denied a Loan Mod by National City

[mmaxamize1]

Hi All... This is my first post and am looking forward to some help... In a nutshell my story is this:

Due to a pending divorce from my wife I am unable to pay the mortgage on my townhouse. The last mortgage payment was made in OCt 2008... She walked out on me leaving me to pay the mortgage without her income - which is actually a business that we own together. I have a fulltime job that I have been working for the last 21 years. Needless to say my credit, which was about 800 before, is now a whopping 643!!! I can't even borrow a dollar from my neighbor's kid...

Anyway, I applied in Jan 2009 for assistance and was then given a foreclosure date of April 2009. That was put off when the people handing my loan mod at National City (Now PNC) decided to try to modify my loan under OBama's plan. I submitted all the required paperwork and was told I would get my new rate sometime in the middle of August. Yesterday I received a call telling me I was denied the modification because of a high DTI (Debt to income). I owe about $14000 in credit cards.. my income is in the mid 60K range and could be higher if I did overtime (which is always available). I was advised by my divorce attorney to do little to no OT if possible to avoid paying higher child support.. My salary could be about $20K more if I did OT... My mortgage has a rate of 5.875% and is a 30 year fixed. $282K is owed on the original $295K mortgage. I also have a HELOC credit that is owed $34K.. that was used as the additional 10% in my downpayment. It was an 80/10/10... We had the money to put 20% down but was advised to hang-on to the cash.. My mortgage, taxes,
HELOC, & HOA is about $2550 a month... If I sold the house for the bare minimum I would still walk away with about $45K in my pocket BEFORE the broker's commission... I know that I can afford about $1600 a month without really having to disrupt too much in my life. But if necessary I would cut back a little on my retirement contributions...

I thought the whole idea of the MAKING HOME AFFORDABLE PLAN is get the loans modified and give people a realistic chance to save their house. So now I am back to square one and am told that I have to re-apply for other plans offered by them to see if I qualify for any... I feel like they are just wasting my time... If any one has any ideas please tell me... Can I re-apply with other mortgage companies for help?? SHould I just sell it and get out and start all over again once I am done with the divorce??

Any help is appreciated..

-A...

[Moe Bedard]

Hello and thanks for joining the community!

Many homeowners are getting denied under the Obama making home affordable plan because their DTI's are understandably too high. I feel that while the DTI's are where people should be, this is not reality. This would send millions of people to foreclosure tomorrow just because they don't fit the guidelines.

Yeah, in a perfect world everyone would get help and save their homes, but we don't live in that world and this plan is only "voluntary" for servicer to participate.

The good news is that they have other plans and can modify your loan under just plain old loss mitigations that is governed by the pooling and serving agreement that your lender has spelled out to your servicer on what they can and cannot do to help you avoid foreclosure. Most these agreements allow just about anything to avoid default. They could possibly drop your rate to 2% or so and that is what it looks like you need to save your home.

I would try to reapply or get help with www.NACA.com or 888-995-HOPE WWW.995HOPE.ORG

Hope that helps you some.

[NotinPA]

Hello mmaxamize1

Interesting..I am also with National City...but I am NOT trying to save the house.
I am looking to short sale (house has been on the market since Feb, and only one offer that was withdrawn a week later) or doing a Deed-in-Lieu.
They are really taking their time with this and I call about every other day to get a status. I am not sure how this is going to pan out.

[Murray12]

The Obama plan does not take into account your credit card debt. If that is what they are actually telling you then that is wrong. They can calculate your DTI and if it is above 55% then you would require counseling, but that number is not used for qualification.

[Riley18]

Even though the Making Homes Affordable Plan does not use DTI as a deciding factor, it sounds like banks are using it as an excuse anyway. What, if anything, can someone do if the bank uses DTI to deny a loan modification? As I understood the plan, the bank can require an affidavit to prove the borrower has sought financial planning assistance, but anything other than that is not in compliance with the plan.

[sunpup]

You are not alone. Today I read the "Making Home Affordable Program Servicer Performance Records through July 2009" you can see them here:
http://www.treas.gov/press/releases/...lic_report.pdf

National City Bank, who owns National City Mortgage has a 0% rating. The lowest of all the mortgage companies with regards to how many loans they are modifiying. Out of 37,126 eligible loans they could have modified, they only started trial modifications on 4 loans. And they make you jump through hoops filling out forms and waiting for months until the forclosure process gets really far along and then deny it. There are a bunch of tatics many lenders are using to avoid modifying loans, but the government is catching on and starting to put on some heat.
A local nonprofit legal agency where I live is starting to gather cases together against the mortgage lenders who are taking advantage of people like this.
They tell you that forclosure will continue while they are deciding if they will modify your loan and they will only postpone the sale date on your house 48 hours before the sale, if they still havent decided and are working on your packet, and they delay for months and months.
I am on just about the same schedule with National City as you. I originally filed my packet in December and then again when the Obama plan came out in March, except I have less income and a greater mortgage, but no credit card debt. I phoned today and asked them about their 0 percent performance and the person told me they are just starting to change the way they do the loans and are going to play more by the rules of the govt and modify more loans. I am hoping I will be in the initial batch of loans that they modify.
I'd reccomend getting in touch with some legal help to try and have a legal advocate talk with National City and negotiate your loan for you.
If I get denied, I will go that route. I have a friend who had a lawyer negotiate with his lender and his company took $80,000 off of his loan principle balance and lowered his interest rate by a lot so he could afford payments. I'm not sure who his mortgage company is.
So, I'd say, dont give up at this point. I think the tide is changing right now, since the latest statistics have come to light and the government is starting to put some pressure on.
If you are in California and want to get in touch with the nonprofit group who is gathering together people who have been denied and given the run around by the mortgage lenders, I will send you the contact information.

[Murray12]

I am looking for a lawyer in my area Central Mass, but it is easier said then done.

[sunpup]

Here is another interesting article which includes some of the cases that the mortgage servicers are being sued for.
The Associated Press: AP IMPACT: Gov't mortgage partners sued for abuses

[mmaxamize1]

Thanks to everyone that has replied to my original post...

I spoke with a rep at National City today about why my request for help under the Obama Plan was denied. They said that I after being reviewed by the underwriters they have determined that I have too much debt... Well they knew when they received my initial application that I had some credit card debt and was behind in my mortgage by 8 months (now 10)... So I was kind of dumbfounded that it took the underwriter to realize it... I just can't believe it took them 2 months to figure that out!! When I said that I could get the money to pay off my credit cards and lower my debt she replied that I am still behind with my mortgage payments and owe alot of money and I still will not get an approval.. the last time I checked, I thought the whole purpose of this program is for people who are having financial difficulties and that are more than likely in credit card debt and behind on their payments... If I wasn't behind with my mortgage or having credit card debt I wouldn't be applying for assistance!! I just can't believe the answers I am receiving... When I was notified the other day of my rejection under the Making Home Affordable Program I was told my Debt To Income (DTI) ratio is to high but the rep never really explained it me or gave me a detailed explanation. At least the lady I spoke with today did spend about 15 minutes with me and sord of explain their rational for denying my approval into the program... I will call again next week and see if I get any different answers...

Thanks again..