Hamp Tier 2

Cat Damiano

Mortgage Wars
Hello,
I was recently denied for a hamp 2 mod because my debt /income ratio is above 31%. Is it required by HAMP for the servicer to automatically start the "waterfall " process or is this something that is done on a case by case basis?
Were you already denied the HAMP Tier 1 prior to this? What was the reason for that denial?
 

lwillhite

LoanSafe Member
Hello Carrie,

Under the settlement reached between Fannie Mae and Bank of America, BOA is only buying back 30,000 mortgages from FNMA. While all of the mortgages in the buyback were originated by Countrywide, that number is by no means the total number of mortgages Countrywide sold to FNMA between 2000 and their collapse in 2008. All of the loans being bought back are deemed to be "soured", in other words loans that have faced serious delinquency since being originated.

All homeowners whose loans are affected by this settlement will be receiving a letter notifying them that the ownership of the loan has changed from FNMA to BOA.

Tim Trumble
Online Operations, NACA
[email protected]
 

indeep1959

LoanSafe Member
I am one that is in serious delinquency with one of these loans. Former countrywide now BOA,Fannie Mae investor. Do you know when we might see that type of letter if we are chosen?

And would that be good or worse in your opinion to try to get a mod?
 

lwillhite

LoanSafe Member
Hello indeep1959,

I don't have any information on when the notification letters will go out, although BOA was actually very efficient in identifying loans that fell under the National Mortgage Settlement and sending out notification letters. My guess (that's GUESS) is we may some letters start showing up in mailboxes within 30 to 60 days. It is going to take a little time to identify every loan that falls under the settlement and notify the homeowner.

Whether the transfer will make it easier to modify any of the loans is anybody's guess. Regardless of the status, you should not hesitiate in seeking a modification. The longer you wait, the worse your situation becomes and the closer you get to foreclosure. Start the process as soon as you can.

Tim Trumble
Online Operations, NACA
[email protected]
 

indeep1959

LoanSafe Member
Thank you for the quick reply.

I've been trying for about a year to get an affordable mod but not getting anywhere.
Though I was approved for a mod and made some trial payments last summer, ultimately we had to turn it down because it was not affordable long term. I requested they review my financials ( they overestimated what we make) but have been turned down twice.
Just today I received an offer for a deed in lieu from them which is obviously not what we want.

That's why I asked how long it might take to see if we would be one of the loans affected before I considered my next move.
 

lwillhite

LoanSafe Member
Your greater issue is most likely going to be related to the modification offer you received last summer. Since the offer was made less than 12 months ago, you may well not be eligible to be considered for a modification yet. Additionally, since you turned down the offer, you will not be offered the same type of modification offer, which will limit the options available. In short, you may have an uphill battle ahead of you, but it should not stop you from trying. Don't try to time things. It needs to be an ongoing, relentless effort until you get the solution you need.

Tim Trumble
Online Operations, NACA
[email protected]
 

survivor

LoanSafe Member
I have a question in regards to the HAMP2 program. Evidently, we have been approved through Green Tree for Hamp. I assume Tier 2, since we make too much money for Tier 1. We are waiting for the paperwork, so I can take a look at the details.
My question is, (without seeing the offer yet) do they have to do the PRA, MTMLTV to 115% of the value of the home? We are close to 200k upside down, and I surely don't want them to add 45k in late payments to the already upside down loan. I am very confused on the Waterfall procedure, could someone please shed a little light on this, so we can make an informative decision on this we we receive the offer?
 
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lwillhite

LoanSafe Member
Hello Survivor,

Eligibility for HAMP 2 is based on the following reasons:
• Homeowners not eligible for HAMP Tier 1 (e.g., NPV negative or excessive forbearance)
• Homeowners who did not successfully complete HAMP Tier 1 trial period plan or permanent modification
• Rental properties properties occupied occupied by a tenant or available available for rent on a year‐round basis
• Homeowners with a monthly mortgage payment less than 31%

The waterfall is:
• Recapitalization of arrearages
• Interest rate adjustment (Freddie Mac Primary Primary Mortgage Mortgage Market Survey rate + small premium: www.freddiemac.com/pmms/)
• Term extension extension – 480 months
• Principal Forbearance (if pre‐modification MTMLTV is greater greater than 115%)

The Post-modified payment must:
• Be within the acceptable Debt-To-Income range of 25% ‐ 42%
• Have a P&I reduction of at least 10%


Hope that clarifies things for you.

Tim Trumble
Online Operations, NACA
[email protected]
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Excellent information Tim on HAMP Tier 2, thanks as always for chiming in and helping members of the community!

Have a great weekend!
 

survivor

LoanSafe Member
Hello Survivor,

Eligibility for HAMP 2 is based on the following reasons:
• Homeowners not eligible for HAMP Tier 1 (e.g., NPV negative or excessive forbearance)
• Homeowners who did not successfully complete HAMP Tier 1 trial period plan or permanent modification
• Rental properties properties occupied occupied by a tenant or available available for rent on a year‐round basis
• Homeowners with a monthly mortgage payment less than 31%

The waterfall is:
• Recapitalization of arrearages
• Interest rate adjustment (Freddie Mac Primary Primary Mortgage Mortgage Market Survey rate + small premium: www.freddiemac.com/pmms/)
• Term extension extension – 480 months
• Principal Forbearance (if pre‐modification MTMLTV is greater greater than 115%)

The Post-modified payment must:
• Be within the acceptable Debt-To-Income range of 25% ‐ 42%
• Have a P&I reduction of at least 10%


Hope that clarifies things for you.

Tim Trumble
Online Operations, NACA
[email protected]

Thank you so much for your information. I received the paperwork today, asking for the three trial payments. No information on what the mod will be. Is that common? If so, how are these shaking out after the trial period, if the MTMLTV exceeds 115%, will or have they done principal reductions?
 

Cat Damiano

Mortgage Wars
Thank you so much for your information. I received the paperwork today, asking for the three trial payments. No information on what the mod will be. Is that common? If so, how are these shaking out after the trial period, if the MTMLTV exceeds 115%, will or have they done principal reductions?
They do include principal reductions in the form of forbearance and/or forgiveness based on the outcome of the calculations using the waterfall steps where necessary to achieve the target payment;

If the loan’s pre-modification mark-to-market LTV ratio is greater than 115 percent, the NPV
model calculates principal forbearance in an amount equal to the lesser of (i) an amount that
would create a post-modification mark-to-market LTV ratio of 115 percent using the interest
bearing principal balance or (ii) an amount equal to 30 percent of the gross post-modified UPB of
the mortgage loan (inclusive of capitalized arrearages). The principal forbearance amount is non interest
bearing and non-amortizing.

Unlike HAMP Tier 1, there is no excessive forbearance limit in HAMP Tier 2.

The amount of principal forbearance will result in a balloon payment fully due and payable upon
the earliest of the borrower’s transfer of the property, payoff of the interest bearing UPB, or at
maturity of the mortgage loan.

HAMP Tier 2 Alternative Modification Waterfall;

Under the HAMP Tier 2 alternative modification waterfall, the NPV model will use principal
reduction in place of forbearance to reduce the UPB by an amount equal to the lesser of (i) an
amount that would create a post-modification mark-to-market LTV ratio of 115 percent using the
interest bearing principal balance or (ii) an amount equal to 30 percent of the gross post-modified
UPB of the mortgage loan (inclusive of capitalized arrearages).
 

donnac

LoanSafe Member
Cat are there any advantages getting your file to the executive team. Do you feel it makes a difference
 

survivor

LoanSafe Member
They do include principal reductions in the form of forbearance and/or forgiveness based on the outcome of the calculations using the waterfall steps where necessary to achieve the target payment;

If the loan’s pre-modification mark-to-market LTV ratio is greater than 115 percent, the NPV
model calculates principal forbearance in an amount equal to the lesser of (i) an amount that
would create a post-modification mark-to-market LTV ratio of 115 percent using the interest
bearing principal balance or (ii) an amount equal to 30 percent of the gross post-modified UPB of
the mortgage loan (inclusive of capitalized arrearages). The principal forbearance amount is non interest
bearing and non-amortizing.

Unlike HAMP Tier 1, there is no excessive forbearance limit in HAMP Tier 2.

The amount of principal forbearance will result in a balloon payment fully due and payable upon
the earliest of the borrower’s transfer of the property, payoff of the interest bearing UPB, or at
maturity of the mortgage loan.

HAMP Tier 2 Alternative Modification Waterfall;

Under the HAMP Tier 2 alternative modification waterfall, the NPV model will use principal
reduction in place of forbearance to reduce the UPB by an amount equal to the lesser of (i) an
amount that would create a post-modification mark-to-market LTV ratio of 115 percent using the
interest bearing principal balance or (ii) an amount equal to 30 percent of the gross post-modified
UPB of the mortgage loan (inclusive of capitalized arrearages).
Thank you so much!!! You have all been so helpful and informative! Basically, its a roll of the dice I gather. I did read that if you decline, you have to wait five years before you can apply again, so not sure what choice we have. Forty years, we will be 100 yrs. Old. Decisions, decisions, stressful, as everybody else has been going through. Thank you again.
 

TomEason

LoanSafe Guide
survivor

If you like you home and neighborhood and want to keep it, I recommend you accept the mod .

Were it me, I wouldn't be concerned about the 40 year term. I would simply be happy I could keep the home with an affordable payment.
 

survivor

LoanSafe Member
survivor

If you like you home and neighborhood and want to keep it, I recommend you accept the mod .

Were it me, I wouldn't be concerned about the 40 year term. I would simply be happy I could keep the home with an affordable payment.
Hi Tom,
Thank you for your input.
I am thinking along the same lines.
If they do the forbearance, and if something came up later, and the house is still upside down, how would you sell it, or deal with that big balloon? Just haven't seen anything online along the lines of the what ifs down the line.
 

TomEason

LoanSafe Guide
Hi survivor

Thanks for your question.

If your property's value eventually appreciates enough, you will likely have enough equity to sell or refi.

And if not, what alternatives do you think you have?
 

survivor

LoanSafe Member
Hi Tom,

Well, Just thinking, principal $345k, arrearages, $ 41k, house worth 189k on Zillow, which sometimes runs high. house is 20 yrs. old. I can't imagine it ever getting 200k to just become flush. So, I am sure the only alternative is to take it, but just wondered what happens in the scenario, If I had to sell it at some point, and its upside down, will I be able to short sell, and that's the end of the story, I pay taxes on the deficit and it goes away?
 

Cat Damiano

Mortgage Wars
Cat are there any advantages getting your file to the executive team. Do you feel it makes a difference
My answer would be that depends. If one is at a standstill with the file, it may get the process moving again. Also if one feels they have an incompetent RM, contacting the executive team may help in getting a new one.
 

paches

LoanSafe Member
HI Cat....

My question...
I'm close to the end of the original 12 month Unemployment Forbearance Loan agreement 4/1/14, payment '12', as setup by Bofa now in the hands of NationStar. I heard that there is a part II of the program (HAMP Tier 2, I think), that if ya' haven't found that elusive job, that they, NationStar, is to continue the Unemployment Forbearance Loan agreement for an additional time... like another 12 months?? Or do I have to re-apply.

I could use really your input, again.

Thanks,
Steve
 

paches

LoanSafe Member
Cat.. I found this. So I'm to understand that if I made the 12 months program payments and I am still unemployed I can then evaluated for eligibility under HAMP again???

....Provides 12 month forbearance assistance to unemployed. Servicers are required to offer forbearance assistance to unemployed homeowners for 12 months. When the borrower gains employment or the 12 months have expired, they will be evaluated for eligibility under HAMP.

I am confused????

Thks, Steve
 
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