Ocwen Shared Appreciation Modification (SAM)? Anyone have any information on this?

[skeptical]

I agree completely. Glad for the modification...but feel like I have "sold my soul to the devil". They are completely incompetent. You have to watch thier every move. It is ridiculous.

[Cat Damiano]

The SAM is not on a Primary Residence - so for me I'll have to pay taxes either way so it won't matter. I'll get a tax for for 1/3 of the amount forgiven for each of the next 3 years 2013, 2014 and 2015 taxes.

Ok, that makes more sense as to why you would indeed want the forgiven amount to be spread out as it occurs.

[kelisad]

So you also received the 1099c for the entire amount forgiven and have already filed the taxes for it so it did not need to be reported as income? It sounds like the lender was correct in reporting the entire forgiven amount upfront, unless I am reading it wrong which can happen, lol, when it comes to Tax issues.

Cat, I read it the same way you do...OCWEN'S original 1099C they sent me was correct. It was up to ME to decide when to include it in my taxes. I did it all in 2012 so I would not have to pay taxes due to the mortgage forgiveness act. The IRS seems to be very specific that it is up to the borrower on how to report it. For people like Skeptical, it makes sense to want to do it incrementally....but for people like me it is better to report it all in one year.

[skeptical]

The problem with the 1099C is no one seems to know the rules on it. I went through hell trying to figure it all out. The IRS isn't clear, the mortgage company just issues the form and most tax people aren't up on SAMs and the tax forms. I even went to a Real Estate Attorney...they didn't know either.

[Cat Damiano]

Cat, I read it the same way you do...OCWEN'S original 1099C they sent me was correct. It was up to ME to decide when to include it in my taxes. I did it all in 2012 so I would not have to pay taxes due to the mortgage forgiveness act. The IRS seems to be very specific that it is up to the borrower on how to report it. For people like Skeptical, it makes sense to want to do it incrementally....but for people like me it is better to report it all in one year.

I agree with you and did not realize that Skeptical's modification was on an investment property.

[Cat Damiano]

The problem with the 1099C is no one seems to know the rules on it. I went through hell trying to figure it all out. The IRS isn't clear, the mortgage company just issues the form and most tax people aren't up on SAMs and the tax forms. I even went to a Real Estate Attorney...they didn't know either.

It seems pretty clear in the excerpt from the IRS site that kelisad had posted in regards to the lender having to report the forgiven amount on a modification in the year the mod was made permanent.

[kelisad]

The problem with the 1099C is no one seems to know the rules on it. I went through hell trying to figure it all out. The IRS isn't clear, the mortgage company just issues the form and most tax people aren't up on SAMs and the tax forms. I even went to a Real Estate Attorney...they didn't know either.

I think the 1099C's were issued before the IRS made that publication public. I plan on sending a letter to OCWEN's research department with that publication and ask them to correct their error.

[skeptical]

So if you took the modification in 2012, it isn't "permanent" until 2015 as that is when the final forgiven amount is forgiven. They forgive it in thirds and if you are late with payments they don't forgive the amount. So they really can't say it is forgiven until the 3 years are past with not more than 3 late payments.

[survivalmode]

I'd like to hear this forum's advice. I applied for loan modification on 4/12. On 4/16 I got a call from my RM stating that they have all the information and my file would now undergo evaluation. Logged on today, nothing new so I called and the guy tells me congratulations, you've been approved for a HAMP. Not what I was hoping for - was hoping for a SAM. Worse yet, the monthly amount was reduced a paltry $350 on a mortgage of over $4,000. Oh yeah, and we still have a second with SLS that we are dealing with but that is another story.I told the guy the new payment is not going to provide much relief. He said that since we qualify for HAMP, they could not consider us for their in-house program. HOWEVER, if I was denied the permanent HAMP, I might then be eligible for the in-house program.

The frustrating thing is that no one can tell me the terms of the HAMP modification. They claim that only after we make the three trial payments will they then be able to disclose how they even came up with that amount.

They ALSO claim that with a HAMP, they only look at income to mortgage ratio. Their offer puts us right at 31% but they don't even consider what we're paying on 2nd. Ocwen claims Hamp doesn't look at other expenses (this is obvious because if they did, they wold know a $350 reduction is not going to cut it.

Stats:
1st: GMAC/Ocwen $500K - $4,100/month
2nd:GMAC/SLS $100K - $400/month purchase money HELOC with adjustable rate - This has been as high as $800/month.

We've lost 50% of our income as of August of last year and we're under water at least $150K, based on the offers we've received (the house has been on the market for over a year) or $250K under water according to county tax records.

I was SO expecting a better modification than what we got.

So, my question for the crowd: do you think we could reapply to Ocwen after, say, we found ourselves unable to make the second HAMP payment, which would then cause us to be denied by HAMP?

[Cat Damiano]

I'd like to hear this forum's advice. I applied for loan modification on 4/12. On 4/16 I got a call from my RM stating that they have all the information and my file would now undergo evaluation. Logged on today, nothing new so I called and the guy tells me congratulations, you've been approved for a HAMP. Not what I was hoping for - was hoping for a SAM. Worse yet, the monthly amount was reduced a paltry $350 on a mortgage of over $4,000. Oh yeah, and we still have a second with SLS that we are dealing with but that is another story.I told the guy the new payment is not going to provide much relief. He said that since we qualify for HAMP, they could not consider us for their in-house program. HOWEVER, if I was denied the permanent HAMP, I might then be eligible for the in-house program.

The frustrating thing is that no one can tell me the terms of the HAMP modification. They claim that only after we make the three trial payments will they then be able to disclose how they even came up with that amount.

They ALSO claim that with a HAMP, they only look at income to mortgage ratio. Their offer puts us right at 31% but they don't even consider what we're paying on 2nd. Ocwen claims Hamp doesn't look at other expenses (this is obvious because if they did, they wold know a $350 reduction is not going to cut it.

Stats:
1st: GMAC/Ocwen $500K - $4,100/month
2nd:GMAC/SLS $100K - $400/month purchase money HELOC with adjustable rate - This has been as high as $800/month.

We've lost 50% of our income as of August of last year and we're under water at least $150K, based on the offers we've received (the house has been on the market for over a year) or $250K under water according to county tax records.

I was SO expecting a better modification than what we got.

So, my question for the crowd: do you think we could reapply to Ocwen after, say, we found ourselves unable to make the second HAMP payment, which would then cause us to be denied by HAMP?

Defaulting on a HAMP is not the same as being denied a HAMP.

According to the guidelines;

A borrower that rejects a modification offer for a mortgage loan under HAMP is not eligible for future consideration under either Tier of HAMP for the same mortgage loan unless the borrower experiences a change in circumstance. However, the mortgage loan must be considered for other available loss mitigation options to surrender the property including HAFA. A borrower may reject a modification offer (i) orally or in writing; (ii) by failing to make the first TPP payment; (iii) by failing to execute and return the permanent modification agreement after having made all required TPP payments.


Also:

Gross Income is used because everyone has different obligations that are personal, and most are elective in a paycheck, depending on the dependents that you claim, and any insurance that you choose as well as retirement accounts, again, this is a personal choice that not everyone chooses. Because of this, net income is way too flexible, one could max out 401K, healthcare, life insurance, savings plans. Gross income is the only clean way to calculate income, putting everyone on an even keel prior to any personal electives. Even if they could use net income the payment percentage would not remain as low as 31 percent. This is why the percentage is only 31 percent for HAMP, that is considered affordable. It is also why it is only figured for the payment of PITI and HOA if applicable versus gross income, and why expenses are not a part of that calculation at all.

Monthly Mortgage Payment:

The monthly mortgage payment used in calculating any monthly mortgage payment ratio in either HAMP Tier 1 or HAMP Tier 2 includes the monthly payment of principal, interest, property taxes, hazard insurance, flood insurance, condominium association fees and homeowner’s association fees, as applicable, regardless of whether these expenses are included in the borrower’s current mortgage payment. It also includes any escrow payment shortage amounts that are subject to a repayment plan.

The monthly mortgage payment does not include mortgage insurance premium payments or payments due to holders of subordinate liens.


They will only consider certain expenses in the back end debt ratio which if it is over 55 percent, then counseling will be required.

Verifying Monthly Gross Expenses

Servicers must verify the borrower’s monthly gross expenses as reported by the borrower on the
RMA using the credit report, tax returns or transcripts and other verification documentation
provided by the borrower. Monthly gross expenses include the monthly charges described in the
following list:

 The monthly mortgage payment for the borrower’s principal residence including taxes,
property insurance, homeowner’s or condominium association fee payments and
assessments related to the property whether or not they are included in the mortgage
payment. This information must be verified even if the borrower is seeking a modification
of a rental property

 If applicable, the monthly mortgage payment for the rental property that the borrower
seeks to modify, including taxes, property insurance, homeowner’s or condominium
association fee payments and assessments related to the property whether or not they
are included in the mortgage payment.

 Any mortgage insurance premiums.

 Monthly payments on all closed-end subordinate mortgages.

 Alimony, child support and separate maintenance payments with more than ten months
of payments remaining, if supplied by the borrower.

 Car lease payments, regardless of the number of payments remaining.

 Monthly payments on revolving or open-end accounts, regardless of the balance. In the
absence of a stated payment, the payment will be calculated by multiplying the
outstanding balance by three-percent.

 Aggregate negative net rental income from all investment properties owned, if supplied
by the borrower.

 Monthly mortgage payment(s) for a second home or seasonal rental property including
principal, interest, taxes and insurance and, when applicable, leasehold payments,
homeowner association dues, condominium unit or cooperative unit maintenance fees,
but excluding unit utility charges.

 Payments on all installment debts with more than ten months of payments remaining,
including debts that are in a period of either deferment or forbearance. When payments
on an installment debt are not on the credit report or are listed as deferred, the servicer
must obtain documentation to support the payment amount included in the monthly debt
payment. If no monthly payment is reported on a student loan that is deferred or is in
forbearance, the servicer will obtain documentation verifying the proposed monthly
payment amount, or use a minimum of 1.5 percent of the balance.

 Monthly payment on a HELOC will be included in the payment ratio using the minimum
monthly payment reported on the credit report. If the HELOC has a balance, but no
monthly payment is reported, the servicer will obtain documentation verifying the
payment amount, or use a minimum of one percent of the balance.

A servicer should not consider expenses of non-borrower household members when calculating monthly gross expenses.

[survivalmode]

Wow, Cat - you're amazing with the resources. So HARP has guidelines - I get that. You initially state that there is a difference between defaulting on a HAMP and being denied a HAMP. But I didn't see anything in the above that would indicate how Ocwen would handle that (a default). So I'll ask this. Do you think we'll lose the house if we are unable to make the HAMP payments? Will we have to wait a year before applying to Ocwen for any other modification? Or do you think Ocwen will consider us for another modification if we are unable to make the HAMP payments? I certainly don't want to refuse the HAMP outright but I am just not sure its going to help. We do intend on stopping payments on the second but want to work out something with Ocwen so that we can stay in the house. We are current on the Ocwen first and just missed our April payment on the second. We have never been late on either account before now.

[Cat Damiano]

Wow, Cat - you're amazing with the resources. So HARP has guidelines - I get that. You initially state that there is a difference between defaulting on a HAMP and being denied a HAMP. But I didn't see anything in the above that would indicate how Ocwen would handle that (a default). So I'll ask this. Do you think we'll lose the house if we are unable to make the HAMP payments? Will we have to wait a year before applying to Ocwen for any other modification? Or do you think Ocwen will consider us for another modification if we are unable to make the HAMP payments? I certainly don't want to refuse the HAMP outright but I am just not sure its going to help. We do intend on stopping payments on the second but want to work out something with Ocwen so that we can stay in the house. We are current on the Ocwen first and just missed our April payment on the second. We have never been late on either account before now.

This is how HAMP deals with default;


If a borrower defaults on a loan modification executed under HAMP (delinquent by the equivalent
of three full monthly payments at the end of the month in which the last of the three delinquent
payments was due), the loan is no longer considered to be in “good standing.” Once lost, good
standing cannot be restored even if the borrower subsequently cures the default. A loan that is
not in good standing is not eligible to receive borrower, servicer or investor incentives and
reimbursements and these payments will no longer accrue for that loan. A loan permanently
modified under HAMP Tier 2 that loses good standing is not eligible for another HAMP
modification of that loan. A loan permanently modified under HAMP Tier 1 which loses good
standing may be eligible to receive a HAMP Tier 2 modification if the evaluation for HAMP Tier 2
is at least 12 months after the HAMP Tier 1 Modification Effective Date or the borrower has
experienced a change in circumstances.

A servicer may not re-modify a loan that has received a HAMP permanent modification until either
(i) the loan has lost good standing or (ii) more than five years has passed since the effective date
of the permanent modification. Notwithstanding this prohibition, a servicer may apply a principal
curtailment at any time following a HAMP modification. Additionally, servicers may not refer a
loan with a HAMP permanent modification to foreclosure until the loan has lost good standing.

In the event a borrower defaults on the modified loan, the servicer must work with the borrower to
cure the modified loan. If this is not possible the servicer must- evaluate the borrower for loss mitigation
alternatives, such as HAFA, prior to commencing foreclosure proceedings.

In any event, a servicer cannot refer a HAMP-modified first lien to foreclosure until the loan loses
good standing under HAMP.

[betterday]

Cat BEG TO DIFFER regarding "Gross income is the only clean way to"

A Requirement of employment is participation in 401 A plan for SFCC and ALL state of NM higher ED employees

9.3% off the gross paycheck

-------------------

Defaulting on a HAMP is not the same as being denied a HAMP.

According to the guidelines;

A borrower that rejects a modification offer for a mortgage loan under HAMP is not eligible for future consideration under either Tier of HAMP for the same mortgage loan unless the borrower experiences a change in circumstance. However, the mortgage loan must be considered for other available loss mitigation options to surrender the property including HAFA. A borrower may reject a modification offer (i) orally or in writing; (ii) by failing to make the first TPP payment; (iii) by failing to execute and return the permanent modification agreement after having made all required TPP payments.


Also:

Gross Income is used because everyone has different obligations that are personal, and most are elective in a paycheck, depending on the dependents that you claim, and any insurance that you choose as well as retirement accounts, again, this is a personal choice that not everyone chooses. Because of this, net income is way too flexible, one could max out 401K, healthcare, life insurance, savings plans. Gross income is the only clean way to calculate income, putting everyone on an even keel prior to any personal electives. Even if they could use net income the payment percentage would not remain as low as 31 percent. This is why the percentage is only 31 percent for HAMP, that is considered affordable. It is also why it is only figured for the payment of PITI and HOA if applicable versus gross income, and why expenses are not a part of that calculation at all.

Monthly Mortgage Payment:

The monthly mortgage payment used in calculating any monthly mortgage payment ratio in either HAMP Tier 1 or HAMP Tier 2 includes the monthly payment of principal, interest, property taxes, hazard insurance, flood insurance, condominium association fees and homeowner’s association fees, as applicable, regardless of whether these expenses are included in the borrower’s current mortgage payment. It also includes any escrow payment shortage amounts that are subject to a repayment plan.

The monthly mortgage payment does not include mortgage insurance premium payments or payments due to holders of subordinate liens.


They will only consider certain expenses in the back end debt ratio which if it is over 55 percent, then counseling will be required.

Verifying Monthly Gross Expenses

Servicers must verify the borrower’s monthly gross expenses as reported by the borrower on the
RMA using the credit report, tax returns or transcripts and other verification documentation
provided by the borrower. Monthly gross expenses include the monthly charges described in the
following list:

 The monthly mortgage payment for the borrower’s principal residence including taxes,
property insurance, homeowner’s or condominium association fee payments and
assessments related to the property whether or not they are included in the mortgage
payment. This information must be verified even if the borrower is seeking a modification
of a rental property

 If applicable, the monthly mortgage payment for the rental property that the borrower
seeks to modify, including taxes, property insurance, homeowner’s or condominium
association fee payments and assessments related to the property whether or not they
are included in the mortgage payment.

 Any mortgage insurance premiums.

 Monthly payments on all closed-end subordinate mortgages.

 Alimony, child support and separate maintenance payments with more than ten months
of payments remaining, if supplied by the borrower.

 Car lease payments, regardless of the number of payments remaining.

 Monthly payments on revolving or open-end accounts, regardless of the balance. In the
absence of a stated payment, the payment will be calculated by multiplying the
outstanding balance by three-percent.

 Aggregate negative net rental income from all investment properties owned, if supplied
by the borrower.

 Monthly mortgage payment(s) for a second home or seasonal rental property including
principal, interest, taxes and insurance and, when applicable, leasehold payments,
homeowner association dues, condominium unit or cooperative unit maintenance fees,
but excluding unit utility charges.

 Payments on all installment debts with more than ten months of payments remaining,
including debts that are in a period of either deferment or forbearance. When payments
on an installment debt are not on the credit report or are listed as deferred, the servicer
must obtain documentation to support the payment amount included in the monthly debt
payment. If no monthly payment is reported on a student loan that is deferred or is in
forbearance, the servicer will obtain documentation verifying the proposed monthly
payment amount, or use a minimum of 1.5 percent of the balance.

 Monthly payment on a HELOC will be included in the payment ratio using the minimum
monthly payment reported on the credit report. If the HELOC has a balance, but no
monthly payment is reported, the servicer will obtain documentation verifying the
payment amount, or use a minimum of one percent of the balance.

A servicer should not consider expenses of non-borrower household members when calculating monthly gross expenses.

[survivalmode]

Thanks Cat. Please forgive my confusion here. So if we are unable to make the HAMP payments, would Ocwen be able to consider us for an inhouse modification? Or would they be precluded from even doing that based on the HAMP guidelines?

[Cat Damiano]

Cat BEG TO DIFFER regarding "Gross income is the only clean way to"

A Requirement of employment is participation in 401 A plan for SFCC and ALL state of NM higher ED employees

9.3% off the gross paycheck

-------------------

What is meant by the only clean way is that it puts every one on an even keel. As I had posted above, even if they could use net income the payment percentage would not remain as low as 31 percent, and may calculate to the same amount. All of the payments under a HAMP modification are brought down to the 31 percent.

[Cat Damiano]

Thanks Cat. Please forgive my confusion here. So if we are unable to make the HAMP payments, would Ocwen be able to consider us for an inhouse modification? Or would they be precluded from even doing that based on the HAMP guidelines?

They may not, and that is a risk that you would be taking by defaulting. They will follow the steps I outlined, in my previous post if you default on the HAMP modification. The issue here is that you DO qualify for a HAMP modification, you were not denied the HAMP. The payment at 31 percent of the gross income is what all HAMP modification PITI payments are taken down to. This is considered affordable for a mortgage payment. If it is back end debt that is causing the hardship, ie, over 55 percent of the gross income, then a modification will not be able to help and counseling will be recommended.

[kelisad]

Survival, I got a HAMP modification last year and I was told the same thing you were, that only after we made all trial payments would the terms be sent to us. However, we got them after we made the first payment.

[survivalmode]

I am just so unsure about what to do. It seems like declining outright may be worst for us going forward than attempting to make the payments and then falling behind. We plan to begin the 2nd settlement plan as laid out on this website immediately because even though we would be eligible for a 2MP if we got throught the HAMP trial period, I don't think SLS participates in that program so it does us no good.

[Cat Damiano]

I am just so unsure about what to do. It seems like declining outright may be worst for us going forward than attempting to make the payments and then falling behind. We plan to begin the 2nd settlement plan as laid out on this website immediately because even though we would be eligible for a 2MP if we got throught the HAMP trial period, I don't think SLS participates in that program so it does us no good.

If you are planning to follow the strategy for settling the second, then the rule of thumb that members have been doing is to get the permanent modification in place on the first lien prior to working the strategy on the second lien. SLS does participate in HAMP, so you can make that decision after getting the permanent modification on the first lien.

[survivalmode]

Thanks. I checked the Making Home Affordable website and SLS is not listed as a servicer that participates in 2MP. We will begin the strategy this month with SLS and try to make it work with the HAMP. Ocwen told me on Monday when I called that I was approved but it's not showing that on the website nor have I received any paperwork. I'm so nervous about the whole thing but I think we are going to go ahead and take the house of the market and try to work everything out.

[Cat Damiano]

Thanks. I checked the Making Home Affordable website and SLS is not listed as a servicer that participates in 2MP. We will begin the strategy this month with SLS and try to make it work with the HAMP. Ocwen told me on Monday when I called that I was approved but it's not showing that on the website nor have I received any paperwork. I'm so nervous about the whole thing but I think we are going to go ahead and take the house of the market and try to work everything out.

You may just want to hold off on the direction you are going to take with the second lien, just until the first line modification is made permanent.

[danskkn]

In 2008 I was approved for a HAMP modification with another lender. My loan was then switched to OCWEN. While the HAMP modification helped, my home is still so far underwater that it would be impossible to sell without a short sale. I did apply for a home mod with OCWEN, but was told that because I already have HAMP, I do not qualify for their in-house mod. Do I have any other options to pursue for a loan modification or is a Short Sale really my only way to go? Since the first modification, my income has reduced and again my payments are well over the 31% of my gross income.
Thanks,

[Cat Damiano]

In 2008 I was approved for a HAMP modification with another lender. My loan was then switched to OCWEN. While the HAMP modification helped, my home is still so far underwater that it would be impossible to sell without a short sale. I did apply for a home mod with OCWEN, but was told that because I already have HAMP, I do not qualify for their in-house mod. Do I have any other options to pursue for a loan modification or is a Short Sale really my only way to go? Since the first modification, my income has reduced and again my payments are well over the 31% of my gross income.
Thanks,

Welcome to the form and thank you for joining.........

You can also try NACA for a modification which many on the forum have turned to if they want to stay in the home. Here is the information;;

https://www.naca.com/nacaWeb/index_main.aspx

[TomEason]

In 2008 I was approved for a HAMP modification with another lender. My loan was then switched to OCWEN. While the HAMP modification helped, my home is still so far underwater that it would be impossible to sell without a short sale. I did apply for a home mod with OCWEN, but was told that because I already have HAMP, I do not qualify for their in-house mod. Do I have any other options to pursue for a loan modification or is a Short Sale really my only way to go? Since the first modification, my income has reduced and again my payments are well over the 31% of my gross income. Thanks,

Thanks for your post. What is your goal? If you want to keep the property for quite awhile, you might visit The HAMPster Wheel Game thread. If you want out, I recommend you simply let it go to FC in lieu of attempting a SS. But in so doing, I recommend you try to live rent free in the property for as long as possible. Again, you might visit The HAMPster Wheel Game thread. Good luck to you. The HAMPSTER Wheel Game

[atdbeach]

Just a follow up for us-We made our last of the 3 trial payments on 5/1/13 and our loan is now being reflected as being in permanent SAM modification. Our interest rate went from an adjustable 9.5% to a fixed 2.375% rate. Our monthly payments went from $5324 a month to $2509 a month and the forgiveness amount dropped what we owe to the going housing rate in our area/development. It was a long (6+ months) and VERY frustrating process, but perseverance paid off in the end. There were so many times that we just wanted to throw in the towel and walk away because dealing with this company is maddening, but looking back, I am so glad that we didn't. My advice to anyone looking for a modification because they don't want to lose their home is be persistant with Ocwen in all your dealings. We were so fortunate to get an incredible RM (and an English speaking one at that), and I'm convinced that without her, I'm not so sure our ending would have been so favorable. We are no longer "house poor" and finally rest easy at night.

[Cat Damiano]

Just a follow up for us-We made our last of the 3 trial payments on 5/1/13 and our loan is now being reflected as being in permanent SAM modification. Our interest rate went from an adjustable 9.5% to a fixed 2.375% rate. Our monthly payments went from $5324 a month to $2509 a month and the forgiveness amount dropped what we owe to the going housing rate in our area/development. It was a long (6+ months) and VERY frustrating process, but perseverance paid off in the end. There were so many times that we just wanted to throw in the towel and walk away because dealing with this company is maddening, but looking back, I am so glad that we didn't. My advice to anyone looking for a modification because they don't want to lose their home is be persistant with Ocwen in all your dealings. We were so fortunate to get an incredible RM (and an English speaking one at that), and I'm convinced that without her, I'm not so sure our ending would have been so favorable. We are no longer "house poor" and finally rest easy at night.

Congratulations on your permanent modification! That is such great news that you were able to hang in there and achieve a really good modification.