Bank of America Short Sale Process Presentation

April 19, 2010

 

 On April 8, 2010, Bank of America (BOA) executives held a webinar presentation for over 10,000 Realtors to discuss BOA’s short sale process.

Tip: Refer to the Equator Agent/Homeowner Guide for step-by-step instructions 

Summary

10 Tips to Avoid Delays in Processing Time

  1. Review all documents and images for accuracy prior to uploading in Equator
  2. Ensure that property is listed in the MLS
  3. Negotiate external party fees prior to submission of HUD-1
  4. Supply HUD-1 that is valid for at least 60 days
  5. Ensure that agent and customer tasks are completed as timely as possible in Equator (i.e. accepting short sale assignment, submitting short sale offer, and uploading offer documents within 7 days)
  6. Only submit fully executed purchase offers with all appropriate addendums signed by both buyer and homeowner
  7. Work to get purchase offer representing the best possible fair market value and highest net proceeds for the lender
  8. Set appropriate expectations with buyers/sellers so they understand the complexity and resulting length of time a short sale can take
  9. Work to get a release on outside liens as early as possible
  10. The following situations will cause delays: (1) Change in buyer or agent at any time during the process; (2) Customer files bankruptcy; (3) Deal change after the approval letter is issued

Steps Already Taken to Improve the Short Sale Process

  • Increased staffing and updated training
  • Dedicated Short Sale Call Center:  1-866-880-1232
  • Hours of Operation: 8 AM – 9PM (EST), Monday -Friday
  • Extended Saturday hours – Coming Soon!
  • Equator – primary tool for initiating the short sale
  • Changed procedures to improve associate responsiveness
  • Enhanced the procedure to proactively provide loan status

Steps Underway to Enhance Programs

Home Affordable Foreclosure Alternatives (HAFA):

  • Implemented on April 5, 2010 and are following the HAFA guidelines 
  • HAFA is first in short sale waterfall of options for a homeowner
  • Remember: Some investors (Fannie Mae and Freddie Mac) are not participating; offering a cooperative or traditional short sale
  • Proactive outreach to homeowners
  • Offering a pre-approved short sale solicitation 
  • After offer is submitted, approval within 14 days
  • Promissory Note – Not required with HAFA 
  • Homeowner required to clear second liens
  • Homeowner leaves the home – no deficiency and no contribution

Cooperative Short Sales:

  • Similar in approach to HAFA but wider in scope
  • Includes homeowners who are not eligible for HAFA – non-owner occupied, jumbo loans, Fannie, Freddie
  • Currently in pilot stages with rollout expected 2nd Quarter of 2010

Steps Underway to Educate Agents

Education Materials:

  • Overview of the process so agents can lead process
  • Step-by-Step Guidelines for working through the system as an agent and homeowner
  • Tips to avoid common problems

Outreach Events to Distribute Materials

  • Large Realtor Events
  • Webinars
  • Participation with Short Sale Certification Programs

Want Agents’ Input

  • Developing mechanisms for on-going feedback on process, systems, materials
  • Will act on feedback with continuous improvements

Introduction to Equator

  • 24/7 access to the short sale system
  • Status tracking
  • Direct communication with the Short Sale Negotiator
  • Documents are uploaded directly to Equator instead of faxing
  • Streamlined approval process
  • Historical view of offers and counter offers

Coming Soon in Equator:

  • There are a few specific loan investor types (i.e., FHA/VA) that are not on the Equator system and will be added at a later date
  • Agent feedback, homeowner feedback, and internal data is being leveraged to identify system and/or enhancements for future process rollouts and educational material improvements

Agent Communication within Equator

  • Throughout the process you will receive notifications of the status of the short sale. The system automatically tracks the agent, customer, and bank tasks and will alert you after key milestones have been achieved and to let you know the next steps.
  • For specific questions/concerns you have, the negotiator assigned to the short sale is your primary contact.
  • Please ensure when sending a message in Equator you only select “Negotiator”.
  • We request that you only send messages via Equator and not directly through email. This enables our associates to effectively manage the case load and respond to agent inquires in a timely manner.
  • If you have submitted a request to the Negotiator via Equator AND there has been no response after 2 business days: You should escalate to a “Team Lead” by selecting this role in your message drop down menu.
  • In the event of an urgent issue, such as, a foreclosure sale date within 48 hours: You should immediately escalate to the “Team Lead” and “Manager”; and also call the Short Sale support team at 1-866-880-1232. 
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BREAKING NEWS: FHA Suspends 90-Day Anti-Flipping Rule for 1 Year

January 19, 2010

Effective February 1, 2010, the Federal Housing Administration (FHA) will place a one-year moratorium on its 90-day anti-flipping rule under waiver of  requirements of 24 CFR 203.37a(b)(2). , unless otherwise extended or withdrawn by the Commissioner. This will allow buyers with FHA-backed loans to buy homes that have been held for less than 90 days.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties, ” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver is limited to those sales meeting the following conditions:

  1. All transactions must be arms-length, with no interest between the seller and the buyer or any other parties involved in the sales transaction.
  2. The seller holds title to the property.
  3. LLCs, corporations, or trusts that are serving as sellers were established and operated in accordance with state and Federal laws.
  4. No pattern of previous flipping exists for the property, as shown by multiple title transfers within the last 12 months.
  5. The property was marketed openly and fairly.
  6. Assignment of a contract for sale will trigger a red flag.

In cases where the sales price is 20% or more over and above the seller’s acquisition cost, the waiver will only apply if the lender:

  1. Justifies the increase in value by retaining supporting documentation and/or a second appraisal which verifies the seller has completed legitimate renovation, repair, and rehabilitation to substantiate  the increase in value, or in cases where no work is performed, the appraiser provides sufficient explanation of the increase in value.
  2. Orders a property inspection and provides the inspection report to the purchaser before closing. The lender may charge the borrower for this inspection. The use of FHA-approved inspectors is not required.
  3. At a minimum, the inspection must include: the property structure, including: the foundation, floor, ceiling, walls and roof. The exterior, including: the siding, doors, windows, decks, balconies, walkways, and driveways. All interiors and all insulation and ventilation systems, fireplaces, and fuel-burning appliances.
  4. The waiver is limited to forward mortgages and does not apply to Home Equity Conversion Mortgage (HECM) for Purchase program.

Findings

FHA finds that eliminating the 90-day resale restriction for buyers will permit buyers to use FHA-insured funding to purchase other bank-owned properties, or properties sold through private resale, which will allow homes to resell as quickly as possible.


Credit After a Short Sale vs. Foreclosure

December 7, 2009

 

One of the most commonly asked questions about a short sale is how it will impact credit and the ability to purchase a home in the future. Whether you are a buyer, seller or investor, it’s imperative to educate yourself on this all important aspect of credit to become fully informed before making a final decision or in order to assist sellers in determining the right course of action for their financial future.

Here to help sort through the confusion is a quick primer on credit after a short sale vs. foreclosure. Remember, every situation is distinctive so these estimates represent the average experience of most individuals.

Note: Depending on the situation, circumstances may vary.

Average Time to Rebuild Credit to Purchase a Home

  • After a foreclosure: 5 – 7 years
  • After a foreclosure with extenuating circumstances such as, but not limited to: disability, death of a spouse, etc: 3 – 7 years
  • After a Deed in Lieu (DIL) of foreclosure: 4 – 7 years
  • After a Short Sale: 0 – 2 years

Other Alternatives

The above averages represent typical buying patterns for those using regular lenders to obtain a conventional loan or government backed loans; private investors are still viable options that enable many people to purchase another home immediately after any type of financial fiasco, including foreclosure. However, mortgage rates tend to be less favorable and requirements more stringent than ever. Just a few years ago it was quite easy to obtain a sub-prime mortgage for a relatively low rate above the preferred status, but today, much of that has changed. While it is still possible to obtain the equivalent of a sub-prime mortgage, be prepared to come up with a much larger down payment and higher overall rates.

Short Sales Win Hands Down

Sellers wishing to minimize damage to their financial future clearly come out ahead when using a short sale but it’s still possible to further decrease the downside by avoiding a 60-day late payment, working closely with the lender to achieve a quick price agreement, and setting aside as much funds as possible for a new loan. In fact, homeowners that maintain a solid payment history and work-out an agreeable short sale deal early may find it desirable to downsize to a new home by setting aside additional funds equal to 20% down. With Private Mortgage Insurance (PMI) and a reduced debt-to-income (DTI) ratio, sellers are finding it possible to take advantage of lowered property values to immediately purchase another home for a fraction of the cost (and debt burden). 

Conclusion: It’s a win-win for all involved but, only if you understand the benefits and work aggressively to seal the deal.

*This post has been adapted from Real Estate News & Commentary by Chris McLaughlin


eModifyMyLoan Offers Affordable Help

September 20, 2009

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eModifyMyLoan gives you the tools you need to handle the loan modification process directly with your lender from the comfort of your home, without hiring an expensive modification company. Simply fill out the online form and then e-mail, fax, or print out and deliver your eModifyMyLoan package to your lender for consideration.

Why Pay a Loan Modification Company Thousands of Dollars When You Can Do it Yourself?

Struggling to make your mortgage payment? Then negotiate a lower payment with your lender. With eModifyMyLoan, you can create a complete loan modification package for your lender in less than an hour. YOU DON’T PAY UNLESS YOU ARE 100% SATISFIED. IF YOU’RE NOT COMPLETELY SATISFIED, THEN IT’S FREE.

Why Choose eModifyMyLoan

If you are looking for a way to lower your monthly mortgage payments or avoid foreclosure through a short sale negotiation, you have three basic options:

  1. Pay a professional
  2. Research and submit the information yourself
  3. Use eModifyMyLoan to generate the required paperwork

Which Solution is Right for You?

Some consumers turn to attorneys or loan modification companies to help them through the process. On average, you can expect a $3,000 fee to process your paperwork, which will include creating the documents and representing you with the lender. There is no guarantee of success and many lenders do not treat the paperwork submitted by these organizations with any more priority than they do the documents submitted by individual homeowners.

Some consumers have opted to attempt the process on their own and have quickly become frustrated and overwhelmed. Because many lenders are swamped with phone calls regarding loan modifications and short sales, they often do not return calls from borrowers, even though they may be on the brink of falling behind on their payments. Some banks have limited days and hours of when you can call and request loan modification companies, while others prioritize their responses to only homeowners that are seriously delinquent or verging on foreclosure. As a result, if you are struggling financially but have not yet fallen behind on payments, you may never receive a return call.

The third option is to use eModifyMyLoan. With the online solution, you are guided through a series of questions to easily create the proper loan modification package and calculate the mortgage payment that you can afford. By supplying the lender with the complete eModifyMyLoan package with all of the necessary paperwork, including your personal finance statement and hardship letter, you increase your chances of more quickly achieving your goal of easing financial pressure. Cost to purchase is $129. Plus, it is backed by a 120-day guarantee.

Choose eModifyMyLoan today for an affordable way to undertake the otherwise daunting task of improving your financial situation with a loan modification or short sale.


Home Affordable Modification FAQs

June 8, 2009

LoanModificationOptions

Can Making Home Affordable help me if my loan is not owned or securitized by Fannie Mae or Freddie Mac?

Yes. Making Home Affordable offers help to borrowers who are struggling to keep their loans current or who are already behind on their mortgage payments. By providing mortgage servicers with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

Do I need to be behind on my mortgage payments to be eligible for a Home Affordable Modification?

No. Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default, for example, because their mortgage payment has recently increased to a level that is not affordable. If you have had or anticipate a significant increase in your mortgage payment or you have had a significant reduction in income or have experienced some other hardship that makes you unable to pay your mortgage, contact your servicer. You will be required to document your income and expenses and provide evidence of the hardship or change in your circumstances.

I have a second mortgage. Am I still eligible?

Yes, but only the first mortgage is eligible for a modification.

How do I know if my servicer is participating? Are all servicers required to participate?

Servicer participation in the program is voluntary. However, the government is offering substantial incentives to servicers and investors, and it is expected that most major servicers will participate. Participating servicers will sign a contract with Treasury’s financial agent, through which they agree to review every potentially eligible borrower who calls or writes asking to be considered for the program.

What happens after five years?

If the modified interest rate is below the market rate, the modified rate will be fixed for a minimum of five years as specified in your modification agreement. Beginning in year six, the rate may increase no more than one percentage point per year until it reaches the rate cap indicated in your modification agreement. The cap is equal to the prevailing market interest rate on the date the modification is finalized as published by Freddie Mac based on a survey of its customers. This cap means that your rate can never be higher than the market rate on the day your loan was modified. If the modified rate is at or above the prevailing market rate, as defined above, the modified rate will be fixed for the life of the loan.

Will the modified loan include property taxes and homeowners insurance?

Yes. The modification payment will include a monthly amount to be set aside (escrowed) to pay taxes and insurance when they become due. This escrow is required even if your prior loan did not include an escrow.

How low can my interest rate go?

Treasury is providing incentives to your investor to write the interest down to as low as 2%, if necessary to get to a payment that you can afford based on your income.

What happens if that is not enough to get to an affordable payment?

If a 2% interest rate does not result in a payment that is affordable (no more than 31% of your gross monthly income), your servicer will:

  • First try to extend your payment term. At the servicer’s option your payments could be extended out to 40 years.
  • If that is still not sufficient your servicer may defer repayment on a portion of the amount you owe until a later time. This is called a principal forbearance.
  • A portion of the debt could be also be forgiven. This is optional on the part of the investor. There is no requirement for principal forgiveness.

Could I end up with a balloon payment?

Yes. If your servicer determines that a principal forbearance is required to get your monthly payment to an affordable level, the amount of the forbearance, say for example this was $20,000, would be subtracted from the amount used to calculate your monthly mortgage payment, but you would still owe the money. You would have a $20,000 balloon payment that had no interest and was not due until you paid off your loan, refinanced or sold your house.

What happens if I am unable to make payments during the trial period?

Borrowers who are unable to make three payments by the end of the trial period are not eligible for a Home Affordable Modification. However, you may be eligible for other foreclosure prevention options offered by your servicer.

How much will a modification cost me?

Borrowers who are behind on payments or at risk of imminent default often do not have cash to pay for the expenses of a loan modification. Borrowers who qualify for a Home Affordable Modification will never be required to pay a modification fee or pay past due late fees. If there are costs associated with the modification, such as payment of back taxes, your servicer will give you the option of adding them to the amount you owe on your mortgage or paying some or all of the expenses in advance. Paying these expenses in advance will reduce your new monthly payment and save interest costs over the life of your loan.

If you would like assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a counseling fee. Borrowers should beware of any organization that attempts to charge an upfront fee for housing counseling or modification of a delinquent loan, or any organization that claims to guarantee success.

Is housing counseling required under this program?

Borrowers, especially delinquent borrowers, are strongly encouraged to contact a HUD-approved housing counselor to help them understand all of their financial options and to create a workable budget plan. These services are free. However, housing counseling is only required for borrowers whose total monthly debts are very high in relation their incomes. It is voluntary for other applicants.

When you apply for a Home Affordable Modification, your servicer will analyze your monthly debts, including the amount you will owe on the new mortgage payment after it is modified, as well as payments on a second mortgage, car loans, credit cards or child support. If the sum of all of these recurring monthly expenses is equal to or more than 55% of your gross monthly income, you must agree to participate in housing counseling provided by a HUD-approved housing counselor as a condition of getting the modification.

I heard the government was providing a financial incentive to borrowers. Is that true?

Yes. Borrowers who make timely payments on their modified loans will receive success incentives. For every month you make a payment on time, Treasury will pay an incentive that reduces the principal balance on your loan. The incentive will be applied directly to your loan balance annually and over five years the total principal reduction could add up to $5,000. This contribution by the Treasury will help you build equity faster.

I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for a Home Affordable Modification?

No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage servicer will check to see if the dwelling is your primary residence. Misrepresenting your occupancy in order to qualify for this program is a violation of Federal law and may have serious consequences.

I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?

Yes. Mortgages on two, three and four unit properties are eligible as long as you live in one unit as your primary residence.

I owe more than my house is worth. Will a Home Affordable Modification reduce what I owe?

The primary objective of the Making Home Affordable Program is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Investors may, but are not required to, offer principal reductions. It is more likely that your servicer will use interest rate reductions in order to make your payment affordable.

I have an FHA loan. Can it be modified under the making Home Affordable Program? Are all loans eligible?

Most conventional loans including prime, subprime and adjustable loans, loans owned by Fannie Mae, Freddie Mac and private lenders and most loans in mortgage backed securities are eligible for a Home Affordable Modification. The Administration is working with the Congress to enact legislation that will allow FHA and VA to offer modifications consistent with Making Home Affordable in the near future. Currently loans insured or guaranteed by these agencies are being modified under other programs that also enable borrowers to retain homeownership.

How do I apply for a modification under the Making Home Affordable Plan?

If you meet the general eligibility criteria for the program, you should gather the financial documentation that your servicer will need to determine if you qualify. Once you have this information, you should call your mortgage servicer and ask to be considered for a Home Affordable Modification. The number is on your monthly mortgage bill or coupon book.

If your loan is current, please be patient as it may take some time before servicers are able to process all applications. However, servicers immediately can begin reviewing the eligibility of borrowers.

If you would like to speak to a housing counselor you can call 1-888-995-HOPE (4673). HUD-approved housing counselors can help you evaluate your income and expenses and understand your options. This counseling is FREE.

If you have already missed one or more mortgage payments and have not yet spoken to your servicer call them immediately.


How long will the Home Affordable Modification Program be available?

The program expires on December 31, 2012. Your trial modification must be in place by that date.

My loan is scheduled for foreclosure soon. What should I do?

Many servicers have made a commitment to postpone foreclosure sales on all mortgages that meet the minimum eligibility criteria for a Home Affordable Modification until those loans can be fully evaluated.

However, borrowers whose loans have been scheduled for foreclosure or any borrower that has missed one or more mortgage payments and has not yet spoken to their servicer should contact the servicer immediately. Borrowers may also contact a HUD-approved housing counselor by calling 1-888-995-HOPE (4673).

Who is my “loan servicer? Is that the same as my lender or investor?

Your loan servicer is the financial institution that collects your monthly mortgage payments and has responsibility for the management and accounting of your loan. Your servicer may also be your lender, which means they own your loan, however, many loans are owned by groups of investors.

Traditionally, banks used money deposited in customers’ savings accounts to make loans. They held the loans, earning the interest as borrowers repaid over time. Banks were thus limited in the number of loans they could make because they had to wait to make new ones until savings deposits grew or existing borrowers repaid their loans. Many families who wanted to own a home were unable to do so because there was not a steady supply of money to lend.

Over time, banks started to turn loans into cash by pooling large groups of loans together to create mortgage backed securities that could be sold to investors such as pension funds and hedge funds. The investors get the right to collect future payments and the bank gets cash that it can use to make more loans. Investors hire loan servicers to collect payments and interact with customers.

If you have questions about your loan or you are behind on your payments you should call your loan servicer at the number on your payment coupon or monthly mortgage statement.

Why does my loan servicer have to ask the investor if they can do a loan modification?

If the organization that services your loan does not own it, your servicer may need to get permission from the owner or investor before they can change any of the terms of your loan. Generally, there is a contract between the servicer and the investor that states what kind of actions the servicer is allowed to take. Most of these contracts, called pooling and servicing agreements (PSAs), give the servicer a lot of leeway to make modification decisions, so long as the modification provides a better financial outcome for the investor than not modifying the loan.

What should I do if my servicer tells me that the investor is not participating in Making Home Affordable?

Borrowers should check first to see if their servicer is listed. If so, you should call your servicer back and ask to speak to a supervisor or you may contact a HUD-approved housing counselor for assistance. If your servicer or investor is not participating in the program, you should ask your servicer or a housing counselor about other workout options that may be available.

 


Making Home Affordable Plan

May 23, 2009

MHA_Logo

The Obama Administration has introduced a plan to try to stabilize the housing market called the Making Home Affordable (MHA) Plan. Through this plan, up to an estimated 7 – 9 million American families may be eligible to refinance or modify their loans to a payment that is affordable now and into the future.

Under this plan, there are two programs:

  • Home Affordable Refinance Program
  • Home Affordable Modification Program

Home Affordable Refinance Program

The Home Affordable Refinance Program gives up to an estimated 4 – 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. 

Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home. A Home Affordable Refinance will help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage.

Will the Home Affordable Refinance Program help me?

Eligible borrowers who are current on their mortgages but have been unable to take advantage of today’s lower interest rates because their homes have decreased in value may now have the opportunity to refinance. Through the Home Affordable Refinance Program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they placed in mortgage backed securities.

How do I know if I am eligible?

You may be eligible if:

  • You are the owner occupant of a 1 – 4 unit home
  • The loan on the property is owned or securitized by Fannie Mae or Freddie Mac (If you don’t know, click here)
  • At the time you apply, you are current on your mortgage payments (current means that you haven’t been more than 30 days late on your mortgage payment in the last 12 months or if you have had the loans for less than 12 months, you have never missed a payment)
  • You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house (You may be eligible if your first mortgage does not exceed 105% of the current market value of your home. For example, if your property is worth $200,000 but you owe $210,000 or less on your first mortgage, you may be eligible. The current value of your property will be determined after you apply to refinance)
  • You have income sufficient to support the new mortgage payments, and
  • The refinance improves the long term affordability or stability of your loan

You may also take the Eligibility Test to determine if you qualify.

How do I apply for a Home Affordable Refinance?

You should call your mortgage servicer or lender and ask about the Home Affordable Refinance application process. The number is on your monthly mortgage bill or coupon book.

Note: Please be patient. Lenders and servicers are implementing the program now and there might be a slight delay before they are ready to process all applications. In the meantime, it will help your lender and speed up the application process if you gather some information and documents before you call.

APPLICATION CHECKLIST:

  • Information about your mortgage such as your monthly mortgage statement and
  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources
  • Your most recent income tax return
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and monthly payments on all your other debts such as student loans, car loans, personal loans, etc.

Home Affordable Modification Program

The Home Affordable Modification Program will reduce monthly payments on existing first lien mortgages for up to an estimated 3 – 4 million at-risk homeowners.

Many homeowners are struggling to make their monthly mortgage payments perhaps because their interest rate has increased or they have less income. A Home Affordable Modification will provide them with mortgage payments they can afford.

Will the Home Affordable Modification Program help me?

If you can no longer afford to make your monthly payments, you may qualify for a loan modification to make your monthly payments more affordable. Millions of borrowers who are current, but having difficulty making their payments and borrowers who have missed 1 or more payments may be eligible.

How do I know if I am eligible?

You may be eligible if:

  •  Your home must be an owner-occupied primary residence (verified with tax return, credit report, and other documentation such as a utility bill)
  • Your home must be a single-family 1 -4 unit property (including condominiums, cooperatives, and manufactured homes affixed to a foundation and treated as real property under state law)
  • Your home must not be vacant or condemned
  • First lien loans must have an unpaid principal balance (prior to capitalization of arrearages) that is equal to or less than:
  • 1 unit properties = $729,750
  • 2 unit properties = $934,200
  • 3 unit properties = $1,129,250
  • 4 unit properties = $1,403,400
  • Your mortgage must have originated on or before January 1, 2009
  • Have a mortgage payment (including taxes, insurance, home owner’s association dues) that is more than 31% of your gross monthly income (If you are uncertain, click here)
  • Have a mortgage payment that is not affordable, perhaps because of a significant change in income or expenses

You may also take the Eligibility Test  to determine if you qualify.

Note: Eligibility requirements are simply government guidelines. Guidelines may change, and lenders make exceptions, if it is in their best interest to do so.  In other words, homeowners should not count themselves out.  If they are having trouble making their house payment, they should explore the loan modification option.  Sometimes, the only way to determine whether you qualify is to apply.

How do I apply for a Home Affordable Modification?

You should call your mortgage servicer or lender and ask about the Home Affordable Modification application process. The number is on your monthly mortgage bill or coupon book.

Note: Please be patient. Lenders and servicers are implementing the program now and there might be a slight delay before they are ready to process all applications. In the meantime, it will help your lender and speed up the application process if you gather some information and documents before you call.

APPLICATION CHECKLIST:

  • Information about your gross monthly  (before taxes) income, including recent pay stubs, if you receive them or documentation of income you receive from other sources
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about your first mortgage, such as your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on your house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans, car loans, personal loans, etc.
  • A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable

Note: Many lenders have made a committment to delay foreclosure on all loans that meet the minimum eligibility criteria for a home affordable modification

Free Counseling Help

There are two options for free counseling help:

  • Contact me via email freezeforeclosure@gmail and we’ll set up a time to talk.
  • If you don’t feel comfortable talking to me then another free resource is to contact a HUD-approved housing counselor. They provide the same advice I do. The only difference is who you feel more comfortable working with.

What to expect?

Either the housing counselor or I will talk to you about your situation and help you decide what mortgage options are best for you. We will explain what documents you will need to provide to your mortgage company. We can also help you make a budget so that you can meet your monthly mortgage payment and other expenses. There is no charge to work with either one of us.

Before you call 

Gather the following documents:

  • Information about your gross monthly  (before taxes) income, including recent pay stubs, if you receive them or documentation of income you receive from other sources
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about your first mortgage, such as your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on your house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans, car loans, personal loans, etc.
  • A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable

Immediate Assistance

If you are delinquent on your loan payments and need immediate assistance, call myself at 571-249-4357 or 888-995-HOPE (4673)


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