Home Loan Services - Denied for HAMP

[rquin]

I applied for a modification thru home loan services in Jan 09 only to be told month after month they were behind then in June they said I was denied due to excessive debt and not enough income and they told me to wait until to September to apply for the Making home affordable program program which I did and now today got a denial from they saying due to my credit report and me not being behind on any of my bills I do not qualify. This is unbelievable I was under the impression that you didn't have to be late to qualify, my mortgage is way over 31% of income it is over %50 percent of my income. I don't know what to do, do I have stop paying my mortgage to get any help, when I ask them that yesterday they said that may not help. Any advise would be greatly appreciated.

[kymmer116]

Your lender told you, you didn't qualify b/c of your high debt and credit??? That is odd b/c I have seen people on here get the approval and final approval for a trial period/mod after they file bankruptcy. I think that most of us on here will/could be denied b/c of credit issues. Do you have a 2nd or HELOC? I hope it work's out for you!

[heidi79]

They are absolutely wrong, you do not have to be late on your mortgage or any other of your bills to get into this program. Problem is a lot of servicers are trying their damdest to not help people that are on time with their current mortgage.

If your financials are showing you hugely negative every month because of your debt and expenses, that may be the reason. You've got to adjust everything and try again.

[worrywart1]

From what I have read, servicers could care less about modifications as they actually lose money (according to a cnn article).

Our servicer told both myself, and two other people I know the same hooey, that you had to be LATE to qualify. Then come to find out, to qualify for the OBAMA plan, you have to be current for the last 12 months...

Our loan was sold off to Fannie Mae/THE INVESTOR so they told us the decision is up to the investor.

Here's the thing I have learned. Banks, Lenders, Servicers look at your gross income. You have to have enough income (after all your bills/debts that show up on AND off of your credit report) to make the "proposed house payment" which should be 31% of your gross income.

If not, you either have to pay down your debt, see if you incorrectly calculated your budget, or figure out what you can cut out of your expenses i.e. satellite or cable, eating out, entertainment, etc.

THEN, you MAY or MAY not have your loan adjusted as the servicers state they have to hear back from the investor on if the proposal is approved.

IF you can afford to make your house payment then do it. If not, then let them know your situation and why you can't pay. Resubmit everything again with the revised budget (if the #'s crunch out that you can pay your "proposed" house payment.

Good luck.

[MyHAMP]

Originally Posted by worrywart1

Our servicer told both myself, and two other people I know the same hooey, that you had to be LATE to qualify. Then come to find out, to qualify for the OBAMA plan, you have to be current for the last 12 months...

......

Here's the thing I have learned. Banks, Lenders, Servicers look at your gross income. You have to have enough income (after all your bills/debts that show up on AND off of your credit report) to make the "proposed house payment" which should be 31% of your gross income.

If not, you either have to pay down your debt, see if you incorrectly calculated your budget, or figure out what you can cut out of your expenses i.e. satellite or cable, eating out, entertainment, etc.

Cutting expenses might be required for many "in-home" modifications, but not for HAMP. In our case, the lender has NO OPPORTUNITY to even determine how much we spend on cable or eating out. The guidelines don't even require bank-statements. Your debts and default-risks ALL flow into the NPV.

There is no need to be late to qualify for HAMP - BUT (now comes the big "BUT"): There is this little NPV-test. Getting a positive result that favors a modification is very difficult if you are current. Sounds silly but that's how it is.

The NPV compares the cash-flow (in other words, the profit they make) between your current loan and the modified HAMP-loan. It's no surprise that - if you keep on paying your current loan - they will make more money off you than they would after reducing your payments and interest. And if you are current, it doesn't seem unlikely that you can afford your current payment (not that I say that's the case - it's just how the NPV sees it). Now if you are months behind, it seems unlikely you will ever catch up with your loan and all of a sudden, they have to compare the HAMP-modication to a foreclosure. We are looking at a totally different scenario now: Prices are at the bottom...maybe a mod is the better deal for them?

So the question if you have to be behind to get a HAMP-approval can be answered with a clear "YESNO". Oh, BTW, some investors have policies in place that you really have to be behind to be approved. That - however - is a different story. That's their policy and not a HAMP-policy.

[lennox]

MyHamp, where did you read the HAMP guidelines don't call for bank statements?

It seems like everything related to HAMP requires recent bank statements. I know I have read that the servicer need not ask for bank statements before the trial, but will ask for them before permanant modification. Even if this isn't a requirement of HAMP, I can't believe there is a servicer in the business that wouldn't require the most recent bank statements b/4 making a determination to do a permanant modification.

[davephx]

Unless I am blind.. could be from reading so much... there is no requirement for bank statements under the 10/8/09 Streamlined new rules unless you are relying on alimony or child support for income in which case you need "two most recent copies of bank statements showing the receipt of such payment."

[MyHAMP]

Originally Posted by lennox

MyHamp, where did you read the HAMP guidelines don't call for bank statements?

It seems like everything related to HAMP requires recent bank statements. I know I have read that the servicer need not ask for bank statements before the trial, but will ask for them before permanant modification. Even if this isn't a requirement of HAMP, I can't believe there is a servicer in the business that wouldn't require the most recent bank statements b/4 making a determination to do a permanant modification.

So far, we weren't asked for bank statements - and that's 2 weeks prior to our final trial payment. They asked for proof of income and profit and loss statements.

So far, I've yet to see an "official" HAMP-guideline requiring a submittal of additional documents besides the final modification agreement after the trial payments have been made.

If it is a requirement for a permanent mod (no matter if required by servicer or under HAMP guidelines), it would make more sense to request them right away - not after the entire application went through the treasury. Where's the sense in that and what do they want to determine that late in the game?

[hope67]

Originally Posted by davephx

Unless I am blind.. could be from reading so much... there is no requirement for bank statements under the 10/8/09 Streamlined new rules unless you are relying on alimony or child support for income in which case you need "two most recent copies of bank statements showing the receipt of such payment."

They also need Bank statements for the following:

Benefit Income (e.g., social security, disability, death benefits, pension, public assistance, adoption assistance). Evidence of (i) the amount and frequency of the benefits such as letters, exhibits, a disability policy or benefits statement from the provider, and (ii) receipt of payment, such as copies of the two most recent bank statements showing deposit amounts.