US Bank HAMP principal writedown?

[allllll]

Hello-

1st time poster here and hoping to get some answers. Am about $80K (over 40% of value) underwater on my US Bank Mortgage. Have had a severe decline in income in past few years and have recently applied for HAMP. I have a FHA loan. My ratio is currently WELL above the 31% they look for to qualify-it's closer to 60-70% currently and I have been in the house for almost 5 years.

I have been told that US Bank does not have to offer principal writedown as part of their handling of HAMP. Is this true? I do want to keep the house, but having a loan amount of $241K when it is worth $160K currently, the numbers don't seem to add up to me.

I love to negotiate-is it possible to negotiate a principal writedown? From my research, they can get reimbursed up to .63 per $1 of principal written off by the federal government. Why wouldn't they want to do that versus the alternative, which is me walking away from the house and US Bank eventually selling it for $160K (or less) in foreclosure or shortsale.

Advice? Any would be appreciated.

[Cat Damiano]

Hi allll,


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


The FHA HAMP has different guidelines and they do not include principal reduction. Even on a regular HAMP, principal reductions are few and far between as they are not required in the process to make a payment affordable.

Here is the information on the FHA HAMP as well as the FHA Pre-Foreclosure Sale program;

http://www.hud.gov/offices/hsg/sfh/nsc/rep/hampfact.pdf

http://www.hud.gov/offices/hsg/sfh/nsc/rep/pfsfact.pdf

[allllll]

Hi Thanks for your reply, Cat. I have been told that they are required to process the request in 30-60 days. I am well past that-what recourse do I have, if any?

[Cat Damiano]

Thanks Cat! I guess my researching and hitting the reply was too slow on the uptake, lol.

[Cat Damiano]

Here you can look through the loss mitigation options available for FHA loans and see if you may meet the eligibility for one of them;

FHA-Insured Mortgages

The Federal Housing Administration (FHA), which is a part of the U.S. Department of Housing and Urban Development (HUD), is working aggressively to halt and reverse the losses represented by foreclosure. Through its National Servicing Center (NSC), FHA offers a number of various loss mitigation programs and informational resources to assist FHA-insured homeowners and home equity conversion mortgage (HECM) borrowersfacing financial hardship or unemployment and whose mortgage is either in default or at risk of default.

• Click Here to log onto the NSC Loss Mitigation Programs home page.
• Click Here for answers to Frequently Asked Questions about FHA’s loss mitigation programs.

CONTACT FHA

FHA staff are available to help answer your questions and assist you to better understand your options as an FHA borrower under these loss mitigation programs. There are several ways you can contact FHA for more information, including:

• Call the NSC at (877) 622-8525
• Call the FHA Outreach Center at 1-800-CALL FHA (800-225-5342)
• Persons with hearing or speech impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877-8339.
• Email the FHA Resource Center
• The Online FHA Resource Center

[allllll]

Hello,

After 7+ months of going through the HAMP approval process with US Bank (3 different times consecutively) I was told yesterday that the most recent reason for my denial (and my sole reason this time) was my monthly debt/bills ratio to Income. Has anyone heard of this? Is this valid? I can't find anything definitive online. If this is valid, what is the time frame they look at? My YTD monthly average income (as they had from my documents) was less than my debt/bills (using my CURRENT mortgage payment), but my new YTD monthly average income is more than my monthly debt/bills, and my 3 and 6 month average monthly income is significantly more.

Any guidance would be appreciated-

[Cat Damiano]

Hello,

After 7+ months of going through the HAMP approval process with US Bank (3 different times consecutively) I was told yesterday that the most recent reason for my denial (and my sole reason this time) was my monthly debt/bills ratio to Income. Has anyone heard of this? Is this valid? I can't find anything definitive online. If this is valid, what is the time frame they look at? My YTD monthly average income (as they had from my documents) was less than my debt/bills (using my CURRENT mortgage payment), but my new YTD monthly average income is more than my monthly debt/bills, and my 3 and 6 month average monthly income is significantly more.

Any guidance would be appreciated-

You have an FHA loan, which you have not mentioned in this post, the regular HAMP guidelines do not apply to FHA loan, FHA has their own guidelines. You may want to contact the National Servicing Center that I posted for you here in your original thread. There are brand new changes to the FHA HAMP guidelines that are being made currently that eliminate this reason for denial that you are being given and if your lender is not beginning to implement those changes, you may want to contact FHA.

You can reference HUD MORTGAGEE LETTER 2012-22 dated November 16, 2012 to you lender. The lender is to utilize these changes no later than 90 days from that November date, so the lender would have already received this letter for FHA loans that they service.


Here is what has changed;


The specific changes to FHA’s existing Loss Mitigation options include the
following:

 Eliminating the FHA-HAMP maximum Back End Debt-to-Income Ratio
requirement of 55 percent;
 Eliminating the 12-month restriction on the amount of principal, interest,
taxes and insurance (PITI) that may be included in an FHA-HAMP Partial
Claim;
 Eliminating the FHA-HAMP eligibility requirement that the FHA-insured
mortgage be no more than 12 full payments past due;
 Streamlining FHA’s Loss Mitigation Home Retention Option priority order
by replacing its current 4-tier incentive structure with a 3-tier incentive
structure, consisting of Special Forbearances, Loan Modifications, and FHA-HAMP;
 Redefining “Special Forbearance” to apply only in cases where the mortgagors are unemployed;
 Permitting mortgagors to receive a Loan Modification or FHA-HAMP only once in a 24-month period;
 Expanding FHA-HAMP so that it now consists of a stand-alone Modification, stand-alone Partial Claim, or a combination of a Loan Modification and Partial Claim;
 Permitting those mortgagors who were initially unsuccessful in completing Trial Payment Plans to re-apply for standard loan modifications or FHA-HAMP if their financial circumstances have changed since their initial application for assistance; and
 Defining “surplus income percentage” as surplus income divided by net income (i.e., net take-home income).

[allllll]

Thanks for sharing this. I was not aware of back end DTI and what exactly it meant. What is most frustrating is that the "rules" are not clear. What are any other reasons to deny an FHA HAMP at this point?

[Cat Damiano]

Thanks for sharing this. I was not aware of back end DTI and what exactly it meant. What is most frustrating is that the "rules" are not clear. What are any other reasons to deny an FHA HAMP at this point?

There still are eligibility requirements;

In order to qualify for a Loan Modification, a defaulting mortgagor must meet all of the following criteria:


 The household or mortgagor(s) has experienced a verifiable loss of income or increase in living expenses;
 One or more mortgagor(s) is currently employed with stabilized, surplus income;
 The mortgagor’s surplus income is at least the greater of $300 or 15 percent of net monthly income;

 85 percent of the mortgagor’s surplus income is insufficient to cure arrearages within six months;
 The mortgagor’s monthly PITI mortgage payment can be reduced by the greater of 10 percent of the original monthly mortgage payment amount or $100, as a result of the mortgagee setting the interest rate at the Market Rate1 and amortizing the new loan over 30 years;
 The mortgagor has successfully completed a 3-month Trial Payment Plan based on the reduced mortgage payment amount or a 4-month Trial Payment Plan in cases of imminent default; and
 The mortgagor has not received a Loan Modification or FHA-HAMP in the previous 24 month period.

[allllll]

What does "The mortgagor’s surplus income is at least the greater of $300 or 15 percent of net monthly income" mean exactly?

[PatZZ]

What does "The mortgagor’s surplus income is at least the greater of $300 or 15 percent of net monthly income" mean exactly?

Per HUD, here's an exp;lanation of surplus income:

"Surplus Income." Certain FHA loss mitigation options, such as formal
forbearance plans and the standard (non-FHA-HAMP) loan modification,
require that homeowners have "surplus income." FHA defines surplus
income as the monthly amount left over after the homeowner pays "normal
monthly living expenses (food, utilities, etc.) including debt service
on the mortgage and other scheduled obligations."[18] Prior to
Mortgagee Letter 2012-22, FHA allowed servicers some discretion in
determining the requisite amount of surplus income needed for
eligibility for a particular loss mitigation option. The new guidelines
formalize surplus income determinations. For example, for the standard
FHA loan modification the homeowner must have surplus income that is at
least the greater of $300 or 15% of net income. Many homeowners facing
foreclosure will simply not have surplus income of this kind. For this
reason, the standard FHA loan modification will not be an option for
many delinquent homeowners. However, homeowners without surplus income
are eligible to be considered for the FHA-HAMP options.


Under the new FHA-HAMP, homeowners who basically have no income left over after paying their bills CAN still qualify.

Since you can ask questions about FHA all day until you are purple in the face, you should take the time to research these recent changes in FHA-HAMP so YOU know whether you qualify. I assure you that the vast majority of people working in the servicing depts are morons. Even worse, they are morons who could care less about your home. THey will make a mistake and tell you that you don't qualify and will suffer NO PENALTY for making the mistake.

FHA can be confusing if you don't take the time to understand it. And FHA keeps changing the rules. The servicers can't keep up. So, you gotta make sure you keep up. Don't rely on them to tell you if you qualify. All of the info is online for you to see. Unlike mods for Fannie/Freddie, the rules for FHA-HAMP are straightforward. Once you understand how to do the calculations, everyone should get the same result. You either qualify or not.

As I see it, the major hurdle you must pass to get a FHA-HAMP mod is be sure your modified payment will not exceed 40% of your gross monthly income. This modified payment must include any association dues. Do that calculation now. If you are short on income, start looking for a part time job or get a boarder. If you submit your paperwork & it shows you don't have enough income, you can't re-apply unless you have a change in circumstances. Which means if you find a way to increase your income, you can re-apply.

Here is a link where a NY legal group details how to see if you qualify for FHA mods. GREAT info:
http://www.mfy.org/wp-content/upload...sers-Guide.pdf

This document even has a link to a worksheet you can use to do the calculations.

[Evan Bedard]

Great information Patzz, thanks for sharing this with the community!

[PatZZ]

Great information Patzz, thanks for sharing this with the community!

I want to help anywhere I can Evan. So many of those who have jobs where they are supposed to help are almost worthless. They know not what they speak and seem to have so little compassion for people losing their homes. Hard to believe.

If I had a job as a Housing Counselor, I would never sleep because I would spend all my time trying to save some family's home. In fact, it's a position I would love to have and I would work like a farm horse..

To all: On my prior post, I forgot to write out the word "percent." So, the statement should read: "....least the greater of $300 or 15 percent of net income." Sorry.

[Cat Damiano]

I want to help anywhere I can Evan. So many of those who have jobs where they are supposed to help are almost worthless. They know not what they speak and seem to have so little compassion for people losing their homes. Hard to believe.

If I had a job as a Housing Counselor, I would never sleep because I would spend all my time trying to save some family's home. In fact, it's a position I would love to have and I would work like a farm horse..

To all: On my prior post, I forgot to write out the word "percent." So, the statement should read: "....least the greater of $300 or 15 percent of net income." Sorry.

Have you looked into helping? The individual counties of many of the states are usually in need of help with foreclosure counseling as well as HUD or NACA.

[PatZZ]

Have you looked into helping? The individual counties of many of the states are usually in need of help with foreclosure counseling as well as HUD or NACA.

I am limited as to the work I can di if I can't work from home. I have a disability that prevents me working most jobs. But prior to getting to the stage I am now with my illness, I did look into it. Perhaps where you are they need help, but I could not find anyone in my area who was hiring. OR, they weren't interested in hiring me. :-( Over the years, I have spoken to numerous housing counselors and it was the odd one who had any background in finance or mortgages. I kinda wonder if they prefer job candidates not have experience. An ex-coworker went from the mortgage business to do counseling for a community group and she is the only one out of 10 with any experience. IMO, homeowners are not being properly counseled if the counselor does not understand mortgages. They are giving out a ton of bad information.

Though I think their business model may be to pull bodies off the street (so to speak) and pay them $30,000. In which case, you get what you pay for.

The article below states: "After speaking to several housing counselors we learned that most have absolutely no knowledge of the basic mechanics of 21st century mortgage lending." THIS is a problem and does a severe injustice to homeowners.

http://www.mfi-miami.com/2013/04/its...sing-agencies/

[Cat Damiano]

I am limited as to the work I can di if I can't work from home. I have a disability that prevents me working most jobs. But prior to getting to the stage I am now with my illness, I did look into it. Perhaps where you are they need help, but I could not find anyone in my area who was hiring. OR, they weren't interested in hiring me. :-( Over the years, I have spoken to numerous housing counselors and it was the odd one who had any background in finance or mortgages. I kinda wonder if they prefer job candidates not have experience. An ex-coworker went from the mortgage business to do counseling for a community group and she is the only one out of 10 with any experience. IMO, homeowners are not being properly counseled if the counselor does not understand mortgages. They are giving out a ton of bad information.

Though I think their business model may be to pull bodies off the street (so to speak) and pay them $30,000. In which case, you get what you pay for.

The article below states: "After speaking to several housing counselors we learned that most have absolutely no knowledge of the basic mechanics of 21st century mortgage lending." THIS is a problem and does a severe injustice to homeowners.

Is It Time To Say Sayonara To CRA Funded Housing Agencies?

Oh, I am sorry to hear that where you live they do not have some sort of counseling that you would be able to help with. Unfortunately due to being sixth in the nation for foreclosures, CO has their very own HOPE hotline and each of the counties have their own housing authority to help with the foreclosure process if one wants to stay in their home or wants to sell. I agree that it does help to know the ins and outs of mortgages and that many counselors do not.

[PatZZ]

@Cat Damiano

My state is even worse than yours, but our Governor only pretends to be concerned about the problem. He sets the mood. He didn't pretend to do anything until the press caught him at just the right moment to get him on video sticking his foot in his mouth. Our governor thinks anyone having money or foreclosure problems is there due to their own fault. He has diverted funds intended for foreclosure assistance over to other areas to help balance his budget.

It is sad that whether a homeowner is treated fairly or similarly might hinge on what state he/she lives in, or who their lender/servicer is. Obama keeps pushing programs to help people who have one of the big giants as their servicer. To heck with the millions who have one of the smaller banks. But no bank should be allowed to get away with the sins they committed - regardless of size.

Pardon my little rant.

[Cat Damiano]

@Cat Damiano

My state is even worse than yours, but our Governor only pretends to be concerned about the problem. He sets the mood. He didn't pretend to do anything until the press caught him at just the right moment to get him on video sticking his foot in his mouth. Our governor thinks anyone having money or foreclosure problems is there due to their own fault. He has diverted funds intended for foreclosure assistance over to other areas to help balance his budget.

It is sad that whether a homeowner is treated fairly or similarly might hinge on what state he/she lives in, or who their lender/servicer is. Obama keeps pushing programs to help people who have one of the big giants as their servicer. To heck with the millions who have one of the smaller banks. But no bank should be allowed to get away with the sins they committed - regardless of size.

Pardon my little rant.

I am personally very familiar with NJ.

[allllll]

Thanks so much for sharing this! I am actually at the 1 year+ mark trying to get approved for modification with US Bank. I have complaints out to HUD servicing center as well as the CFPD, or whatever that new federal agency is. I actually got a response from my CFPD complaint that was completely inaccurate about documents submitted, timing etc that I actually had to go line by line, dispute each statement and refer to emails where I submitted documents (bank statements, paystubs, RMA forms etc) that I PDFed and attached. I have emailed the president of US Bank (if I guessed his email accurately) as well as the secretary of HUD to try to get some traction. Does anyone else have any suggestions on who I can contact?

[PatZZ]

Thanks so much for sharing this! I am actually at the 1 year+ mark trying to get approved for modification with US Bank. I have complaints out to HUD servicing center as well as the CFPD, or whatever that new federal agency is. I actually got a response from my CFPD complaint that was completely inaccurate about documents submitted, timing etc that I actually had to go line by line, dispute each statement and refer to emails where I submitted documents (bank statements, paystubs, RMA forms etc) that I PDFed and attached. I have emailed the president of US Bank (if I guessed his email accurately) as well as the secretary of HUD to try to get some traction. Does anyone else have any suggestions on who I can contact?

Did you stop to do the calculations to see if you qualify under the new guidelines? That would be the 1st thing I would do. If/when your complaint does cause someone to actively respond, you want to be able to say that you know you qualify. If you don't qualify, it doesn't matter who you complain to.

Shouldn't take you that long to figure it out. See my post #11 for a link to a form you can use. You cannot get a principal writedown with FHA - mainly due to the design of FHA and the mortgage insurance.

Cat Damiano provided contact numbers in post #5. If you call FHA at the 800-225-5342 number, someone will take down your basic info. Then a higher level person will call you back to get more detail. This person at FHA has on file a specific individual at each FHA-approved lender whom they can call to follow up on your complaint. The Secretary of HUD will probably care less - IMO. Reaching out to the very top might work sometimes in private industry, but our government will ignore us in a heartbeat.

[allllll]

thanks for your reply. I am at the 1+ year mark in the process. I can't get the guy at HUD who is assigned to my case to call me back, and the "default escalation department" for complaints at US Bank basically regurgitates the same facts as before (even though I sent copies of emails and documents to dispute). I finally have what is considered a "complete package" and am in underwriting review. (it has taken me 5+ months to get what they consider a "complete package"). At this point, I know I qualify financially, and if I don't get approved, it will be because of pure chicancery.

[PatZZ]

thanks for your reply. I am at the 1+ year mark in the process. I can't get the guy at HUD who is assigned to my case to call me back, and the "default escalation department" for complaints at US Bank basically regurgitates the same facts as before (even though I sent copies of emails and documents to dispute). I finally have what is considered a "complete package" and am in underwriting review. (it has taken me 5+ months to get what they consider a "complete package"). At this point, I know I qualify financially, and if I don't get approved, it will be because of pure chicancery.

Don't forget there is a difference between "HAMP" for conventional Loans, and "HAMP for FHA."

I just scanned that link you gave and it looks like helpful info overall, but it appears it is for a HAMP conventional loan. Did you try the link I shared in post 11 ? You say you know you qualify financially and I bet you do. The banks are full of crap.

You should phone HUD again if no one called you back. You have to be a strong, persistent advocate for yourself.

[allllll]

Hello thanks for your reply. The link in post 11 is dead, so I tried finding some alternatives online. am probably on voicemail 7 with the HUD guy....I will continue to plug away at it.

[Cat Damiano]

Hello thanks for your reply. The link in post 11 is dead, so I tried finding some alternatives online. am probably on voicemail 7 with the HUD guy....I will continue to plug away at it.

They may have moved it, here it is again;

http://www.mfy.org/wp-content/upload...sers-Guide.pdf