Hamp Questions Pre Filing

[Rc3]

Ok I would love some advice. We had some hard times and in 2010 had to do Chap 7. We kept the house and since things have been ok. Last year my wife's business took a dive and we were lucky to unload it but between her trying to start earning income this year and my work slowing so no OT we found ourselves behind 2 months (2 1/2 really)

Last month we set up a repayment plan which is a normal payment this month and then $900 add for the next 3 months. We recently made our payment this month but unexpected bills then came up so I know there is no chance we make the next months payment (just the extra $900 on top of our regular). I figured we should try for HAMP instead since we are close to making enough to pay everything each month but nothing extra so trying to recoup the back amount owed is impossible. Everything else is current, the late fee for the mortgage is the same as any small payment so it makes sense plus that is already noted as discharged.

My question is if we are 2 months behind and going to try for HAMP should I try to make the full (+$900) payment next month and end up being late on other items? Should I even make any payment? Skipping one more payment would help get our finances a little better but we can scrap by if it helps our HAMP changes.

 

[Moe Bedard]

If I were you, I would just skip it and go for the HAMP loan modification with your best effort. It may take a few months and you can save some money during this time.

The reason I say I would go for it and not make payments is because you have no short term financial solutions and no matter what you will be late if you do not get help soon. Enjoy the holidays and pay some bills as your wife works on her income and you both work on getting a loan modification to save your home.

But remember, there are no guarantees in getting a loan mod. You have to hope for the best and plan for the worst.

 

[Rc3]

Thanks, let me ask worst case scenario if I skip payments completely. No foreclosure during the HAMP application right? I looked up PA and it seems we have a long foreclosure process anyway. So if it took 2 months for a HAMP decision I would then be 4 months behind. I have no plans to go on a spree and would simply save that extra. If I was denied the HAMP could I pay everything in full to be current again? My thoughts are I would have 2 months saved and this would put me close to my refund time which would cover the remaining past due.

By next year by wife will have income, she recently passed her RE exam and has a few clients but those take 60 days to close after they what they want. It's like seeing a light at the end of the tunnel but someone keeps tripping you on your way out.

 

[Moe Bedard]

You are welcome.

That is good that you and your wife have made plans to solve your family's income issues. I know how it is.

They are not supposed to foreclose while you have a HAMP or in house loan modification application pending, but it can happen. Normally the foreclosure will be delayed and as you stated, the foreclosure process in PA takes some time.

If you are denied and or at anytime, you can cure the loan by paying all back payments and fees owed to bring your loan current.

 

[Danny B]

I am three months behind on my mortgage as of Jan. 1st. I received an email from my RM stating that as of Jan. 10th my file had been deemed facially complete and therefore they were able to put Foreclosure protection over my account as well. They state they are awaiting for their Quality Assurance team to pass my file to Gatekeeping for income calculations and this could take up to 30-45 days if no further documents are needed.

Now, dated 1-8-2016 I received a 30 day demand letter stating if I did not pay my three past due payments and the late fees by 2-7 midnight, they will accelerate the loan and proceed with foreclosure.
My question, do I try and pay the arrears within the thirty days, or do I ignore the letter and hope the loan modification is approved. And finally, if I do not pay anything, even though I missed the thirty day deadline, will they allow me to do a "catch up" as laid out in the letter if I am denied a modification, or will they accelerate straight to total loan payoff...

Thanks,
Danny

 

[Moe Bedard]

Hi Danny,

This is standard protocol with all mortgage servicers to send a letter with their intent to start the foreclosure process. If you want to cure the loan and avoid a default, yes, you can pay all the arrears and late fees to bring your loan current. They cannot foreclose on you if you pay all that is due, and it will stop the foreclosure process. You can also pay all the arrears at anytime whether you are 3 months, or 6 months behind to bring the loan current all the way up to right before the foreclosure sale.

 

[Danny B]

Hi Danny,

This is standard protocol with all mortgage servicers to send a letter wit their intent to start the foreclosure process. If you want to cure the loan and avoid a default, yes, you can pay all the arrears and late fees to bring your loan current. They cannot foreclose on you if you pay all that is due, and it will stop the foreclosure process. You can also pay all the arrears at anytime whether you are 3 months, or 6 months behind to bring the loan current all the way up to right before the foreclosure sale.

Thanks Maurice.

 

[Darin C]

Hello,
I am current on my mortgage and never been late with a payment in over 10 years. Unfortunately, my wife has just had to take a leave of absence from her job to care for her Mother who has liver cancer and is awaiting a transplant. Her job will be available to her when she returns but that could be anywhere from 9 months to years based on a whole bunch of variables. Without my wife's salary, we are not going to be able to make our mortgage payments so we are investigating our options with US Bank. As I am looking at the options, it looks like HAMP might be a possibility but I wanted to make sure that this long-term family medical leave is a viable "change of status". It appears that the "Request for Mortgage Assistance" requires an unemployment letter or proof of unemployment benefits. My wife is not technically leaving her job so she's not eligible for unemployment, but she won't be collecting her salary for the duration of her care for her Mom. Can someone let me know whether we would be eligible and if there is any additional information we should provide?

Thanks.

 

[Moe Bedard]

Hi Darin,

They will most likely not even consider a loan modification until you are late 30-90 days. Even after that time, it will be tough because as you stated, it is not for her or you, but for another family member. Remember they are simply debt collectors and they do not care about hardships, they just want their money.

A loan modification is very difficult even when it is you who has a medical issue or become unemployed. But you have to do what you have to do for family reasons. I do not blame you all one bit.

Please keep in mind that if they do play hardball, you can go from 1-2 years payment free while in foreclosure and build up cash reserves possibly based on your income.

 

[Rc3]

Just figured I would throw an update on this original. We got our paperwork in Dec, then were asked for new paperwork because the forms we filled out were not correct (US Bank wanted theirs done not the ones from the gov site). We got that to them in Jan then back and forth on various other documents until March which we were marked as complete.

Nothing until May when they asked for more documentation on a HELOC that was discharged which I got in immediately. Nothing until June when they asked for tax docs on our business that closed way back in 2013. Got that in a week later so here we are into July. Waiting to see what they ask for next. I have gotten weekly updates from our agent so we know they are never waiting on us, she said their dept is overwhelmed and way behind. I was told 2-3 months and here we are into month 7.

We are now like 10 months behind, it would be huge to get a MOD at this point. Honestly I would have been thrilled to just have our 2 months we were behind at the start added to the end. We currently owe $14000, I have been steadily keeping money aside to have about $15,000 available if we are denied as I do not want to loose our family home but it would be such a blessing to get a mod and just have $15,000 as emergency funds.

It is shocking (not really) how they drag this out. I know the underwriters have been looking at it since at least May when they first asked for more info. It really doesnt seem like it should be this hard to make a decision.

 

[Danny B]

Just figured I would throw an update on this original. We got our paperwork in Dec, then were asked for new paperwork because the forms we filled out were not correct (US Bank wanted theirs done not the ones from the gov site). We got that to them in Jan then back and forth on various other documents until March which we were marked as complete.

Nothing until May when they asked for more documentation on a HELOC that was discharged which I got in immediately. Nothing until June when they asked for tax docs on our business that closed way back in 2013. Got that in a week later so here we are into July. Waiting to see what they ask for next. I have gotten weekly updates from our agent so we know they are never waiting on us, she said their dept is overwhelmed and way behind. I was told 2-3 months and here we are into month 7.

We are now like 10 months behind, it would be huge to get a MOD at this point. Honestly I would have been thrilled to just have our 2 months we were behind at the start added to the end. We currently owe $14000, I have been steadily keeping money aside to have about $15,000 available if we are denied as I do not want to loose our family home but it would be such a blessing to get a mod and just have $15,000 as emergency funds.

It is shocking (not really) how they drag this out. I know the underwriters have been looking at it since at least May when they first asked for more info. It really doesn't seem like it should be this hard to make a decision.

Rc3,

Wow, sounds like mine to a "T"...
Turned in US Bank paperwork in Jan. Was three months behind at the time. Feb they ask for a paycheck stub from my wife. Returned it immediately. Then in April they asked for a $50 bonus clarification. Sent in letter and it was accepted. In June I called (after was told file complete and was with underwriter) to get progress. Was told it was in limbo between Gatekeeper and underwriter after receiving bonus explanation. Called today and was told they were overwhelmed and it was waiting on new income calculations. After having all my documentation in since Jan 8th and only requesting more paperwork twice, seven months seems like a bit long for not much movement. I two am now $11-$12000 dollars behind and greatly need the mod. I'm just not confident or comfortable that we will get approved with how this is playing out.

 

[Rc3]

Yeah I have no idea how it will go, some times I think they are stalling to let me get more behind hoping I'd walk away but others I really think they are just this disorganized. The docs they have asked for since everything was done seem to have very little to do with my current financial situation but I keep getting whatever right away so they cant blame me. I feel like there is no real benefit to delaying for them, I mean if they dont think a loan mod will work out then its better to give a no so they can start foreclosure and stop taxes liens from hitting the property plus the longer someone is in a home they think they will loose the less likely they are to care for it.

I only worry because my home isnt underwater. Owe about 180 and they sent me something saying it was worth 233 but we dont want to move and as my wife is a realtor I know we'd never actually get 233.

Good luck, keep this thread posted if you hear and I'll do the same.

 

[Danny B]

Yeah I have no idea how it will go, some times I think they are stalling to let me get more behind hoping I'd walk away but others I really think they are just this disorganized. The docs they have asked for since everything was done seem to have very little to do with my current financial situation but I keep getting whatever right away so they cant blame me. I feel like there is no real benefit to delaying for them, I mean if they dont think a loan mod will work out then its better to give a no so they can start foreclosure and stop taxes liens from hitting the property plus the longer someone is in a home they think they will loose the less likely they are to care for it.

I only worry because my home isnt underwater. Owe about 180 and they sent me something saying it was worth 233 but we dont want to move and as my wife is a realtor I know we'd never actually get 233.

Good luck, keep this thread posted if you hear and I'll do the same.

Rc3, will do. We owe $133,000 and has been appraised up to $218,000.
True or not, I have heard that the longer it goes, the better the chances are for a mod, especially
if they stopped requesting info. It's just the "Partial" we will owe on the back end if it keeps stalling. Maybe Maurice can chime in.
Good luck and I will keep you and this site updated.

 

[Rc3]

Hope thats true, May I was only asked for clarification on the HELOC as it was discharged 5 years prior and they could grasp it doesnt accrue interest. The only item was a 2013 tax return on a closed business so to me they sound like little items and hopefully just clearing up the loose ends before an approval. I can hope.

 

[Moe Bedard]

It is great to see you members sharing and helping one another with your stories. That is the main reason I built LoanSafe and it has become a community.

The reason they delay the process and always give excuses is because the mortgage servicer makes more money when you are kept in foreclosure. The longer they keep playing games with paperwork, the more fees they can rack up.

You can bet your bottom dollar if you were getting a new mortgage, they would not lose paperwork and get it to you in time.

This is done by design, not happen chance.

 

[Rc3]

Curious, what fees? I was told all late fees stopped as of the receipt of my mod. I know I am accruing interest but I would regardless. The only benefit I can see is if they truely wanted you to default and walk away so they could keep the home a delay would let you fall further and further behind which they would think means its even less likely you can make it current. Everything I have read says banks do not want your home, its more work for them and by the time they actually get the person out of the home its just more of a loss for them. Plus if they really wanted to foreclose then why delay the mod knowing how long the foreclosure process is and the mod is adding to the delay.

In my case getting behind any number of months has no effect on me, the loan was discharged so its not even on my credit (well the discharge is for another year). I dont see any downside of them taking forever other than I am going nuts and would like to get my life moving forward. Every month I dont pay is another payment I put in savings so if I got a mod my emergency funds are even more. If I dont get it, I write a very large check to get current and pray nothing comes up down the road to put me behind again.

Speaking of making yourself current, If I was denied then I made myself current and then in 6 months started falling behind can I just try for hamp again?

 

[Rc3]

Are there no laws on how long it should take to process these? I find it crazy that its been going on 7 months. I can understand needing to go back and forth to get the required docs but once I was told it was complete a/o March I feel like they should have to give me decision. If they delay it long enough hamp will expire.

 

[Moe Bedard]

Curious, what fees? I was told all late fees stopped as of the receipt of my mod. I know I am accruing interest but I would regardless. The only benefit I can see is if they truely wanted you to default and walk away so they could keep the home a delay would let you fall further and further behind which they would think means its even less likely you can make it current. Everything I have read says banks do not want your home, its more work for them and by the time they actually get the person out of the home its just more of a loss for them. Plus if they really wanted to foreclose then why delay the mod knowing how long the foreclosure process is and the mod is adding to the delay.

In my case getting behind any number of months has no effect on me, the loan was discharged so its not even on my credit (well the discharge is for another year). I dont see any downside of them taking forever other than I am going nuts and would like to get my life moving forward. Every month I dont pay is another payment I put in savings so if I got a mod my emergency funds are even more. If I dont get it, I write a very large check to get current and pray nothing comes up down the road to put me behind again.

Speaking of making yourself current, If I was denied then I made myself current and then in 6 months started falling behind can I just try for hamp again?

The fees would apply only if you were in default and or actively in foreclosure. They delay the loan modification because they can rack up late fees for as long as you are still in default and not given a loan modification

In regards to banks not wanting your home, they could care less because of several reasons. One is that banks do not lend their own money so they lose nothing. Two would be they own the home anyways and you are just a mortgagee. They would just get the home back and sell it a again. Three, they are insured against losses backed by tax payer money.

You could reapply again, but a 2nd loan mod is VERY difficult to get ans about 90% of people are denied.

 

[Moe Bedard]

Are there no laws on how long it should take to process these? I find it crazy that its been going on 7 months. I can understand needing to go back and forth to get the required docs but once I was told it was complete a/o March I feel like they should have to give me decision. If they delay it long enough hamp will expire.

No, there are no laws on how long they can take or if they ever have to approve you regardless if you qualify or not.

 

[Danny B]

No, there are no laws on how long they can take or if they ever have to approve you regardless if you qualify or not.

My update as of today (7-20-16), I submitted my paperwork 1-8-16 and as noted in above comments, I'm still fighting the process.
Today I was told (again) as of 6-27-16 it was with "underwriting" and there is no new request for any documentation. From 1-8 until now,
I have only been asked to send in more paperwork twice. I was told by me relationship manager last time I talked to them that they were
overwhelmed with apps and that is why it was taking so long. Again, not real comfortable it is taking so long, and to comeback after all
this time and say no would be a tough pill to swallow. I'm hoping, right or wrong, that the delay is the underwriter preparing an offer sheet
of what I possibly qualify for...obviously the Loan Mod is what we need.

And Maurice, I have read numerous articles of people getting a second loan mod...maybe that's just the 10% and I'm not hearing from
the 90% that you say are denied. Thanks for this site and your help.