Can This LOAN can be SAVED?

Mortgage and Lending NMLS #94045

Sadly, most of us know someone who is in a stressed mortgage situation! The sheer numbers of files landing on bank negotiator's tables is astounding. Here's an update.

NEWS: Making Home Affordable Released March 4, 2009  

FIRST:To qualify for the Obama Plan, Making Home Affordable, first, find out if Freddie Mac or Fannie Mae holds your loan: Call your lender or loan servicer (number on your mortgage statement) and ask them if ...or contact Freddie Mac or Fannie Mae directly

  • 1-800-FREDDIE (8am to 8pm EST)
  • 1-800-7FANNIE (8am to 8pm EST)

NEXT: Qualifying for "Making Home Affordable":  If you have a Fannie or Freddie loan and wish to investigate this program, here is a link to the Treasury summary:  

This program only applies to the 60% of loans held by Fannie/Freddie. Many are insured by AIG, so all three Government Sponsored Enterprises are receiving TARP and Bailout funds to assist in modifying 'troubled assets'. The government programs are meant for homeowners in financial distress. They are not designed to rescue the financially irresponsible or those who can afford traditional means. You must be able to demonstrate an ability to pay the new terms. Expect lenders to resist lower interest rates. To date many of the bank negotiated modifications have already failed. You are essentially negotiating on your own. We understand banks are hiring commissioned staff with incentives to maintain higher terms.  

Making Home Affordable Plan in 2 Parts: 

1. Refinances:It is not clear how his part of the program will be implemented or enhanced by the Plan. Supposedly the banks will use their incentives to train and hire staff? Lenders are already overwhelmed by the sheer number of requests. It is scheduled to end June 1, 2009 (the short window looks ominous here).  

2. Modifications must be completed by December 2012 under this section of the plan; if indeed you have a Fannie or Freddie. The basic requirement is that you can meet their 31% maximum debt to income ratio and you can document income to fall within that range. It seems ironic that this plan does not apply to non conventional loans since they have the highest default rate. AH...I forgot: AIG didn't insure any non conventional mortgages and we MUST help out AIG!

Not a Fannie or Freddie? If your mortgage does not fall into this camp, contact a HUD approved counseling organization for guidance. They will put you in touch with the right person at your lender, after which you are on your own to negotiate.

  • Hope Alliance: 800 449 9392 
  • Consumer Credit Counseling: 800 308 2227

OR: Ask your local mortgage professional to refer you to a private loan modification resource in your state. It's important that this person is licensed and bonded and any fee they request is put into a trust account pending your outcome. You can certainly hire an attorney. We know of folks trying all options and neither timing nor results are predictable. 

BEWARE of Scams! Be wary of callers or email offering to eliminate your debt or modify your loan for a hefty upfront fee. If you have concerns, call your State Attorney General or Consumer Protection Agency. If you are in the modification process now, you are ahead of the wave. Some lenders are receiving 3,000 files per day requesting modification.  It remains to be seen how well this will meet the needs of as many as 9 million borrowers anticipated to be in or very near distress.  

Three years ago I was told I was crazy to suggest that banks could choose to fix their rates rather than have the ARM rates re-set and put so many people in distress.  For more about the Loan Modification process, visit my blog:  Note the updates in red at the bottom...I will update my blog as news becomes available. I am following several cases now to see which approach nets the best result. Be prepared to be proactive and patient.

Happy Spring Equinox! (this Friday)




susan templeton
mortgage planner


510-MB-24707-50145    An approved Conventional, FHA/VA/USRDA and Reverse Mortgage Broker

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Christine Farkas 03/23/2009 10:20 AM
Mortgage / Finance
Washington Whatcom County Bellingham Fairhaven
Posts to Localism
Built Green Certified Agents
It's all about them (ThemThem)
loan modification
housing rescue
home affordable plan

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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Susan: Thanks for the summary. We'll see if this plan has any teeth. The other ones haven't so I'm skeptical. Take care.

Mar 17, 2009 03:10 AM #1
Susan Templeton
Bellingham, WA

Yes, Paul, it remains to be seen what teeth this plan may have! I think the public is more than just a little skeptical of all these 'rescues' and 'secure plans' and 'affordable' initiatives in the face of massive AIG and Fannie/Freddie bailouts and executive bonuses. You have to wonder if our government thinks we are THAT STUPID.

Mar 17, 2009 05:50 AM #2
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing

Susan, this is a good overview of the plan.  Please know that the government advise for homeowners to call Hope Now is an exercise in futility.  Hope Now is understaffed, overwhelmed and under educated on the issues at hand.  I don't know of a single person who has been helped by calling Hope Now.  I won't bore you with my comments on Consumer Credit Counseling, just know that these companies are usually owned by banks and don't have the consumers best interest in mind.

A good professional loan modification company understands how to package and present the loan modification, short sale or deed in lieu request to lenders.  Just like a good mortgage broker who understands how to properly package a loan, a good loan modification company can have a huge impact on the success of a loan modification.

It's about asking the right questions and putting together the package so that the loan gets modified in the best interest of the homeowner.

Mar 17, 2009 06:56 PM #3
Susan Templeton
Bellingham, WA

Kate I agree that Hope Now is understaffed! However, at least two people I know have personally been directed to their lender and are handling the process on their own successfully so far. NOT for the faint of heart however. The problem is that once folks are in a bind they have less patience and cannot see or communicate very clearly because of their clouded state of mind. I do advise professional help but taking first steps yourself may help a 'reality check' for expectations. After all, it took most people a few years to get where they are today...we cannot fix them up with a handy new loan and just send them on their way!

Mar 18, 2009 04:09 AM #4
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