BK and the "Obama Plan"?

[Dizzy]

I am on a trial mod thru the Obama plan. You have to go thru a 3 month trial period where you make payments that are 31% of you income, it took almost $600 off the monthly payment, they cut the interest rates from 6.7 to 5.1 and then after the 5 year payment plan is over the interest goes to 5.2 and locks in for the remainder of the loan. I was about to file CH7 in July and then I was told I was accepted in the program. My attorney said to hold off on filing until Oct 1st when the loan modification is locked in. You cannot get a loan mod if you are in the bankruptcy process. Dont tell the mortgage company that you are filing, they will stop working with you and it will stop any loan mod thats in process.

Awesome! Can I ask who your lender is and whether they asked for gross or net income? Did you tell them about all your debts? Do they consider your minimum payments owed on your debts when they figure out if you can make the 31% payments? AT LAST!!!! Someone I can follow! I am SO doing a happy dance! I hope you don't mind if I ride in on your coattails!

[2Bshinyandnew]

It's all here:

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0905.pdf

https://www.efanniemae.com/sf/guides/ssg/relatedservicinginfo/pdf/hampfaqs.pdf

https://www.efanniemae.com/sf/mha/mhamod/pdf/hampsummary.pdf

https://www.efanniemae.com/sf/mha/mhamod/

[Lovesgirl]

Need help with the Obama makinghomeaffordable plan!

my husband and I work for a corporation which we are the officers of, and the only two employees. We get paychecks, with all the fica, tax deductions, etc. He is the only one who signed the mortgage. The makinghomeaffordable site has eligibility requirements and things you should bring to your lender to get the mod with HARP. His income is about $20,000 a year, mine is about the same. We draw dividends out of the corporation and they get coded that way when our cpa does our taxes. So if our lender looks at our income they see either $20000 a year or $40000 if they look at mine too. But if they want our tax returns, which they do. It shows adjusted gross income of $78,000 (for the combination of both of us). Does anyone know which they will look at? Can we do the Harp with just our paystubs. Reality is, our company is going to close and we will reopen a new company but won't be drawing all these dividends anymore. Other concern is if we show them all our outgoing debts, they will say we can't afford a cardboard box but we have made our house payment on time for 5 years. If anyone knows anything, please let me know.

[hopeforus]

We were given an offer back in June to make our first of the 3 trial payments in July. We had just signed a rental lease though and the end of the trial period was only 1mos before our redemption period was over in our house. I didn't want to get to the last trial payment and them tell me for whatever reason that I don't qualify anymore or not like the terms and only have 1mos to find a new home for my family. In winter. In Wisconsin lol

Our trial payments were going to be 950.00 including our escrow for property taxes and insurance. Our regular payment was 1350.00 so it was 400.00 less and a very good payment but I got really nervous about the whole "after you finish the trial period and if you qualify" part.

[AngelinaCat]

Now see, that sounds like something that will help!

Hey, wait a minute! How did I get to Mentor status???

You have more than 500 posts. That put you in the next category. Congrats.

[eddiep]

Just a heads up

The loan modification has to be "complete" before you file or they can and apparently will withdraw the offer. My attorney witnessed this in court the other day. The judge questioned the bank, pointing out that the debtor would most likely be forced into foreclosure if they pulled the mod offer. The bank said they were fine with that.

When I gave my financials they made me include credit card payments that I was not making, I told them I was filing for bk, she said it didn't matter she still had to include them. I was denied because I still couldnt afford the modified mortgage she said I know it is a chatch 22. I reapplied and told them again I was filing bk and didn't want to include cc payments that I am not making she agreed and didnt include them and I was approved.

I waited until boa told me that the mod was "complete" before I filed. Now the bk dept claims it was not complete and they are not honoring it, transferred me to loss mit who says it was complete before I filed. They have not been applying my payments correctly and this may be the problem, but if you are going to apply for a mod before you file make sure it is complete and it will take a long time for this whole process.

[hopeforus]

That's what I am trying to tell my husband. All of a sudden this morning he wants to try to save our house and to say the least I freaked the heck out. I mean, we already have a rental that we have been paying for since July 1st. We are moving tomorrow. He is feeling bad about all of this and wanting to do what's right. yeah well THIS isn't an option anymore. We cannot wait for a trial period to be over and then complete to file bk. Or even to wait that long and stay here. Not to mention we have a lease I have signed. I'd rather screw the bank at this point than screw the people who are expecting our rent yk? It's just too late for us and I hope he is able to see that. We can't change this now. It is... what it is.

[bankruptsee]

Do they mean 31% of gross income?

[RainMoM]

Now see, that sounds like something that will help!

Hey, wait a minute! How did I get to Mentor status???

Because you are very helpfull to all of us !! Not to mention honest and straight to the point, to me that's why you got promoted to a Mentor

[RainMoM]

Do they mean 31% of gross income?

yes ! A friend of mine tried out this program and chase told him that they would only drop is payments $110.00 a month.. to me that's no help

[pa308]

yes ! A friend of mine tried out this program and chase told him that they would only drop is payments $110.00 a month.. to me that's no help

But it is better than nothing..................An extra 100 a month would help out some people, me included.

[HHM]

Not to be pessimistic, but these programs are getting too many peoples "hopes"
up and only delaying the inevitable. Realize, the banks still control who gets a mode. Right now, there are 8.4MM homeowners with mortgages that are unemployed. Over 7% of mortgages (nationwhide) are in default and nearly 40% of subprime mortgages are in default. There is simply not enough money to cure this problem. In June, the banks did about 18,000 modifications, nationwide. At the same time, they did over 275,000 foreclosures.

If you have negative equity in your home, or if you are in some exoctic mortgage (interest only etc), there really is no modification that is going to help you long term. Just walk and be done with it.

[HHM]

Do they mean 31% of gross income?

Yes, 31% of gross.

[IBroke]

I went to the website and I do qualify for it, but I remember trying to get help six months ago and they told me that according to the figures I gave them including the minimum payments on my debts and living expenses they couldn't help me because I didn't have enough left to make a payment.

Six months ago? That wasn't HAMP then. IF your lender is participating in this program, I can only URGE you to take advantage of it!

In our case, our lender didn't care much about our other debts (and yes, my mother has A LOT OF IT).

They ask for the borrower's (NOT household) monthly Gross income and if approved, you'll pay 31% of that for your mortgage.

They don't care about 2nd mortgages and not that much about other debts. Ask yourself a question: If you fight for your house, what are you going to pay first? Your mortgage or your credit-cards?

It's even more likely you won't qualify if your income is TOO HIGH. This is not an ordinary mortgage-program where lenders are looking for well qualified people who make $500K a year and have a 800 Fico-score. Quite the opposite is true.

My mother has more than $250K in unsecured debt (no go figure what her monthly payments would be), a $300/month car-payment and a 2nd mortgage with a monthly payment of $1,200.

She is self-employed(!!) and gets a monthly contribution of her mother, resulting in a monthly Gross income of about $4,200.

Today, we received the trial-agreement under the HAMP with a monthly payment of $1,317.50. The original payment when this loan was granted was $3,700/month.

[IBroke]

Not to be pessimistic, but these programs are getting too many peoples "hopes"
up and only delaying the inevitable. Realize, the banks still control who gets a mode. Right now, there are 8.4MM homeowners with mortgages that are unemployed. Over 7% of mortgages (nationwhide) are in default and nearly 40% of subprimem mortgages are in the default. There is simply not enouth money to cure this problem. In June, the banks did about 18,000 modifications, nationwide. At the same time, they did over 275,000 foreclosures.

If you have negative equity in your home, or if you are in some exoctic mortgage (interest only etc), there really is no modification that is going to help you long term. Just walk and be done with it.

I have to disagree in regards to that GENERAL comment. In some cases it is, in other cases, this program can change the quality of your life.

After the trial-period, my mother will be filing Chapter 13 and strip the 2nd mortgage. Right now, we would have to pay $3,700 on the first and $1,200 on the second mortgage. That's a total of $4,900/month. After the modification and filing of Chapter 13, this amount will be reduced to $1,300/month.
Why on earth should we walk away from a 40-year fixed mortgage with a beginning interest-rate of 2% and government-incentives of $1,000/year for the first 5 years? Would anybody else offer such a loan with a Fico-score below 500? I have my doubts. In addition to that, we would avoid foreclosure.

When you walk away, you won't be living for free, either.

Finding a former model-home in the Tampa Bay area built in 2002, on a conservation-lot with a screened pool and more than 3,700 sq/ft. for less than $1,300/month is impossible - no matter if you are buying or renting.

So yes, there are situations where a modification under this plan won't help much. But for us, it does a lot and we are VERY THANKFUL for it!