Moe Question?

[litehouse01]

What do they mean by "Excessive Forebearence" as one of the Denial Codes? Bob and Arlyn and I were wondering.............thanks

[Evan Bedard]

Hi litehouse01,

What do they mean by "Excessive Forebearence" as one of the Denial Codes? Bob and Arlyn and I were wondering.............thanks

I know what a forbearance is, but i'm not sure what an "excessive forbearance" would be..

[BobandArlyn]

Thanks Litehouse! and Evan.....they aren't saying that I can see.

[ama125]

I just answered this on your other thread..
New Directives and Denial Codes from Treasury

[ama125]

Originally Posted by Evan Bedard

Hi litehouse01,



I know what a forbearance is, but i'm not sure what an "excessive forbearance" would be..

Hi Evan,
They aren't talking about a forbearance agreement, rather, the principal forbearance in applying the standard waterfall for HAMP (the amount deferred off the UPB to get the payment to 31% DTI).

[caldwellb02]

How can it be that I have been on this forum so long and I don't understand what you mean, ama? "applying the standard waterfall for HAMP" - what?

[MyHAMP]

Originally Posted by caldwellb02

"applying the standard waterfall for HAMP" - what?

To reach 31% as monthly payment of gross income of borrower:

1. Reduce interest in 0.125 increments to 2%.
2. If not enough, extend loan term to up to 40 years.
3. If still not enough, forbear part of principal (interest-free) to the end of the loan or when loan is paid off early.

So you are sliding down from step 1-3 like on a waterfall..

Now if your NPV is negative AND they would have to forbear that much principal to the end of the loan to bring you to 31% that the balance you are actually paying interest on is lower than the value of your home...you failed the HAMP requirements..

[ama125]

[ama125]

Of course, we don't see the pool beneath the waterfall showing all of us drowning! That would make this picture complete!!