Loan Modification...Anyone done this??

[Kika]

Oh yes...it will hurt your credit score. But, if you're qualifying for this program and pursue it I would think MOST people are doing it as a last ditch effort to keep their house and the other option being losing the house, short sale, foreclosure etc...so the hit to the credit probably won't be the determining factor...sad, but true.

Ah; got it. That makes sense. Thanks.

 

[SweetPeasMom2]

OMG! Didnt you post that you went to Epcot recently? And you are losing your home??

Wow! Really? Yes we did. We received gift cards for Christmas and I used some extra money from my November bonus to help pay for the rest. It was one day, not one week.

 

[bdcp]

Does the loan modification program affect your credit score in any way? I'm not planning on doing one, but this is something that I have been curious about for a while. Someone at work told me yesterday that they just called up their mortgage company a couple of days ago and got a lower rate with no closing costs, change to the length of the loan, etc. It sounded too good to be true, but since I didn't want to rain on her parade, I was just like, "Wow. That's great!"

Normally the only way a mortgage company would do that is if you had a lot of equity. We have Wells Fargo and they had a plan like that for current customers who met certain requirements, enough equity and no second mortgage.

 

[Liltx]

Normally the only way a mortgage company would do that is if you had a lot of equity. We have Wells Fargo and they had a plan like that for current customers who met certain requirements, enough equity and no second mortgage.

We were able to do the same thing (Jan 2010). It was through Makinng home affordable but it is a refinance. They paid $5600 toward the closing costs so we ended up paying like $300ish, plus the $400 application fee. For $60 more a month we took almost 8 years off our loan.
I guess they have to give the money from the gov. away somehow. Only, they are helping people like us who have no job/income loss and not the people who really need it. I guess we were a safe bet. My husband's aunt is about to lose her home but really even with a modification in the end she is so upside down that she should probably just let it go.

 

[bdcp]

We were able to do the same thing (Jan 2010). It was through Makinng home affordable but it is a refinance. They paid $5600 toward the closing costs so we ended up paying like $300ish, plus the $400 application fee. For $60 more a month we took almost 8 years off our loan.
I guess they have to give the money from the gov. away somehow. Only, they are helping people like us who have no job/income loss and not the people who really need it. I guess we were a safe bet. My husband's aunt is about to lose her home but really even with a modification in the end she is so upside down that she should probably just let it go.

The problem is all the money people think the "government" is giving them is just coming from taxes (out of everyone who pays taxes pockets) and the gov borrowing which is increasing out debt and in the long run won't help anyone and will cause home values to keep dropping. We are in no financial difficulty, but we are watching our home's value drop again. And we're in an area where the unemployment rate is somewhere around 5%.

 

[lpereira]

The reason loan modifications are a nightmare for a lot of people is because there is no motivation for banks to do it. The government guarantees a vast majority of mortgages in this country. If the bank modifies your loan it loses money. If the bank forecloses and sells your house it makes money. Even if it sells at a loss. When the loan is guaranteed then the government will pay the bank the difference between what is owed and what the foreclosure sale brought in. Even if it is one of the few non government back mortgages, the banks holding the notes are backed by the government. It's all like a giant house of cards with a where the risk side of banking stayed regulated but the reward portion of the industry was turned loose with no rules.
Thats not even getting into the loan servicers and mortgage securities holders situation.
In that sense I can understand why the government has been pushing the modification program. We don't have the tax revenue to pay out all the guaranteed loans in this country or failed banks.
Now whether or not the government should be backing mortgages or bailing out banks that is a matter of personal politics thats best left to another forum.

 

[Liltx]

The problem is all the money people think the "government" is giving them is just coming from taxes (out of everyone who pays taxes pockets) and the gov borrowing which is increasing out debt and in the long run won't help anyone and will cause home values to keep dropping. We are in no financial difficulty, but we are watching our home's value drop again. And we're in an area where the unemployment rate is somewhere around 5%.

Yes, I realize you are right and it is a big mess but the decision has been made by the gov so we took advantage of it. Why would we not, the money has already been given to the banks it won't save you tax money if I pass the offer up? Our home value has not dropped but remained stagnant which right now is great news. We plan to stay in this house (our third) at least until retirement so this saved us BIG bucks. The economy in our city has recovered, again we are blessed.

 

[SweetPeasMom2]

The reason loan modifications are a nightmare for a lot of people is because there is no motivation for banks to do it.

BINGO! That's is exactly the reason. My husband was the builder that built our house so we built it for far less than the value of it when we moved in. We moved in with almost $200K in equity. In our case, we owe now about what the house is worth. I actually would say it's worth $25-$50K less than what we owe. There are 2 house in our subdivision that were on the market for about 3 years. Both were foreclosures. One sold for $50K less than what we owe in the summer of 09. The other sold for right at what we owe last Christmas (this house is directly across the street). The bank will most likely sit on this house for a long time. But they would rather that than modify the loan and have us live in it.

For the record, when we were going through the trial period, when they used the formula set out by the MHA program, we were able to make that payment no problem. It's the fact that our payment more than doubled the year after we moved in due to incorrect calculations on what our taxes were going to be and what was held in escrow. We were fine before that.

 

[princesslily]

You went through the trial period and they didn't approve you! Did you then owe the difference of the modified payments? I need a modification also, but am afraid to get in more financial trouble!

 

[pixiewings71]

We recently did the Housing Affordability Modification Program and it went very smooth for us. We have to give 3 trial payments on time and our lender sent us out the paperwork right away and it lowered our payment to what we can not afford. That is supposed to be what the program is designed for to maybe your payment(included taxes and insurance) be 31% of your income? It lowered our payment a lot and our interest rate as well. If you have nothing to lose, why not try and the worse they can say is no? For us it was easy and worked out, for others probably not. Maybe it depends on what lender you have.

So far this has been our experience. The bank has been VERY willing to work with us, they've been knowledgeable, polite and helpful when we've called. We've received notice of paperwork received, I have all my sent paperwork noted, we have proof of delivery (we sent paperwork via UPS so we could have the tracking and proof of delivery). My Mom is trying to mod her home loan as well but she's having the nightmares indicated by others. I wish the banks would just get their stuff together and help people.

The problem is all the money people think the "government" is giving them is just coming from taxes (out of everyone who pays taxes pockets) and the gov borrowing which is increasing out debt and in the long run won't help anyone and will cause home values to keep dropping. We are in no financial difficulty, but we are watching our home's value drop again. And we're in an area where the unemployment rate is somewhere around 5%.

UE in my area is 12%. I'm in that 12%. It isn't fun.

You went through the trial period and they didn't approve you! Did you then owe the difference of the modified payments? I need a modification also, but am afraid to get in more financial trouble!

If they don't approve you for the mod then yes you owe the difference and you owe any missed payments you might have as well.

 

[quentina]

You went through the trial period and they didn't approve you! Did you then owe the difference of the modified payments? I need a modification also, but am afraid to get in more financial trouble!

My friends had a nightmare pre-lawyer. They got a bill for $35,000 or foreclosure. Once the lawyer got involved it was cake. They had a court date in November and the judge gave them 30 days to modify the note. Prior to that, it was crazy....nothing no one should have to go threw. Her husband got laid off from very high paying job.....nightmare for them.

Good news, they paid 4000$ for the lawyer however; are now keeping their house with an incredible mortgage.

 

[SweetPeasMom2]

You went through the trial period and they didn't approve you! Did you then owe the difference of the modified payments? I need a modification also, but am afraid to get in more financial trouble!

Yes, we made the trial payment on time (and even early) for 9 months. Then they denied us. Pretty standard. We thought about getting an attorney involved at that point but the one I spoke to wanted $300 to just consult with us. There was still on guarantee, then what do we do? So we are letting them take the house. I'm in GA and we aren't one of the states that require going before a judge. It just happens on the courthouse steps.

 

[beachgrl001]

OMG! Didnt you post that you went to Epcot recently? And you are losing your home??

OMG!!! who are you the disney police??? You shouldn't be so judgmental, maybe she had prepaid for the trip and couldn't cancel...maybe a family member took her....My mom is taking my ds and I in Oct. that DOES happen...I hope she DID go and have a GREAT time! Life is short

 

[Want2liveatWDW]

Get a lawyer and let them do it.

I tried to do it on my own with BOA and over a year later with many lost paper/files, no one knowing what the other person or department was doing.
I got fed up an hired a lawyer. In less than 3 months they got me 3.625% and lowered my payment $500.
We used http://www.amerihopealliance.com/ They were awesome! Good luck!