Me and Obama Foreclosure Fix

[CCCrazy]

I will be filing Chpt. 7 by the end of this month I assume, although I have not heard a firm date from my attorney yet. I am a good candidate for the Obama Foreclosure solution since my mortgage payment is a about 45-48 percent of my monthly income. So, do I have to wait to at least after the 341 meeting to contact Wells Fargo about reducing my monthly payment or do I have to wait until I'm discharged and closed? Any input would be greatly appreciated. I'd ask my attorney but he's one of those leave me alone and let me do my job for you - he's very competent but that's just his approach to things.

[CCCrazy]

I should add that it is the second mortgage that helps me to safely pass the means test so that I can file chpt. 7. I'm a good 15K above the median. But as far as I know, the Obama foreclosure fix only works for first mortgages

[justbroke]

Who qualifies? (See the HUD site)

Q: What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
A: Under the plan, eligible borrowers (who are current and unable to refinance to lower rates), may now have the opportunity to refinance to a 15 or 30-year fixed rate mortgage. Emphasis on "may".

Q: How do I know if I'm eligible?
A: You have to be current on your mortgage and can't be late. But you can't refinance just because the home price fell. The mortgage can't be more than 105% of value. Also it has to be a Fannie-Mae/Freddie Mac! Ask your lender if it is. You must have enough income; can't be out of work; can't do this if you are underwater more than 5%. Won't work over $722,900.

Go to HUD.gov on the guidelines.

Q: What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
A: This is a different program. This plan is the modification plan. The principal could be reduced. The government is offering incentives for the lenders to do this. This is a wait and see as the lenders do NOT have to participate in this program.

Also, you are right... this is primarily for first mortgages... and the first program is for Fannie Mae and Freddie Mac mortgages only.

[Tromploi]

My atty told me to wait until discharge to talk to the bank about doing a loan mod. Mainly because you don't want to lower ANY payments while in BK, wait until discharge.

[CCCrazy]

justbroke, in reference to the home not being underwater more the 5% - that just applies to the first mortgage, is that correct? If my second mortgage puts me way over, that doesn't apply? does anyone know?

[justbroke]

You really need to go to http://www.financialstability.gov/makinghomeaffordable/ and take the questionaire to find out.

[hereforinfo]

What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
A: This is a different program. This plan is the modification plan. The principal could be reduced. The government is offering incentives for the lenders to do this. This is a wait and see as the lenders do NOT have to participate in this program.
.

Actually, the chances of reducing principal are pretty slim. The incentives are given for the "waterfall" steps, to get the payment to 31% of income: 1. reduce interest rate for 5 years; 2. extend the loan up to 40 years; 3. principal forbearance, interest free (this means not paying on principal and having it tacked on to the loan interest free, with a balloon payment at the end of a set term)

There is a statement that says that after all of the above is done and they still can't get the payment to 31%, the lender may choose to reduce principal. Fat chance! I mean come on, if they give you a 2% interest rate, 40 years to pay back the loan, and forbear payments and you still can't afford the payments then you probably shouldn't have bought it in the first place. By "you" I mean in general, not you specifically.

[spearmint]

My concern is what is going to make the servicers/lenders comply with Obama's guidelines now? Chase said they agreed to a moratorium on foreclosures on february 12 but they didn't. They lie!

[eddiep]

Hey Spearmint!
I heard on the news tonight that Obama added a string! Any bank who does not participate in this program will not get any more bailout money. Too bad Bush hadn't added a string to the bailout last year, all that money wasted.

PS
BoA called me today, I got my modification. Nothing to do with NACA nothing to do with Obama. I emailed the executives last week and low and behold they gave me EXACTLY what I was asking for.

[pcn]

Hey Spearmint!
I heard on the news tonight that Obama added a string! Any bank who does not participate in this program will not get any more bailout money. Too bad Bush hadn't added a string to the bailout last year, all that money wasted.

PS
BoA called me today, I got my modification. Nothing to do with NACA nothing to do with Obama. I emailed the executives last week and low and behold they gave me EXACTLY what I was asking for.

What did you ask for? Are you taking a deal and not filing? If so, why? Thanks for your input, as we're considering trying to deal as well.

[eddiep]

I have three mortgages (on the same property), the combined payment was too high after hubby lost job, out of work for three months and took big pay cut ($800/month no overtime) just so he could get back to work. I needed them to extend the terms out to 30 years. I also had 9.09% on the biggest of the three loans. They lowered the rate on that one to 6.09% for five years. The others were at 4.99% and 5.74% which isn't too bad to begin with. I will consider refinancing after we recover from the bk. I am definately taking the deal but we are still going to file bk in April, we never got behind on mortgage but are just too far behind to ever catch up on cc. I need a fresh start. Our attorney wanted this resolved before we file.

[Lindsay]

Our mortgage is with American General Financial, an AIG company. I wonder if it is worth trying to ask for a mortgage modification. We are not badly underwater, our house is probably worth just about what we owe. But our mortgage interest is at 8.5% and the payments are about 55% of our current income. We're about to file Chapter 7. I don't know if I should try to approach the subject with them before or after we file. We definitely want to keep our home. We aren't asking for a principle reduction; just a lower interest rate to make our payment more affordable.

[eddiep]

I would talk to your lawyer for sure. Mine thought it would be best to get it done before the reaffirmation, that by signing it I am agreeing that I will be able to make my payment. I am sure he would not have let us sign the reaffirmation agreement because honestly we could not afford the payment. But it seems like everything is changing, most of the old rules are out the window. And you have to remember, the banks are now getting paid to adjust your mortgage. I'm sure they will be much more eager to help you out now that they are getting something out of the deal. I'm no expert but it does sound like you would benefit. There is no harm in applying, but check with your lawyer to find out the best timing for you. We had the time to get this done because I started this process shortly after I stopped paying on cc so I wasn't in imminent danger of getting a judgment.

[eddiep]

pcn

Why not try? What do you have to lose? It sounds to me like these are some pretty clear, defined guidelines that Obama has set up. It obviously will not help every person in every situation, but at the very least it sounds like it will cut down on the games that the lenders are playing. You will either qualify or not. I will say that Bank of America is probably one of the more reputable lenders out there right now, so I guess I am lucky in that respect. I honestly did not think they were going to help me out and neither did anyone I talked to but they came through for me. I am going to stop tooting their horn until I get the papers in my hand! I don't want to jinx myself! OHH now I am scared again!

[eddiep]

I just read my post, I hope I don't sound like I am lecturing anyone! That is not my intention at all. But I do think you have to stand up for yourself! Get a little angry! I am just urging you to fight for what you are entitled to, they did not do you any favors by giving you 8.5% interest rate! They have not been looking out for your best interests believe me, they have been sucking every cent they can get out of you and they will continue to do it unless you make them stop.