CalHFA and a Pound of Flesh

[sonsnvr4gt]

Hi All,

I have read many of the posts regarding CalHFA and their unwillingness to work with you until you are several months behind. I have seen some posts of folks who are attempting to work with CalHFA or who are "walking away" because they cannot seem to penetrate CalHFA's methodology. What I have not seen is anyone who actually has worked things out with CalHFA whether through a modification, forbearance/repayment plane or a short sale. I will soon fall into the category of folks who CalHFA would rather foreclose on than work with, here is my story:

• My wife and I purchase a home with CalHFAs help, $400,000, with 7.5% down at the top of the market in 2007.
• In the ensuing years we find out that my wife will require significant medical procedures that amount just under $30,000 and the house will depreciate to 50% of its original value by 2009.
• In additional to the medical costs that we start accumulating in 2009, we have over $10,000 in revolving debt.
• In August 2009, the combination of the medical bills and revolving debt becomes too much and we fall behind.
• In September 2009, we advise CalHFA we need help (we had actually done this in August also, however we are advised that until we are further behind they cannot do anything).
• In late October 2009, we contact CalHFA and request a loan modification.
• In November 2009, we submit our first modification request. It is lost by CalHFA (they have yet to find it - yea! our financial information is now being sold to the highest bidders from Kerplatistan).
• In December 2009, second modification request is completed with a supporting letter from Clearpoint (HUD approved); we are sent a denial at the end of the month. CalHFA states that they do not have any access to federal funds like other banks do, due to their unique financial status (bond funded?) and are not taking part in any federally funded aid mechanisms. They also let us know that our medical expenses are not considered necessary and as such will not be considered as part of the modification thereby resulting in the denial.
• During the period from August to December we are consistently paying down our debts - our jobs are still secure and we want to do the right thing.
• At the end of January, they file the notice of default. This is sent to us via regular mail and certified mail.
• In January 2010, we start working with their asset management group i.e. lawyers/risk managers. They propose we complete a Borrower Financial Information sheet so they can better help us assess options. We complete it and send it back in early February - by this point we have cleared all of our revolving debt and have cleared most of our medical debt. In hindsight this is a mistake, as they continue to use to tell us what we can do financially with looking at the practicality of what they are asking.
• In February 2010, they tell us that they want twice our monthly mortgage amount monthly leaving us with roughly 1,250 to live on until they loan become current which will be roughly 8-9 months due to the attorneys/late fees they have assessed. The problem with this is that we both travel quite far to get to work and I am driving a 94 Accord which is on its last legs.
• In March 2010, we respond that we cannot see how that will be feasible as our income decreases during the summer and we will need a car as soon once our Accord dies. We submit a proposal to CalHFA to immediately begin paying our mortgage at 120% through the end of summer then up to 150% thereafter until everything is current. In March 2010, the Director of CalHFA announces that they will receive $700 hundred million dollars from the feds to help people stay in their homes.
• In April 2010, we are advised that we must now pay over $11,000 immediately along with 170% of the mortgage each month if we don't want to have the house go to Trustee Sale at the end of the month and auction 20 days later. They have been keeping tabs on our bank accounts and know we have cleared all of our debts and are holding car money.

So what is a guy to do? I want to keep my home even though it is upside down by $200,000; I know morality shouldn't have a place in these business transactions but for me it does. I want to pay all my outstanding debt to CalHFA over a 24 month period instead of an accelerated 10 month period because that is economically unfeasible and will significantly increase the likelihood that I will be put into an untenable situation during the summer when my income dips.

I have two weeks. They have not talked to me about short sale, though I will call them tomorrow to find out if that is an option. They simply will not budge; they want their pound of flesh. Should I contact their director, their board, my legislators? Any advice would be appreciated.

Regards,

Someone's son.

[5284CA]

Hey someone's son,

I too have CalHFA, this seems odd because the people I have talked with are seemingly trying to help me out, but maybe it just seems like that because I do not not need or want the help. I am making a financial business decision for my family long term to walk now and try to recover from this mess as best as possible.

To be honest with you I am not sure how you should proceed with them, if they are being unreasonable I am not sure there is much you can do...technically they are in driver's seat here because it is you who is behind on the payments, it seems like they can dictate the terms and you will either hae to meet their demands or lose your home.

I am not sure why they would not want to work with someone who is willing to try to keep paying them, they should be giving you an award for detrimental morality to be honest but instead they are trying to stick it to you even though you are trying to pay them back for everything you owe including penalties, lawyers fees, etc.; I want to say it surprises me but I have seen to many of these stories...

good luck to you!

[sonsnvr4gt]

I think the worst thing is that the financial information that I provided them to help me is being used against me. They seem to always ask for just more than I can come up with. Its an odd situation insomuch as their insurer will lose 200,000 dollars immediately and probably 3x that amount over the course of the loan. However, they are willing to both take the federal money and take the home without relent. I am perplexed to say the least.

[Daikon]

Someone's son, thanks for posting. I too am in a mess. Responsible homeowners, never been late, husband lost job so valid hardship, been a year. We applied for a mod, got rejected. Applied again, got offered $100 reduction per month. We denied in then went to short sale, with a promise from Cal HFA that I could proceed to short sale as long as I did not accept it. Investor rejects short sale application because they said we were offered a mod. and we didn't take it.

This is what HUD counselors at my place are saying is happening. Get offered a mod., no chance for a short sale because the lender extended their help and I said no. They probably won't even allow a deed in lieu. Comes down to making a business decision, get out from under quick, stop paying once and for all, let the home foreclose and find a rental quick before credit score dips. I even contacted the head of Cal HFA legislative policy, Diane Richardson, and she advocated for me and said she was sorry, it isn't fair, but that's the decision and that I got caught in a mess that isn't fair to me but is just reality. About $150k underwater, bought in 2005. Money just pouring down the drain until we stopped it. Can you give me any updates on your situation? Woud appreciate it. We're all in the same boat. Cal HFA is particularly difficult - they are unlike private lenders who have stockholders and more leeway in providing aid to the homeowner. Frankly, I think Cal HFA's upcoming Federal program called Hardist Hit due out in November 2010 is a far fetched dream designed to keep us pumping out money holding on to hope. It has to stop for us, it's been a year and our familly has suffered enough. We are chalking it up to bad timing, a hard contract to change, and upside that we are young and early in our debt to get out and recover in 7 years.

- Someone's Mom

[NorthBay]

I've read over and over the mod practices for CalHFA. I'm going to post some of my findings and conclusions in my thread if anyone is interested. Given the # of mortgages CalHFA funds or insures, there must be many others like us out there who could use this info when making a decision.

[fitso]

Sorry to hear. I thought modifications are easier with CalFHA than conventional banks.

[nacho1mom]

We are in much the same position as “Someone's son”. I lost my $40,000/yr job a shortly after qualifying for our home and have been able to get only spotty work; not the same income as when we qualified for our home in 2003. Our mortgage payment became 68% of my husband’s income.

We were debt free when we bought our home, but, to pay monthly expenditures, food, bills, etc., we did start using credit cards.

While our original loan was with Washington Mutual, we made only one payment to WaMu before they sold the loan to CalHFA.

From a layman’s standpoint, usually you cannot "enter into a contract"with someone unless both parties know the terms and agree to the terms of the contract. When our loan was sold, we were not asked and were not apprised of the “terms” of CalHFA’s funding and the repercussions. They just sold it!>
Due to an unexpected inheritance, we were able to keep making house payments and pay off 2 years- worth of credit cards, still in hopes I would find work. >
By 2008 it was clear we were in trouble. In March of 2008 I called CalHFA requesting assistance as the news stated”…under Obama’s administration… funds were being distributed for loan modification assistance.” >
We were told many things by CalHFA agents:>
2008_1^stattempt: CalHFA is not a bank and they are not being awarded federal funding.>
2009-2^ndattempt-We need to make $200-$300/mo. more than our expenses or they will not even look at our application. We would be considered a bad risk.>
2010-3^rdattempt-”….There is no problem.”
*Because we are current on our house payment, (sic) "there is no problem."
*The income to mortgage ratio(68%) is not a factor, we are current, it is not relevant.
*The credit card debt we have incurred to remain current (and eating) is not relevant.

I asked, "Would you help if we weren't making payments?" The reply was, (sic) "Then we would foreclose on your home."

2011-4^thattempt-In process…when my husband lost his job at the end of July 2011, we applied again;
CalHFA referred us to “Keep YourHome California” where, if we qualify for anything, it could be “up to $3000/mo.” for 6 months.>

Here are some interesting little factoids:>
Ø If your servicer is also your lender,and your lender is CalHFA, they DO NOT MODIFYANY Cal HFA LOANS. Below is a statement from the CalHFA website:>
“Although the structure of CalHFA’s bond indentures, orobligations to our bond holders, prevents us from participating in President Obama’s refinance and modification plans, CalHFA has prepared its own loan modification program for those who have suffered a financial hardship and are concerned about missing payments on their CalHFA loan. CalHFA’s loan modification program began mid-May for people with CalHFA loans, so please visit the LoanModification section of our web site for more information.”>>

Ø In an article published in the Sacramento Bee by reporter Dee Kasler, not only has CalHFA been funded by the federal government from the beginning, they have been given between 1.8 and 2.4 billion dollars in funds to provide “Loan Modification” assistance. As of July 2011, I believe they have received another 4 million. Below is a quote from the article:>
“In November of 2010, they had not distributed any of the funds as, and I quote, “But it's been delayed because of logistical issues, according to officials with the California Housing Finance Agency.>>
The agency said the program will start on a limited basis in a few weeks and expand from there. >>
Diane Richardson, an agency official who's running the program, said major technical hurdles arose because the program has been expanded since it was announced by the Obama administration in February.”
“Agency officials urged borrowers to continue talking to their lenders and not merely wait for the government program to kick in.>>
"Don't wait for us to be rolling these programs out,"Richardson said. "You should be working with your servicer.">>

Ø Keep Your Home California is an agency set up byCalHFA, funded by the Treasury.>
Ø Keep Your Home California uses the funding to:>
o Provide 6 months of “up to $3,000” for mortgage payments; KYHC then puts a "JR." lien on your house. It will be forgiven if you manage to stay in your home for 3 years.>
o Provide funding to get current if your paymentsare in arrears.>
o Provide counseling, which I will assume is tantamount to letting you know you’re up the creek without a paddle, something I’m sure you’re aware of or you wouldn’t be calling them. (From their own website, they are awfully proud of the fact that they’ve counseled 165,000 people)>
o Provide transitional assistance. (Help you move into a rental if you can find one?)>
Ø According to the U.S. Bureau of LaborStatistics, in California, the unemployment rate is 9.3% (June 2011).>
Ø According to the U.S. Bureau of Labor Statistics, in California 44.4% of the unemployed have been out of work for 27 months or more.>
Ø None of the “lenders” have to participate in loan modification; it is voluntary, but again, referring to only CalHFA…they do not modify their loans.>
Ø CalHFA is still offering “First Time Home Buyer Loans” for a 4% interest rate; 1 ½ % less than our interest rate. (They won’t lower our interest rate to bring down the house payment.)>
Ø CalHFA has a listing of “affordable housing”which consists of their foreclosures.>
The government’s original idea to the Loan Modification efforts are a to reduce mortgage payments to 31% of the current income. This is a long-term, viable solution to keeping people in their homes. CalHFA has no such intention.>
I have emailed all our legislators in California that might have any ability to look into this situation. I don’t know what else to do.>

[nacho1mom]

I would appreciate someone looking into this situation. There is something quite wrong about receiving funding for "Loan Modifications" that are never provided. There also seems to be something wrong with the inability or unwillingness of CalHFA to provide modification and then recycle all their foreclosures. Is this a conflict of interest?

I've read over and over the mod practices for CalHFA. I'm going to post some of my findings and conclusions in my thread if anyone is interested. Given the # of mortgages CalHFA funds or insures, there must be many others like us out there who could use this info when making a decision.