Last year I help lots of people stay in their home! This year the lenders are not cooperative or willing to help. The following the making homes affordable guidelines and either the lenders do not understand the process or process is so difficult tht they can not explain why the decision was made.
Recently I work with a mortgagor that really wanted to stay in his home, even though he understood that he owed a lot more than the property was worth. He was approved by a mod back in January but did not get the funds in timily and thus was rejected. (Even though he was working the lenders and lender vendors when funds were due). When dealing no one indicated that funds needed to be sent, it was all done by mail. Then they indicated that he would have to apply through Obama's making homes affordable and he did that. They then placed him on a trail program after 5 months of follow up. The plan looked to be acceptable so he signed the documents and sent the funds in directly.
At this point he thought he had saved his home. But he was wrong!
After the first payment the lender than changed their mind and increased the payment by $600 a month ( almost 33% increase for agreed plan). He and I both agreed with the lender to understand why and how they made there decision. The decision they made, they said they made was done on verbal information, even though they had 3 packages and a qualified written request to ask the lender to review the situation!
When discussion the situation with loss mit and VP's from different departments they indicated that they were using the correct formula's for income and following the policies and procedures outlined for handling these cases. After sending 18 emails and additional phone calls the owner has given up! The income formula made no sense indicating that he was making $5200 per monthly even though his tax ret urn only reported $55,000 and his bi weekly gross income was $1700. However, he had seasonal income of $3000 in the first three months because of snow plowing. So they calculated that he was making $62,400 even though the documentation supported only $55,000.The lender did not want to save the home except if borrower pay amounts he could not afford. So it appears that mortgagor may try to do a short sale or let it go to foreclosure! I believe this is happening more and more!
I talked to other lenders they are indicated the restrictions set on making homes affordable mods are not happening because people are not qualifying the requirements.
I am not sure why the mods are more difficult, but believe that the incentives for the lenders are not the same as they were last year. The making homes affordable pay incentives but with lots more documentation and most likely not equal to incentives in prior years. Last year fnma and fhlmc were functioning arms that created incentives for lenders to complete modifications , by grading them , and pay the lenders that performed the best more when loans were originated.
The only thing accomplished through transactions like this is the foreclosure is delayed, mortgagors get frustrated, and more foreclosed properties hit the market and effect market values.
The lenders and the Government needs to address how to evaluate and save homes and really make homes affordable! I hear about how the stimulus program is helping everyone but do not see it!
Hopefully we will see the government or some other group stand up to really address this issue!
S63W13646 Janesville Road
