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I talked to my loan servicer about refinancing my current loan, but was interested in how to qualify for principal reduction. The gov't.'s PRA program doesn't apply to Fannie Mae as I assume they have their own programs already funded. My rep said that I can do the refi, but he said that the reductions are a different story. He was vague, probably didn't know exactly what qualified, but if I wanted to pursue this further:
- what are they looking for? being way behind in payments (I'm not, currently)?
- does the refi prevent me from getting a principal reduction in the future?
- should I just do the refi and save a few hundred a month and forget about the principle reduction?
I talked to my loan servicer about refinancing my current loan, but was interested in how to qualify for principal reduction. The gov't.'s PRA program doesn't apply to Fannie Mae as I assume they have their own programs already funded. My rep said that I can do the refi, but he said that the reductions are a different story. He was vague, probably didn't know exactly what qualified, but if I wanted to pursue this further:
- what are they looking for? being way behind in payments (I'm not, currently)?
- does the refi prevent me from getting a principal reduction in the future?
- should I just do the refi and save a few hundred a month and forget about the principle reduction?
thanks
You would have to qualify for a HAMP modification to get a principal reduction on a Fannie Mae loan. You need to call your loan servicer and speak to the loss mitigation department, or loan modification department. There are a lot of requirements you would have to meet though. You will have to show a financial hardship -- fill out their work-out package, give them information about all of your monthly expenses, assets, income, etc. Principal reductions and modifications are NOT easy to get!
You would have to qualify for a HAMP modification to get a principal reduction on a Fannie Mae loan. You need to call your loan servicer and speak to the loss mitigation department, or loan modification department. There are a lot of requirements you would have to meet though. You will have to show a financial hardship -- fill out their work-out package, give them information about all of your monthly expenses, assets, income, etc. Principal reductions and modifications are NOT easy to get!
Hello Debsi and thanks for your posts.
It appears I am almost in the same situation. I have a non-delinquent mortgage with Wells as the servicer. I was told today that I do not qualify for HAMP with no explanation provided other than that the lender rejected my application.
I am retired from the post office after 30 years of service. I have consistent retirement income, no late pays, no liens or judgments or anything of the sort.
After payment of the mortgage, I simply do not have any money left to pay for basic household needs (food, groceries, utilities, etc.) and as a result, I am seeking a principal reduction as it has been a bit lean for both myself and our family for awhile.
Is there a way to remain responsible and get some solid help out of this mess?
It appears I am almost in the same situation. I have a non-delinquent mortgage with Wells as the servicer. I was told today that I do not qualify for HAMP with no explanation provided other than that the lender rejected my application.
I am retired from the post office after 30 years of service. I have consistent retirement income, no late pays, no liens or judgments or anything of the sort.
After payment of the mortgage, I simply do not have any money left to pay for basic household needs (food, groceries, utilities, etc.) and as a result, I am seeking a principal reduction as it has been a bit lean for both myself and our family for awhile.
Is there a way to remain responsible and get some solid help out of this mess?
Signed,
Forever Grateful in Palm Springs
Did you try calling the feds? From the making home affordable website:
If you have additional questions about getting mortgage help, contact one of our housing experts at 888-995-HOPE (4673). These HUD-approved housing counselors will help you understand your options, design a plan to suit your individual situation, and prepare your application. Research shows that homeowners who work with housing experts like these are more successful and have better long-term outcomes. There is no cost to you for this valuable, around-the-clock service. Help is available in more than 160 languages.
I never worked the modification department myself, but I knew the guys who did. One of them had a very specific letter her sent out explaining his HAMP denials. I know he was going above and beyond what the denial requirements are, but still I'm pretty sure they have to give you some reason more than they did!
All that above is assuming you have checked and know that your loan is owned by Fannie or Freddie. I put links to check on that in another thread yesterday. If your loan is offered by another investor, the bank may simply not offer modifications on that product.
You also may be able to find relief in the HARP (home affordable refinance program). You need to keep your mortgage current for that.
Take caution when speaking to the "HUD-approved counselor".
If you are current on your loan payments DO NOT allow them to communicate with your bank. In fact I would suggest not calling them at all, instead get your information from their website.
I called for general information last Sept. I have never missed a loan payment in my life. I even told the counselor that I did not want the mortgage servicer to have any information or knowledge of my call.
Well, less than 2 weeks later I get a notice in the mail from Bank of America that my loan will now be serviced by a company named Seterus. When I call Seterus I get a message that Seterus is a collection agency and all information given will be used to collect past due monies! The next few months I would get calls from customer service reps asking if I had sent in my payment for this month. Felt like a deadbeat-- and I have a credit score in the 700's!!
Just recently got another letter from Seterus stating that my home is in a flood zone and need flood insurance. I have 4 weeks to get flood insurance or they force it upon me at $2700 for a 90 day policy. Bank of America failed to notify me when the flood zone was re-evaluated back in 2008. If I had placed a policy then it would have been a couple hundred dollars a year and the property would have been grandfathered for life at that rate. Now I am looking at an additional $1100/year for flood insurance.
I currently have calls into the Office of Inspector General at the FHFA to investigate these abuses.
These counselors are not allowed to reveal information unless you give permission but somehow Bank of America found out and judged me as a bad risk. So my instincts tell me there is some fraud occurring by the unlawful exchange of information.
Remember, these HUD approved counselors are NOT charitable volunteers, they are mortgage refinance agents who make commission from your refinance. And if you don't refinance with them they might get a little something from the bank when they rat you out.
That one call to Make Homes Affordable may have just ruined my life.
There IS one principle reduction program that is not, however:
The slang term for them is a "Short Sale" where the seller unloads
their mortgage in total by selling the house for market value and
discharging the mortgage for less than is owed.
It has been pointed out that the mortgage deficiency that is
excused will be a taxable event after the end of the current year.
Take caution when speaking to the "HUD-approved counselor".
If you are current on your loan payments DO NOT allow them to communicate with your bank. In fact I would suggest not calling them at all, instead get your information from their website.
I called for general information last Sept. I have never missed a loan payment in my life. I even told the counselor that I did not want the mortgage servicer to have any information or knowledge of my call.
Well, less than 2 weeks later I get a notice in the mail from Bank of America that my loan will now be serviced by a company named Seterus. When I call Seterus I get a message that Seterus is a collection agency and all information given will be used to collect past due monies! The next few months I would get calls from customer service reps asking if I had sent in my payment for this month. Felt like a deadbeat-- and I have a credit score in the 700's!!
Just recently got another letter from Seterus stating that my home is in a flood zone and need flood insurance. I have 4 weeks to get flood insurance or they force it upon me at $2700 for a 90 day policy. Bank of America failed to notify me when the flood zone was re-evaluated back in 2008. If I had placed a policy then it would have been a couple hundred dollars a year and the property would have been grandfathered for life at that rate. Now I am looking at an additional $1100/year for flood insurance.
I currently have calls into the Office of Inspector General at the FHFA to investigate these abuses.
These counselors are not allowed to reveal information unless you give permission but somehow Bank of America found out and judged me as a bad risk. So my instincts tell me there is some fraud occurring by the unlawful exchange of information.
Remember, these HUD approved counselors are NOT charitable volunteers, they are mortgage refinance agents who make commission from your refinance. And if you don't refinance with them they might get a little something from the bank when they rat you out.
That one call to Make Homes Affordable may have just ruined my life.
BE CAREFUL...
In my opinion, Seterus is a prime example of what's wrong with this industry. When you call to talk to someone to square something, resolve an issue, the response is "we are within the parameters of the law." Red Flag.
I realize most cannot run or they would have already. Document, document, document. Keep excellent notes. And keep watch on rippoffreports dot com and get a heads up on their other tactics.
If your are upside down in your home then this will be your best qualifier if your loan is a Fannie Mae loan/or backed loan. Just present your true and verifiable monthly income and your mortgage company/or servicer will do the rest to see if your qualify for a principal mortgage reduction.
I received a Making Homes Affordable permenante LOAN MOD in 2011 with Chase Bank. My payment went down significantly. My interest rate was lowered but it also went from a fixed to a veritable rate.saving me an overall 2% @ the end. But when all was said & done my home value worsened I went from being $28,000 upside down to now being $90.000 upside down. Chase did help me but with a very short lived fix. I have now been forced into a Chapter 13 Bankruptcy, that I can no longer afford the payment. After the BK Trustee takes out the BK payment I am left with a take home pay of being below $250. 00 a week. With 3 kids and myself as the only provider, it's become impossible. I can't afford to feed my family. I can't file for Chapter 7 because of the arrears that is currently owed on my mortgage. I need an PRA desperately. This would save my home and make my now and future payments affordable with being a long term permanent resolution. And it would not be setting me up for failure like I believe was done previously. I have been fighting to keep my home for 4yrs and have invested $53,000 in Chapter 13 BK - my intentions are sincere.. Any suggestions would be a warm welcoming start to a new hope... Thx
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Be Careful !!!
