Nov 19 Deadline to Mod. Loan?

[Nekocat]

I was recently on the phone with Countrywide's refi dept, they are sending flyers to existing customers to get us to refinance. So in talking to them, Jennifer the loan consultant said we need to lock in our loan for a 30 year fixed, 10 year interest only at 6.875% with 0 points on a jumbo loan, 80%LTV (we have 90LTV right now, but I can borrow from family for this refi thank Goodness!) by Nov 19 bc the government is instating a new guideline that borrowers must qualify at the highest monthly adjustment, in this case year 11's amortized payment. Has anyone heard of this Nov 19 deadline? Is this offer from Countrywide good? should I do it? I also talked to MrChase a mortgage broker who has been posting here on Moe's site. He says he works with www.Americanfsb.com and my situation looks good. but I don't know. Something about this seems funny perhaps..? any experience or advice from others who have talked to either CW or MrChase would be greatly appreciated.

[Moe Bedard]

I emailed you also on this, just FYI Nekocat.

As far as MR CHASE goes. I do not endorse whatever he is doing. That does not mean that he is shady or misleading anyone. I had invited him here to share some expertise "on the fourm" and teach people about loans and what they can do to help themselves. I have had a few emails where he is actually working with people on loans. There is nothing against the law with that. But I do not want a member from here to contact someone that is for profit and I don't really "endorse them". I'm very particular. Hence the name I chose for the website, LoanSafe.

So, if you use him, it is at your own discretion. Be careful of anyone.

Countrywide, well you probally know how I feel about them. Again, doesn't mean you'll get a sour deal either. Just remember, there are no free loans and they cost you somewhere. Either in the rate or in the fees. A no points loan, you're most likey taking a hit on your rate.

Meaning they are financing the costs of the fees in your rate. ie: you will pay over the life of the loan as opposed to up front fees at closing.

Why don't you go to Chase and B of A and compare all three banks?

[evel1999]

Like Moe suggested check with several others and compare. Do you want an interest only loan? Can you go FHA or FHA Secure?

What kind of loan do you have now? ARM? Interest only? Fixed rate for 30 years, Pick a payment loan with negitive armortization if you select the lower payment? These are so many different loans now you have to really understand what you are getting. We are all examples of what can happen when you do not.

Most of us did not, and now we are fighting to stay out of forclosure. Lots have already been forclosed on due to this type loan.

Examine the loan you are thinking about really good, as that is the problem most of us have run into now with the loans we have. We did not really understand them, and most of us were not aware they could jump up in payments as high as they have with no end in sight and no way out of them.

Ask what happens on the loan when the 10 years is up if it is interest only for 10 years. Even tho your rate may be fixed for 30 years and stay the same, if you have paid nothing on the principal for 10 years, they will rearmortize the loan over 20 years at that current rate (unless it is an adjustable) and your payments will be higher. How much higher? Do you want to just pay interest only and nothing on the principal during this 10 years? Just make sure you understand the terms of the loan.

Do you want your payment to go up in the 11th year? Ask what they mean by this. Is it an ARM that will adjust and tied to an index and margin?

As far as having to qualify for the higher payments, I think that may already be in effect with most mortgage compaines now because of this sub-prime mess and forclosures happening all the time, most have already tightened up the loan standards to where you have to qualify for the higher payments.

Are you prepared for the payments to go up?

Can you qualify for the standard fixed rate loan for 30 years right now?

For the ones who can refinance and want to they just need to be sure they understand what kind of loan they are getting and if that is the kind of loan they want.

From my own experience, due to what I have been thru with my loan and the shock of adjusting payments, for myself and my financial situation, if I refinanced, I would have to have the standard 30 year fixed rate where you pay principal and interest for the life of the loan.

Ask all questions and make sure before you refinance that is the type of loan you can live with.

Some interest only loans have adjustments too after the 10 years, not all, but it will pay in the long run to know exactly what kind of loan you are applying for.

For some a Loan Modification will be the answer. They can fix your present loan to a fixed rate, if you have high interest, it may can be lowered. If you are behind in payments they can add those in to the balance. A Loan Modification is similar to a refinance.

Everyone has to decide what is the best course for them to seek.

There is also the FHA Secure program to refinance homeowners out of these ARM. FHA is not credit score driven and they have certain guidelines set up for the FHA Secure that is a little more relaxed that the regular FHA. Regular FHA will be an option to homeowners who are current on their payments where FHA Secure is set up to help homeowners who have fallen behind due to ARM reset.

Hopeful Countrywide is putting programs into place to help homeowners with these loans. There are several on this site now trying to get Loan Modificaitons from Countrywide.

[BnzHC]

November 19th or not, you should be looking at the highest adjustment to the rate for your own financial safety! I am not aware of any such "new rule" imposed by the feds but this will be your financial well-being that matters.

Please post details about your present mortgage terms here so that a thoughtful response can be formulated. In general, if the loan is right for your situation it is worth taking. Be wary of the potential highest rate you may be paying or it can/will turn out to be your own nightmare.