Why denials are happening

[davephx]

While I don't recommend paying this firm to do mods I think they have some of the best info I've seen on:

1) What goes into the loan mods

2) 2nd part various reasons for denials.

It is these optional reasons that are not part of the HAMP rules that is causing many of the denials.

See Modify My House Payment - Loan Modifications

[litton nightmares]

Thank you I will check into that site. I am so disgusted with the banks, the servicing AND the government for NOT INSISTING that homeowners have protections in the HAMP process, and that if you, in good faith attempt to get a modification that these crooks DENY, having DRAGGED THEIR FEET ENDLESSLY PRIOR TO DENYING it, that they do NOT get to accelerate a foreclosure without notice, etc... IT IS OUTRAGEOUS and our government is a FULL PARTICIPANT in their building FALSE HOPE FOR HOMEOWNERS and then jerking the rug out from under us.

I have been for OVER THREE MONTHS trying to get ANYONE AT LITTON LOAN SERVICING TO SAY THE SAME THING-- twice. It is a farce, they encourage the homeowner to THINK they WILL get a modification, and then the games begin.

I see one month trial modification payment they took a hundred bucks out for escrow, the last one they took 300 out for escrow? They record payments greater than what I paid. WHAT KIND OF BOGUS ACCOUNTING IS THAT? And then they play the game of HIDE THE DOCUMENTS. They request whatever comes to mind, just so they can make a PHONEY PAPER TRAIL OF NOTICES TO ME THAT THEY ARE "STILL MISSING DOCUMENTS" when they have a great deal MORE documents than they indicated NEEDED to be sent in.

Now I have a letter stating my documents are complete, ONE WEEK, the next, they magically are no longer. I am SO fed up, just like everyone else. Well if they take MY house they will NOT be able to sell it anyway, since the one down the road the bank took has been empty since spring, despite NUMEROUS price drops. And that one has a garage, mine doesn't. And that one is right across from the lake, mine isn't.

SO GOOD TAKE MY HOUSE AND YOU STOP THE PIPES FROM FREEZING THIS WINTER WHILE YOU SIT ON IT BECAUSE I'M REALLY THE ONLY ONE WHO WILL PAY THAT MUCH FOR THIS HOUSE! They can find that out the hard way. AND I will have my cousin, go ahead and sell me one of the houses he has, since he tried to "flip houses" and the last couple have flopped on him.

[litehouse01]

this is some of the best info I have seen so far as well....and it even suggested that 2nd mortgages may not be taken into the equaison depending upon the lender as you saw they show it both ways ..that can make a difference..by the way have you heard of anyone on all the threads from the various banks that has been sent to credit counseling for being over 55% or are they all just bypassing that and not following that guideline and just deneying instead? I have not seen one person who has said they got a letter about being over 55% and have to comply with the Credit counseling guideline have you???????????????

[worrywart1]

Yes, excellent info Dave! Thank you.

We were denied because the servicer was including our 401k plans in our income.

I never thought to ask for a copy of the NPV report for our home. I'm going to ask them for this come Monday.

Also, we are over the 55% debt to income ratio because of my job loss and yet we weren't referred to a consumer counseling agency. They just looked at our retirement account figures, our liabilities worksheet and denied us.

It's really disheartening to see how much discretion is given to the Lenders and Servicers. From what I have read on this forum, time and time again guidelines are not followed. It seems as if some of us know more than the employee's at these companies aprroving/denying our requests for mods!

[davephx]

Originally Posted by litehouse01

this is some of the best info I have seen so far as well....and it even suggested that 2nd mortgages may not be taken into the equaison depending upon the lender as you saw they show it both ways ..that can make a difference..by the way have you heard of anyone on all the threads from the various banks that has been sent to credit counseling for being over 55% or are they all just bypassing that and not following that guideline and just deneying instead? I have not seen one person who has said they got a letter about being over 55% and have to comply with the Credit counseling guideline have you???????????????

The credit counseling agreement is in the Trial Modification Agreement you sign and I believe in the latest final docs (sadly I haven't gotten). I have never heard other than a few times here huge debt being an issue other than you AGREE to credit counseling. I've already had it with two firms and indicate that on Trial Mod Agreement.

The one case here that is really weird is Citi/Freddie where she had chase after all her cc and get payment agreements etc. That was really odd.

But under HAMP rules no matter how high your back end debt to income is there is no baring on getting a mod just agree to counseling.

On the other hand it MIGHT be a factor in the NPV testing and perhaps she was on the borderline.

But there was no budget in the Trial Agreement paperwork and someone said not in their final docs either. I may have given budget info when verbally got on plan and also did via NACA (which they are ignoring). I had like a $200 surplus and only included cc that I was paying on not that I stopped on. That also seemed correct on what to do via the NACA counselor.

[davephx]

Originally Posted by worrywart1

Yes, excellent info Dave! Thank you.

We were denied because the servicer was including our 401k plans in our income. I never thought to ask for a copy of the NPV report for our home.

Also, we are over the 55% debt to income ratio because of my job loss and yet we weren't referred to a consumer counseling agency. They just looked at our retirement account figures, our liabilities worksheet and denied us.

It's really disheartening to see how much discretion is given to the Lenders and Servicers. From what I have read on this forum, time and time again guidelines are not followed. It seems as if some of us know more than the employee's at these companies aprroving/denying our requests for mods!

Yep good example of using different reasons. Oh boy... on 401K. The only rational reason I can think of is if you are taking regular distributions from it and that kicked your income too high either for the 31% or NPV. HAMP directives specially say retirment funds do not count as cash available to be sure you don't have enough cash to pay original mortgage.

I don't think anyone will give you a copy of the NPV results. Some servicers seem to tell you if you pass or maybe what home value they used but its very iffy and again varies greatly with servicers it seems.

You don't get referred to credit counseling. It is simply in the agreements that you agree to see if over 55%

[davephx]

Originally Posted by litehouse01

this is some of the best info I have seen so far as well...

It also confirms a lot of what some of us that have read from day one all the HAMP/Tresury/Fannie directives have been saying or in some cases speculating about from so many reports here.

This is the only report I've seen that lays it out so well.

[davephx]

Actually I think the blog person got his info from reading this board so no wonder we agree. He is posting here promoting himself. But he still has the info well summarized.

[St.LouisBlues]

It is true that an Implode blogger originally wrote the info on that page of our website (I wrote the rest), it is about 3 months old and I am contemplating a rewrite as we speak.
I will say that 'promotion' is not what we need right now, we are turning down cases at present until we get caught up. I do all the work myself, (I'm an old financial advisor)with the help of 2 Missouri/Illinois Attorneys, 2 paralegal types, and a Rat Terrier (my spiritual advisor). He lets me know that I am supposed to give u guys info for free and for fun when I can.

The REAL TRUTH is that the servicers don't care that much about the individual customer economics, they are very much concerned about their own economic survival.
Their decisions are pretty much dictated day to day based on their perception of their own economics.

The best you can do is present your case in a format that can at least be considered; they only care about income. Otherwise never give em another nickel and be ready and willing to walk.

The first article is exactly right.....

If you really want to know what is going on read:

Mish's Global Economic Trend Analysis: Government and Lender Policies of Fear and Shame Help Keep Homeowners Debt Slaves

and I am quoted in Business Week here:

Short Sales: A Fraying Lifeline for Homeowners - BusinessWeek

[litehouse01]

worrywart...did you question why they did not refer you to credit counseling since you were over 55%? And if they miscalcualted by adding 401k in did you demand they make the correction? Could it have made a difference? Did they offer you any kind of other plan repayment plan or forbearence or anything? so you could keep your home?

[worrywart1]

Originally Posted by litehouse01

worrywart...did you question why they did not refer you to credit counseling since you were over 55%? And if they miscalcualted by adding 401k in did you demand they make the correction? Could it have made a difference? Did they offer you any kind of other plan repayment plan or forbearence or anything? so you could keep your home?

No, I didn't question it because I didn't think to. I just assumed that because of the loss of income, that would have qualified us. The servicer denied us because of the assets and said that because we referenced the 401k when applying for the loan (which we did not pledge for collatoral!) we just referenced the accounts because I thought we needed to reference any and all assets. Little did I know then what I know now...

The thing that really chaps my hide is that my servicer never made mention of our debt to income ratio being a problem and neither did NACA. At the NACA conference, the counselor kept trying to finagel the numbers but said that we still had more liabilities and expenses than income. She said that even after taking out the credit card payments we still wouldn't qualify for a mod, told me I need to get some kind of job making/netting at least 1500. a month in order to qual. for a mod. and we should do a 6 month forbearance in the meantime. Never mentioned credit counseling.

So, I figured ok lets do the forbearance and try that route till I can get some of this debt paid off. After having read the article, I know now that they didn't follow the guidelines but they don't care.

They said that all we can do is apply again, write a letter indicating we were denied per too much in assets (401k) to that effect. It's still up to the lender, blah, blah, blah.

They are still moving forward with the forclosure in which we received the date of auction Jan. 19th.

If we don't get approved for a mod. or forbearance by Dec. 20th, I'm gonna have to throw in the towel. I just can't take this anymore. My kids are utterly devistated with the fact that their lives are being turned upside down. My mental health has declined rapidly.

Time will tell. I try to remain hopeful but even that has wained.

[davephx]

From what I read - you are both currently unemployed? Get that from your comment that you need to get some kind of job at 1500 and you said wife sadly lost hers in first post.

If this is true your only option seems to be forbearance and hope for work for enough for either of you. You need to have 31% of gross income = piti at 2% 40years and have to include taxes and insurance.

If income was not the issue, you would probably restart HAMP and get rid of the 401k as an asset since not required to show.

Depending on how big your 401k is...yah probably not that big.. you may be able to qualify income wise if you take an annuity stream from it and if can show it will last x (don't know the requirement) years you be able to count as income.

You can also get free help from Hope for Homeowners. But the key to your situation from what I understand is not enough income and that is the huge problem we know have with so much unemployment that HAMP wasn't able to address.

But with six months forbearance with luck perhaps you can solce the income issue?

The "Budget" they do at NACA showing cash flow deficient I don't THINK is the major issue from all I can tell. Over 55% only need to agree to see counselor, although it may factor into the NPV test.

Just grasping at straws here with ideas.

[St.LouisBlues]

Trust me, as soon as they sniffed $ in the 401, they figure to take a shot at holding your feet to the fire. Don't try to make sense of their diversion tactics.

We are now into the phase of filing for and obtaining TRO's on the basis of

1) Servicer is contracted to Freddie/Treasury to offer mods and

2) MERS has no standing to foreclose ("Where's the @$@^# note!)