. From what I have read, I don't believe its legal for these "modification" companies to charge upfront fees in CA. I can understand paying an attorney for a review of docs for violations. I have a friend that was burned by one of these scam, somewhere between $500-1000. I tried to tell him not to do it, but he said it was "the way to go". He went strait to foreclosure auction! I have not even paid for a credit check at this point. I will have to pay for an appraisal if it makes it that far, but the lender makes their money from the loan.

Gary

[Newman]

There ya go brother, the key is finding someone who makes his money OFF THE LOAN. I searched around a lot for a loan modification guy, and basically found nothing, SPS tried to modify us, and that was a circus. If this does not work, I will file Chapter 7 in an instant, I already told SPS to do what they need to do to work with me, because they will never see the inside of this house.....I think they believed me, as they are laying down for this loan...

[franklinco]

My Broker told me Friday this is a "Done deal" heard that before, thus my incredulity. That said, he also said that out of all of the brokers he knows he is the ONLY one to get one of these done...I know brokers, I never knew one to say something like that unless he believed it, they aren't prone to embellishing for no reason. Plus, i have given this guy no money at all, so far, he is working on the amount to come to him from the bank, not from me. Interesting.

Great news Newman! Thanks for the update.

[Newman]

UPDATE!!!!

Got the GFE this AM!!! HAve a few things to do tomarrow, have some explanations to do, and get typed up, but at this point, things are now really moving along fine, and for the first time, i am getting a picture of what this loan is looking like. $25,000+ in closing costs, ALL paid by the lender, for one thing, mortgage ins. is an 8300 hit, all taxes paid up to date and impounded, as well as HMI...and, to top it all off, SPS called yesterday to let us know that they were sending us out a new payoff, as the original one for 243,000 was no longer good, the internal appraisal had come in LOWER, so the payoff has gone down also....!!!! After all is said and done, I might try to buy the rate down 1 point to 5%, for 30 years fixed. When I asked him about the 40 year rate, he said the feds will not insure 40 year loans at this point, but if that changes, we will do it...so, that all there is at the moment, I have more, but Amtrak called, and I gotta roll to Bakersfield today...have a great day, I know I will....maybe I'll sing on the train intercom for the passengers....after 10 miles of that, they bail at the next stop and I have the train to myself.....

[franklinco]

UPDATE!!!!

Got the GFE this AM!!! HAve a few things to do tomarrow, have some explanations to do, and get typed up, but at this point, things are now really moving along fine, and for the first time, i am getting a picture of what this loan is looking like. $25,000+ in closing costs, ALL paid by the lender, for one thing, mortgage ins. is an 8300 hit, all taxes paid up to date and impounded, as well as HMI...and, to top it all off, SPS called yesterday to let us know that they were sending us out a new payoff, as the original one for 243,000 was no longer good, the internal appraisal had come in LOWER, so the payoff has gone down also....!!!! After all is said and done, I might try to buy the rate down 1 point to 5%, for 30 years fixed. When I asked him about the 40 year rate, he said the feds will not insure 40 year loans at this point, but if that changes, we will do it...so, that all there is at the moment, I have more, but Amtrak called, and I gotta roll to Bakersfield today...have a great day, I know I will....maybe I'll sing on the train intercom for the passengers....after 10 miles of that, they bail at the next stop and I have the train to myself.....

It sounds promising. Thanks for the update.

There are other changes going on too with today's news for plans. I hope all goes well with the H4H short refi. If not, there should now be other options to help you.

[Newman]

It sounds promising. Thanks for the update.

There are other changes going on too with today's news for plans. I hope all goes well with the H4H short refi. If not, there should now be other options to help you.

Time will tell....I talked to my broker today, and he did not seem to think that the news today would help much...so, we'll have to see what the guidelines are in two weeks to tell how well it will go..I tend to think that until someone in DC man's up and flat out forces these sh!tty banks to redo the loans, nothing of substance will get done....even Obambi today talked about "persuading the banks" to do this....sigh...I won't hold my breath.....

[franklinco]

Time will tell....I talked to my broker today, and he did not seem to think that the news today would help much...so, we'll have to see what the guidelines are in two weeks to tell how well it will go..I tend to think that until someone in DC man's up and flat out forces these sh!tty banks to redo the loans, nothing of substance will get done....even Obambi today talked about "persuading the banks" to do this....sigh...I won't hold my breath.....

The provisions would work better if the word voluntary and incentives were removed from the provisions and replaced with mandatory instead.
Hopefully your broker is wrong because some of the changes relate to the H4H program with a few modifications to it as one of the items to help homeowners out. Hopefully they get rid of the UFMIP of 3% and lower the MIP percentage as mentioned earlier.
I believe the legislation will pass or we as a nation will have much else to deal with. The housing industry employs many and a vacated home does little to pay for local services like an occupied home would contribute through the homeowner paying county taxes instead of a vacant, deteriorating and nobody paying county taxes.
Good luck with the short refi. We need evidence it is being used as well as you need it for your home.

[Newman]

The provisions would work better if the word voluntary and incentives were removed from the provisions and replaced with mandatory instead.
Hopefully your broker is wrong because some of the changes relate to the H4H program with a few modifications to it as one of the items to help homeowners out. Hopefully they get rid of the UFMIP of 3% and lower the MIP percentage as mentioned earlier.
I believe the legislation will pass or we as a nation will have much else to deal with. The housing industry employs many and a vacated home does little to pay for local services like an occupied home would contribute through the homeowner paying county taxes instead of a vacant, deteriorating and nobody paying county taxes.
Good luck with the short refi. We need evidence it is being used as well as you need it for your home.

I missed the part about the changes to the H4H program...what have you heard they are doing? And as I understood it, this was not a program that needed to go to the floor, rather a part of the recent package signed by Obama on Tues. As I understand it, this already is law...can you do some clarifying for me? Thanks....

[franklinco]

I missed the part about the changes to the H4H program...what have you heard they are doing? And as I understood it, this was not a program that needed to go to the floor, rather a part of the recent package signed by Obama on Tues. As I understand it, this already is law...can you do some clarifying for me? Thanks....

I read the Obama plan and it seems to be a plan where people who want to take advantage of the lower interest rates but cannot refinance because of the LTV being over 80% can do so through the GSEs.
Apparently this plan is a voluntary plan so the effectiveness will depend upon the lender or servicer to take the $1k incentive over all the money that they make for foreclosures. (servicers anyway)
I guess the idea to the plan is to lower people with good credit to get loans with lower monthly payments so the money could then be spent on other items to stimulate the economy.
I concur, I see nothing on the H4H program being improved except in HR 384 for the spending of the left 300 billion plus money through the tarp.
Thanks for the correction to my statement. I'm looking over all of the stalled legislation with certain goals and muddying it with the "plan" which does not require laws since it is through the GSEs mostly and for those to enable them to refinance into lower interest rates.
I guess we'll see once March 4th comes around.

[Newman]

UPDATE!! As I type this, my loan docs are printing out!!! Nice, things are starting to roll out here....

[Newman]

I should stipulate here that these are docs, but it ain't over till it records, and I still have some finiancials to get together, this is just a step in the process, a good one, but I'm not done yet....keep your fingers crossed...

[Newman]

Well, I was right, we have the pre-approval. Those of you in the know know that in the loan world, this is a means to an end. But, in this case, I never thought we would get this far, so I am amazed at this point. Small victtory that it is, I'll take it. Now, back to writing letters and diggin up old paystubs... can you believe they want our April 2008 paystubs? Sheesh...gotta go find them, no idea where to look...I only keep six months in the office here, they are out in a box in the garage I believe...and why can we not post pictures or whatever on here Kat?? I got a couple of doozies I could post up...

[Newman]

Well, we are almost there, I am busting my behind because we are at 5% on the loan at the moment, but that could go down on Monday, and we can not lock in a rate until I order the appraisal on the house....just for the OUCH! factor, 450 for the appraisal now....sheesh....used to be 350...if I can get this thing locked in at 4.5% or better for 30 years fixed?? I will live in this house till I die...so, everything I can fax is faxed, CPA faxed over W-2's for '07 and '08, just need to get the March 2008 stubs found, and we should be golden.....thoughts everyone??? Champagne yet? Not yet, but soon...:l

[franklinco]

UPDATE!! As I type this, my loan docs are printing out!!! Nice, things are starting to roll out here....

Congrats! It sounded like a tough battle to go through. I wish for things to roll smoothly for you once the loan is set up. With your success, it should encourage others to give the program a go.

[Newman]

Should call for the appraisal on Mon. or Tues. Can not lock in the rate until I get it ordered...hoping for a rate in the high fours....wouldn't THAT be something???

[franklinco]

Should call for the appraisal on Mon. or Tues. Can not lock in the rate until I get it ordered...hoping for a rate in the high fours....wouldn't THAT be something???

That would be excellent. I am paying 9% on my current loan. It is $120 per percent for the interest portion. A 6% interest rate would allow me $360 a month for other bills or for other purposes. I sure know the 3% rise in interest took away the $360 needed for paying other bills. Good luck with the apraisal and lender acceptance and terms.

[LenderNoHelp]

Hi Newman,

I have been reading your posts... great info. and good luck.

SPS 2nd mortgage called my Friday asking me to do a "short pay" however CW is my first mortgage and they say they do not accept short pay. Short Refi will not work unless CW accepts right?

[Piscesgirl]

Hi Newman! I am so happy for you and your family! Thank you so much for sharing everything with us!


You had mentioned that you were 'printing loan docs' but that the appraisal hadn't been ordered or the rate locked in? I may have missed something when I was trying to read through everything but I would think that those two things are needed before actual 'loan docs' can be drawn. Did the previous lender have an appraisal done and you are paying to have one done for the new lender? I know things differ from state to state but it’s weird not to be able to lock in your rate… I guess because the loan amount may change based on the new appraisal?

I am trying to start the process myself and really appreciate any details. I am trying to learn as much as I can so I can try to move things along.

I don’t have a lot of time left before I will find myself in my own ‘van down by the river’

[garyys]

LenderNoHelp

I don't know your situation, but maybe you should ask them what they would take in a short payoff? If my H4H fails, I am planning on offering a small cash payoff to my second. (my second is $62,000, might offer them 2,000 to 5,000 dollars?) I don't know if this will work, but it is worth a try.

Gary

[Newman]

Hi Newman,

I have been reading your posts... great info. and good luck.

SPS 2nd mortgage called my Friday asking me to do a "short pay" however CW is my first mortgage and they say they do not accept short pay. Short Refi will not work unless CW accepts right?

If SPS is in second place, I do believe you would need to get CW to go in first....don't confuse short pay with short refi, they are different. You need to call them and ASK them if they are working with the H4H program, I do believe they are. H4H is a short refi, meaning you are refinancing your current mortgage for less than what you originally signed for. Also bear in mind, that it is NOT a credit based loan, i.e. your credit history does not play a role in the decision to give you a loan, rather, your individual situation does....let me know if I can help any more.....best to you....Newman.

[Newman]

Hi Newman! I am so happy for you and your family! Thank you so much for sharing everything with us!


You had mentioned that you were 'printing loan docs' but that the appraisal hadn't been ordered or the rate locked in? I may have missed something when I was trying to read through everything but I would think that those two things are needed before actual 'loan docs' can be drawn. Did the previous lender have an appraisal done and you are paying to have one done for the new lender? I know things differ from state to state but it’s weird not to be able to lock in your rate… I guess because the loan amount may change based on the new appraisal?

I am trying to start the process myself and really appreciate any details. I am trying to learn as much as I can so I can try to move things along.

I don’t have a lot of time left before I will find myself in my own ‘van down by the river’

The docs I signed are the loan docs, just not the financial loan docs, those are the ones we sign after final approval. As for the appraisal, we thought we would not have to order one for our side, as SPS had done an internal one, and it was thought that would suffice the loan Gods. No. Turns out we need a FHA "Approved" appraiser to do the thing, and how much does that cost? $450.00 folks. Last time I got one, it cost me $350.00. I am so tired of paying for the govt. to do things. The SPS one was fine. And, since this is a govt. loan, don't be surprised it the 450 is in effect no matter where you live.

As for the rate, I can not lock in the rate until I order the appraisal, and I am trying hard to get that done this week as the bonds went down on Friday, meaning the rates most likely will go down below 5% this week, so we are trying to get all of our ducks in a rowto take advantage of that. I have a feeling, that if I do this week right, I will end up with a loan below 5%, fixed for 30 years, at around 250,000.....that said, this may be the last loan I will ever need....I'm not sure I will ever get a better loan than this again...

[garyys]

Newman

One of my big concerns, if I get to where you are, is the FHA appraisal. My home will take a lot of work to conform to FHA guidelines (gutters, sewer hookup, flooring, paint, ect). I am wondering if you have any of those issues? If you do, when it happens, how the FHA deals with them. FHA and HUD have talked about lenders needing to work with homeowners to make H4H work. I wonder if FHA is going to work with homeowners to make these loans work (homes that don't meet FHA lendinding conditions)?

Thanks for the updates, I hope all goes well next week!

Gary

[LenderNoHelp]

Garyys,

That's not a bad idea to offer a settlement with Second Lender. What do you think of lien stripping?

[garyys]

LenderNoHelp

I don't know if offering them a cash amount will work, but if they are willing to work with you it may be their best option. In many cases these seconds are non recourse loans, and if the home forecloses they will get nothing. If you qualify for H4H they will get a small amount of a settlement from the gov. The "resale" of that loan would be worth very little to them also. Research what investors are buying/selling seconds for.

If you go H4H that may be your best choice?

As far as lien stripping, I believe that requires bankruptcy. Why go through bankruptcy if you can avoid it?

Gary

[garyys]

Newman,

Is the principal reduction going to reflect negatively on your credit report? On everything I have been doing I have been requesting that they not report it negatively to the credit agency. I will see what happens.

Gary

[LenderNoHelp]

Gary and Newman,

Are you guys both current? I am going on 60 days late, received NOD from SPS (2nd lender). If applying for H4H, do you know if it will freeze the foreclosure process?

[garyys]

LenderNoHelp

I am current. I think Newman has been behind (research his old posts to see the details). I don't know if it will freeze the process.

Gary

[Newman]

Gary and Newman,

Are you guys both current? I am going on 60 days late, received NOD from SPS (2nd lender). If applying for H4H, do you know if it will freeze the foreclosure process?

No, I am not current, and yes, doing H4H WILL freeze the foreclosure process while you are working on it....remember, you need to find a broker who does the program, and then he can find you a bank...I have one of each, but forum guidelines prevent me from posting them....email Cat if you want them, I will email them to her, she can forward them to you.....hope this helps...
Also, I would not worry about the NOD too much, I got one in Nov. I have it framed in the office here, after it sat in the bottom of the cats box for a week....

[Newman]

Newman

One of my big concerns, if I get to where you are, is the FHA appraisal. My home will take a lot of work to conform to FHA guidelines (gutters, sewer hookup, flooring, paint, ect). I am wondering if you have any of those issues? If you do, when it happens, how the FHA deals with them. FHA and HUD have talked about lenders needing to work with homeowners to make H4H work. I wonder if FHA is going to work with homeowners to make these loans work (homes that don't meet FHA lendinding conditions)?

Thanks for the updates, I hope all goes well next week!


Gary

For us, this is new construction, so I am not too worried about the appraisal....talk to the appraiser about your concerns, he should try to help you, if all else fails, a couple hundred in his pocket and a 24 case of GOOD beer, and you should be fine...

[LenderNoHelp]

Newman,

I emailed Cat, can you email her the info please? Thanks! Also, I know you said you are not current but, do you have to continue to make some kind of payment?