Got my loan modification offer from my lender in the mail today. Thank you President Obama!!

[bigtree]

It looks like I'm going to get about 287. shaved off of my monthly mortgage making my new monthly payment a little over a thou. Income has been reduced for over a year, perpetually a month behind every payment . . . I'm so relieved . . . and grateful!

(I'm with DiTech and they've listed the plan on the front page of their web site as 'President Obama's loan modification plan.')

[imdjh]

1. Did you have to qualify for the new loan?

Just curious. I would like to get a loan mod, but I wouldn't qualify with standard debt to income ratios. The original loan was a DADT loan.

[bigtree]

2. All that's in the packet is an affidavit that I have to sign

I did have to provide proof of income (reduced checks). I really don't know if they actually assessed my ability to pay, although I can't imagine they didn't.

[flvegan]

3. Great news!

Congratulations.

[bigtree]

5. thanks

the fear ran deep for the past year. I narrowly avoided foreclosure two years ago, so I've been a wreck.

[benld74]

4. Congratualations and Good Luck!

[bigtree]

8. thank you thank you

(I thought it was another foreclosure notice when I saw FedEx pull up! Ha!)

[barbtries]

6. i'm really happy for you

and perhaps even more, happy to hear that there is relief for some people coming through.

[bigtree]

7. I'm surprised to see this offer so soon

There's a 'trial' payment period of 3 months where they see if you'll make the modified payment and then they'll set the monthly somewhere close to the trial payments.

I'm an original skeptic. This is for real.

[livetohike]

9. Congratulations!

Nice to see that things are working....hope this works out well for you :hi:.

[bigtree]

12. thanks, livetohike

It's perfect. I've stayed a month behind for a year now so this is going to make it so much easier and doable since I have a pretty secure job (albeit with declined and uncertain hours)

[Amy6627]

10. I'm assuming the value of your home went down? If so, you should

also check to see if you property taxes should be lowered. I live in California and my county tax assessor lowered them without asking, but I don't think all counties do that. They were lowered so much that my lender sent me a check (after I called them to do it), sent me a refund of over $500.

Good luck & Congrats!

[bigtree]

11. you know

I was already scheming on how to get it lower . . . just in shock or something right now. Thanks for the advice!

[Saturday]

13. My DS and DDIL also start the Obama program this month.

They were advised that if any of the payment in the first 3 months are late they well be yanked from the program. But for some reason they say they can't put it on auto pay from their checking account for 3 months. Did you have to do that? Seems strange.

[bigtree]

14. no request for autopay from the lender (I don't think . . . will read more)

. . . but there is the stipulation that payments must be on time during the 3 mo. trial period or they won't make it permanent.

[tomm2thumbs]

15. congrats!

glad to see!

[bigtree]

20. thanks, tomm2thumbs!

[Saturday]

17. The only thing we could think of was that

the bank was trying to set them up to fail. Otherwise why in the world would you not accept auto pays for 3 months?

[bigtree]

19. since the lender is setting it up

I'll bet it depends on the lender's preference for payment methods.

[blueamy66]

16. Good for you!

I just closed on mine...wish you luck with yours!

[bigtree]

18. congratulations!

thanks . . . holidays coming . . . *big sigh*

[Toucano]

21. Good for you.

I am really happy for you.

Now let's work on getting that program expanded so more people can qualify.

MUST SEE VIDEO http://www.pbs.org/now/shows/546/index.html

Many are falling through the cracks and it doesn't have to be that way.

[bigtree]

22. will look for that legislation

do you know the state of?

(video is a no-go with this dial-up)

[Toucano]

23. Sorry. I didn't realize that.

Let me look for a transcript.

[Toucano]

24. From the transcript

HINOJOSA: Has the government done enough to protect homeowners—at this point in terms of foreclosures, or not?

WARREN: We have not developed a robust program to get ahead of the foreclosure problem. Part of the problem is that the government showpiece program is really directed toward the problem that existed six months ago, which was all about sub-primes and escalating payment rates. Now, the foreclosure problem has spread, the contagion. And more families with—who are unemployed has made the problem even bigger.

HINOJOSA: And they don't get that kind of help?

WARREN: And they don't get the help. They—they're not eligible for the program.

<snip>

HINOJOSA: So, taxpayers, essentially have paid out a trillion, with a T, dollars to help in bailouts for Wall Street, for AIG, or auto companies. But in essence, the help for families facing foreclosure, stuck, going nowhere?

WARREN: Well, it—I don't wanna say that. It's—there is a program. And the families who get help, god bless, I mean—it helps somebody. And every family that gets helped, I'm glad that the case. Good for the family—actually, good for the investor, and ultimately, good for the community they live in. Too little, too late. We gotta do better than that.

HINOJOSA: But the Obama administration supposedly was saying, "Look, we have the priorities straight. We are going to help the American family." So, what are we to take away from that?

WARREN: Too little, too late. We've got—if—if we wanna get ahead of this problem, we've got to do more. And—and look—I wanna be clear, there are multiple ways we can address this problem. One, is we can put more money into it. We certainly put money in at the top. We've put a lot less money into the home mortgage foreclosure process. But the other part, is we can talk about the investors in these mortgages, who can be forced to absorb some of their losses. You know, let's remember, a mortgage foreclosure, on average, costs the investors about $130 thousand dollars. So, every time we get somebody who gets to stay in their house because they've worked out some arrangement, the investors have not suffered a big hit they otherwise would've suffered. So, bringing those two together ought to happen, even without lots of government dollars in between. Right now, too many of those investors are sitting on the sidelines, saying, "I'm not gonna work with families in foreclosure. I'm gonna wait for the government to come and bail me out because that's really what they want to see."

http://www.pbs.org/now/shows/546/transcript.html



There isn't any legislation mentioned, but Rep. Elijah Cummings from Baltimore is interviewed in the piece. I called the office yesterday and mentioned the PBS interview and asked that he please try to do something. He is not my representative though.

http://www.house.gov/cummings/contact.shtml

[bigtree]

25. how do you think a family with no income could be helped in this?

I could see putting stopgaps to foreclosure in place, but eventually they'd have to have some dependable way to pay every month. I don't remember if the new initiative had such protections.

[Toucano]

27. There are a couple of ways it can be addressed.

I like the idea of a 21st-century Homestead Act whereby the federal government buys the mortgage from the lender at 60 cents on the dollar.

Feds now own the note.

Homeowner signs a contract with HUD to maintain the home, property taxes, etc. for a period of 5 years during which time homeowner cannot sell the property. If the homeowner moves during during the 5 years, they forfeit any claim to the property.

But if the homeowner stays, at the end of 5 years, they can sell the property for no less than the amount the government paid for the note. The homeowner could retain any proceeds from the sale in excess of the amount indebted to the feds.

Without having to pay for housing, millions of unemployed and underemployed could direct their small incomes to living expenses, education, and other costs of living that help stimulate other economic activity. The homeowner would also receive no income tax refunds during the 5 year period.

Everybody wins or at least mitigates their losses.

* Lender gets something and avoids the expense of foreclosure.

* Family gets to stay in house.

* Other property owners in the neighborhood don't have to suffer the blight of a rash empty homes driving down the value of their properties.

* Money spent by feds on unemployment benefits doesn't become additional bank bailout money, but instead is spent on new purchases. Jobs return to fill demand created by new spending.



There are other ideas, too, however. I rather like the one that turns some wealth DOWN the ladder rather than UP the ladder for a change.

[bigtree]

28. wow

That's really something. '21st-century Homestead Act' That's a great title.

It sounds more ambitious than I think Congress is apt to agree with. Is there anything close to that in the hopper?

[Toucano]

30. Not that I'm aware of.

I first brought the idea up in April. http://www.google.co.cr/search?q=21st+century+homestead+act

New York just passed state legislation that helps by imposing the requirements that now help subprime borrowers to all borrowers. It really just stalls, though.

Other states are trying to mitigate the disaster, but they don't really have the kind of money necessary to really fix it.

http://www.ncsl.org/default.aspx?tabid=17229

I think the reform has to come from the federal level, though. They have the power to force the bailed out bankers to accept some of the loss created by their risky behavior.

[Ikonoklast]

26. That is some great news, indeed!

So many need to hear news just like that.

[David Zephyr]

29. Congratulations, bigtree!

:applause:

[Snarkoleptic]

31. Sent my request and a mountain of paperwork to Wachovia/Wells Fargo in June.

I'm a prime candidate for a modification based on reduced income and they're still jerking me around.
It's like a game of "oh no, you'll never default" chicken.
Had to borrow $3,400 from my parents to pay my county RE taxes a few weeks ago. (an exercise in shame and embarrassment as I'm a 45-year old who's always provided for my family)
I'm circling the drain while Wells Fargo sits on my request...very disheartening.

[bigtree]

35. I'm so sorry to hear that

Wells Fargo, huh? I read where there's no teeth in the bill to force lenders to allow modifications.

[ecstatic]

36. I'm with them too. May I ask... what type of paperwork are they

requesting? Tax info? Paystubs? What??

[Snarkoleptic]

37. I started with Wachovia just before the Wells Fargo acquisition.

I had to fill out a 3 page form and supply-
2 most recent statements for all asset account
2 most recent pay check stups
prior years W-2
Handwritten letter pleading my case
and a detailed list of my other monthly expenses (credit cards, utilities, taxes, etc).

All I hear is the sound of crickets....

[bigtree]

38. the handwritten letter requirement

. . . sounds so much more subjective than I think the program was intended. All I can imagine is that the lender is in such distress that they're swamped with requests than they can reasonably handle. Ditech promised a reply in 15 days and a workout plan within 90 days. I applied about a month ago. Ditech looks to have a committed office handling the claims, I imagine to get the bad loans off of their books. I can't think of a reason for your lender to neglect to take care of theirs except that they may just be buried in applicants. Did you try and call them?

[Snarkoleptic]

39. Yes, been in touch by phone 7-8 times since they passed their original 60-day timeframe.

I keep getting yanked around.
Maybe I should stop paying and send them a certified letter.
I work in the mortgage industry and am making about 30% of my former pay.
I know it cliche, but like they say...bankers kids are poor, cobblers kids have no shoes, etc...

Not to suggest a strategic default, but...
One of the major components of the decision to mod or not to mod a loan is how the lender will fare in the event of a foreclosure.
They also consider borrowers who are 60 days delinquent to be ideal candidates. Not too far gone, just past due enough for a rescue.
We have very little remaining equity, but have never missed a payment in our 25-y credit history...that's about to change.

[bigtree]

40. it's a shame

The bill was designed so that homeowners didn't feel they had to risk actually defaulting before getting assistance. Can you imagine the default rate from folks looking to take advantage of the offer if there wasn't an 'almost defaulting' provision? Sounds like a good plan to get as close to what they expect, but, it's a shame. It's not like it's cheap for the lender to foreclose.

[TwixVoy]

32. What are the terms of the deal?

The balance owed is not being reduced, correct?

So is the bank playing a numbers game - extending the time of the mortgage (number of payments) in order to get you smaller payments? Are they lowering the APR?

[bigtree]

34. I think there's something added on to the end of my loan

I don't plan on moving so I'm not so concerned about that. One good part is they will wipe out the late fees I've incurred over the past year. I'm all for the 'numbers game'. I've been desperate for a way to get caught up. Every month has been a dread.

I'm in a trial period right now for three months in which I have to make the reduced payments on time and perfect. At the end they will decide whether to make it permanent, but I'm not reading any big obstacle to that, so . . . Don't really have any info on the APR. I imagine I'll get more detail when they work out whatever permanent payment they decide (which they say should be close to the trial payment amounts).

[DU GrovelBot]

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