Success! Upside down loan refinance with GMAC!

[Klinger]

Hello I am new to the board but I have read many posts and find the information very useful.

Here are my details:

1st mortgage with GMAC
6% 30 year fixed
$379,000

2nd mortgage with GMAC
9.8% amortized over 30 years but due with a balloon payment in 15 years
$85,000

This page discusses both the loan modification and loan refinancing programs detailed under the Obama Plan: Homeowner Help

It appears that I qualify for both and I am not sure which is best for me. I just called GMAC and apparently even though the website says to call "to talk to a loan agent about refinancing your mortgage" they are still not ready and the guy Kyle that I talked to told me to call back in about three weeks. He also told me that I have to first try to refinance my loan and that I will only be eligible to modify my loan if I am unable to refinance.

Does this sound right or does this guy not know what he is talking about?

[Dan Bailey]

Klinger,
Glad you found the forum and posted.

Since the program is only 2 weeks old, many lenders are not yet set up to deal with it.

[dasbof]

It looks like it will take some time. According to the Making Homes Affordable website they think most major servicers will work with the new plan. They have a section on the website that lists participating servicers and so far no servicers are listed. I hope everyone keeps on top of this and speeds up this new plan. People are losing their homes and they must get moving!

[Klinger]

I have been calling GMAC regularly and I was last told that they would be ready to implement the Make Home Affordable Plan (Obama's foreclosure plan) on April 6th. Today I called again and now they are saying that they will have more info in mid to late April.

If you are trying to do a Loan Mod, you can download forms off the GMAC website and fill them in so you have them ready.

If you are trying to do a Loan Refi, then all you can do is have your tax documents, income statements, etc. ready.

Has anyone had a different experience where someone actually knew something and could do something to help you at GMAC?

[Moe Bedard]

Are you using this number?

If you meet the guidelines for the Making Home Affordable Modification, call 1-866-899-5308 to talk to a customer service representative about modifying your mortgage loan.

Homeowner Help

[Klinger]

Yeah, when I call that number and actually get to the refinancing people they still say that they do not know anything yet. They say that they are implementing it and have not received any new information.

[Moe Bedard]

the number I posted above is for the modification program............the refi program is a different number...........

You may qualify for a MORTGAGE REFINANCE if:

You have a Fannie Mae or Freddie Mac mortgage loan on your primary residence, second home or investment property. Please call us at the number below if you need help determining the type of mortgage loan you have.

You owe no more on your 1st mortgage than 105% of your home's current value. (Example: you owe $105,000 on a home with a current market value of $100,000.)

You are current on your existing mortgage.

You are interested in a new fixed or adjustable loan at current low rates.
Note: Refinancing fees may apply.

If you meet all of the guidelines above, call 866-964-9754 to talk to a loan agent about refinancing your mortgage.

[Klinger]

Thank you ***. I have also read that same page at least 10 times and it makes it look like they surely have everything sorted out and ready to go. The reality though is different. When you call them up and talk to them, they do not have their information straight and eventually tell you that they are not ready to start the process and to call back in a few weeks.

I am wondering if this is what is happening to everyone or if I am just talking to the wrong people.

[~Jess~]

I applied for the MHAP thru GMAC. I called on March 4th and they mailed out a workout package to me (the same docs that are now available for printing on their website). I returned the docs. I then received an automated call about a week later saying that they'd received my workout package and I'd hear back within 5 business days. 5 days came and went and I didn't hear back, so I called. They said they have us in the system, but that they are literally receiving thousands of applications each day so they are really behind. He said I should hear back early this week. He did seem to know what he was talking about though.

I don't qualify for a refi since we're upside down on our house, so maybe that makes a difference. I read somewhere that the refinance program is taking longer to implement.

The original number I called to request the workout package was 1-800-850-4622. The followup number that came with my workout package is 1-866-262-5363.

Good luck!

[Klinger]

Hi Jess,

Thanks for your post. From what I understand, you CAN qualify for a refi even if you are underwater. Consider this scenario:

You have a first and second mortgage. The first mortgage is $400,000 and the second mortgage is $100,000. Assume that the house appraises for $400,000. You are upside down by $100,000 but you totally qualify. The reason why is stated here.

It says "You owe no more on your 1st mortgage than 105% of your home's current value. (Example: you owe $105,000 on a home with a current market value of $100,000.)"

So, according to this, you owe less than 105% of your home's current value on your FIRST mortgage (as opposed to your 1st and 2nd mortgages combined).

The problem, as I understand it though, is that if you can qualify for a refi, they will not allow you to do a loan mod. I don't know HOW upside down you are but I would check this out because if you do qualify for a refi, you could be waiting for nothing.

At the moment, I am actually on the borderline between qualifying for the refi and the loan mod. All the foreclosures in my neighborhood keep bringing my home's price down and now I think that I will HAVE to do a loan mod.

I wish you and I both good luck! Please keep me posted on your progress and I will do the same.

[Klinger]

My wife and I are both teachers that have been saving up money for a possible impending layoff. We have somewhere near 6 months of expenses, which is great, but not nearly enough if you get laid off with no hope of getting a new teaching job for some time.

My concern is that when I am filling out the financial analysis documents (in this case for GMAC) it will look fishy if I am applying for a loan mod and I have a chunk of money in my savings. I am concerned that they will say something like "If this guy has money in savings, why is he applying for a loan mod?"

Does anyone know if this is an automatic disqualification or if maybe the money should be explained in the hardship letter?

Thanks!

[kat10]

Hi. I'm not sure if they could have done anything, but didn't take the chance so I cleared our savings. However, I set up a new acct for money set aside each month for our mortgage pymt during the mod process. We declared the new acct. on the financials.

[~Jess~]

Originally Posted by Klinger

Hi Jess,

Thanks for your post. From what I understand, you CAN qualify for a refi even if you are underwater. Consider this scenario:

You have a first and second mortgage. The first mortgage is $400,000 and the second mortgage is $100,000. Assume that the house appraises for $400,000. You are upside down by $100,000 but you totally qualify. The reason why is stated here.

It says "You owe no more on your 1st mortgage than 105% of your home's current value. (Example: you owe $105,000 on a home with a current market value of $100,000.)"

So, according to this, you owe less than 105% of your home's current value on your FIRST mortgage (as opposed to your 1st and 2nd mortgages combined).

The problem, as I understand it though, is that if you can qualify for a refi, they will not allow you to do a loan mod. I don't know HOW upside down you are but I would check this out because if you do qualify for a refi, you could be waiting for nothing.

At the moment, I am actually on the borderline between qualifying for the refi and the loan mod. All the foreclosures in my neighborhood keep bringing my home's price down and now I think that I will HAVE to do a loan mod.

I wish you and I both good luck! Please keep me posted on your progress and I will do the same.

We don't qualify for the refi because we are much more underwater on our first mortgage than 5%. We owe $225k on our first and our house is worth maybe $180k. We also owe an additional $33k on our second thru Wells Fargo, but they've already modified that loan for us.

[CW California]

My personal opinion is that everyone needs an emergency fund. I believe the banks would be in agreement and would be more likely to decline if you had substantial wealth.

[girlsrstrong]

I have been trying to modify with GMAC also. At first I was getting automated calls stating that I would hear something in 5 business days. Later, when I'd call, the GMAC rep would tell me I'd hear something in about 2 weeks. After than I was told it takes 3-4 weeks. I had my current application in by March 4 and added the IRS form later.

To date I am only told that my case is being reveiwed and that talking directly with the analysts who review is not possible.

[osfan]

With my new recent GMAC MHAP app, it states 10 business days to inform you that they have received the packet and then within 30 days (it doesn't say business days) to notify you of what mod is available to you. Hopefully you are close

[Klinger]

I wanted to let you know that there is hope that some of these companies are getting their acts together. GMAC finally is implementing refinancing under the Make Home Affordable Plan.

Here are my details:
1st - $378,000 @ 6% (30 year fixed)
2nd - $80,000 @ 9.8% (30 year fixed but balloon after 15)

My home is probably worth $330,000 and there is a similar foreclosure selling for $270,000. It sounds pretty hopeless that I would be able to refinance even using the 105% valuation... but guess again!

The short version...
I am refinancing my 1st at 4.875% and it will save me $400 a month!

The long version...
I called up GMAC and instead of getting bounced around I got transferred to a guy who clearly was getting some sort of commission for my business because he REALLY wanted to work with me. He said GMAC just gave him training on the new programs on 4/10/09 and I was talking to him on 4/14/09.

The biggest issue was obviously going to be what my home could appraise for. He told me that GMAC had a range of $330k to $370k but that they would likely need to send an appraiser out to find the actual value. That did not sound promising. Here was the ticket though. Apparently Freddie Mac has a tool called the "Home Value Explorer" which churns out a number for your home value and whatever it says, that is what your home is worth according to them and no other appraisal is needed. That number came out with a surprisingly high $351,034. It is funny that I was happy to hear that considering I paid about $150,000 more than that for the place. Anyway, since the MHAP says my 1st can be no more than 105% of the value of the home, that made the limit for my first mortgage be about $368,000.

That created a hurdle. I owe $378,000 and could only owe a max of $368,000. I had two choices, walk away (I wouldn't qualify for a loan mod) or come up with $10,000 to drop on the 1st mortgage.

Fortunately we had some emergency money in case we got laid off saved up. We could use it to bring down the principal and now we were ready to talk numbers.

He first offered me a 5% rate at 0.575 points. I asked for something better and got offered a 4.875% rate for .95 points. The difference was something like $28 a month saved but over the long run, it would be worth it.

It unfortunately does not directly help my second loan but by refinancing, I can now save $400 a month and apply it to my second to pay it off faster.

I know that my situation is not for everyone but I felt fortunate to be able to refinance into a better rate with -29% equity.

[nathanb]

hi klinger, how did they address the closing costs and points? did you have to come up with that out of pocket, or do they add that to the loan?
thanks!

[kat10]

Klinger,
You did it! Congrats. You saw an opportunity and took it. You got a re-fi, we got a mod. We both won.
k

[Klinger]

Hi Nathan,

That is a good question. I am coming up with all of that out of pocket. I do not know whether it was an option to add it to the loan but I am going to guess it was not an option. The reason I would guess that is that for me in particular, I was already maxed out at 105% LTV. Any increase in loan amount would have been unacceptable.

[Klinger]

Kat10,
Congrats to you to. You actually got the mod? Is there a thread where you posted info about how the process went for you? I am very happy for you and curious to know how it all went down.

[kat10]

Thanks. Yes we got a mod and it's been quite a ride.
Now to stick to our plan to pay the new 30 in 12-15 or less. Afterall,it's not like we're going to be working and paying a freaking mortgage when we are in our 80's! I will financially rebound and when that happens, it will all come back together.
My line of events is under Loan Modification Forum "Wells Fargo QS". I've also posted in others that will help fill any blanks. This forum has become a safe haven for me during the process
k

[nathanb]

Thanks Klinger, can i ask one more queston: Did they re underwrite you like a normal refi? credit had to be acceptable, DTI ratio acceptable, etc...or was it more leaniant since they were on the loan already? I am trying for a loan mod, but the refi is my back up plan.

Thanks...and congrats!