Sent: Sunday, September 13, 2009 12:23 PM
Subject: Making home afordable program
I applied for the "Making home affordable" program for my first mortgage and then called SPS to do the same with them, within 2 months I was sent a modification that lowered my interest from 12.25 to 8.75 and extended my term from 15 years to 30 years that lowered my payment from 350.00 to 263.01. After signing the modified agreement I looked into my original loan and learned I have a balloon payment of 29,124.29 on Sept. 1st 2021.
My question to you is (Is this payment still expected at any time during the new modified loan?)
Also, The modification stated a first payment on Sept 1st 2009, my information online states a payment due on Oct 1st 2009. (Which is correct?)
One other thing, upon doing further research in the "Making Home Affordable" program I came across these guidelines for 2nd liens.
1. Second Lien Program To Create a Comprehensive Affordability Solution for Homeowners• A Second Lien Program to Reach up to 1 to 1.5 Million Homeowners
o Shared Efforts with Lenders to Reduce Second Mortgage Payments
o Pay-for-Success Incentives for Servicers, Investors and Borrowers
o Payment Schedule for Extinguishing Second Mortgages
• Automatic Modification of a Second Lien When a First Lien is Modified
How can my loan with you be modified if my 1st is still in the trial period?
• Shared Efforts with Lenders to Reduce Second Mortgage Payments:
Making Home Affordable will share the cost with lenders of reducing payments for homeowners on second mortgages.
oFor amortizing loans (loans with monthly payments of interest and principal), we will share the cost of reducing the interest rate on the second mortgage to 1 percent. Participating servicers will be required to follow these steps to modify amortizing second liens:
- Reduce the interest rate to 1 percent;
- Extend the term of the modified second mortgage to match the term of the modified first mortgage, by amortizing the unpaid principal balance of the second lien over a term that matches the term of the modified first mortgage;
- Forbear principal in the same proportion as any principal forbearance on the first lien, with the option of extinguishing principal under the Extinguishment Schedule;
- After five years, the interest rate on the second lien will step up to the then current interest rate on the modified first mortgage, subject to the Interest Rate Cap on the first lien, set equal to the Freddie Mac Survey Rate;
- The second mortgage will re-amortize over the remaining term at the higher interest rate(s); and
- Investors will receive an incentive payment from Treasury equal to half of the difference between (i) the interest rate on the first lien as modified and (ii) 1 percent, subject to a floor.Why was my loan only reduced to 8.75% when the program says to reduce to 1%?
Thank you in advance for your time in explaining these questions to me.