HUD/NACA/THird Party Paranoid Fanatics Messing up Modifications

[cinderella]

 

Do you know how many times modifications are delayed and the process bottlenecks because a borrower is so paranoid about the lender scre!ing them over they refuse to discuss the mod?

 

People are such nutsos these days. I see people lie, throw temper tantrums the lender won't finance their credit card payments, and so on, and when you have a bona fide mod. ready to move forward, you get these nutsos.

 

I CAN'T TALK ABOUT MY ACCOUNT!!! I'm REPRESENTED!!!! I DON'T ANY OF YOUR DEALS!!!

 

I can honestly say, at this point with specific investors, having a HUD/NACA/3Rd party makes zero difference. There is no negotiating. There is no discretion. There are transparent guidelines that are followed.

 

You'll spend hours, push back tens and tens of files, chasing these files. Because the borrower has psyched themself up that the world is out to get them and they HAVE TO THEIR hud/naca/third party account for their income.

 

Geez. I wander if these people who refuse to give their income and simple things are the ones that should be watched.

[NMORGAN]

Where are you coming from with your calling those of us seeking modifications terms such as "nutso", in my case, as part of a class-action settlement with countrywide now Bank of America? I dutifully followed every step of any and every program, Home for Homeowners, Heart, etc. suggested to me by cw only to have five separate attempts at modification fail because of mishandling at the bank, the third party agents on foreign shores not being able to scan documents into the system. I was denied because I made too much money, too little money, bad debt ratio, value of property and failure to follow through with paperwork all in the same letter. CW lost my faxes on three separate occasions.

 

I am not whining or expecting any pity modification. I have a loan with a 9.99 ARM with perfect payment history although it is a terrible strain and I qualify for a modification based on statements by the Illinois Attorney General. CW and now Bank of America have been unable to properly follow their OWN guidelines. As a result of their incompetency I went to NACA and I am unable to converse directly with the bank because of their representation.

 

I do not understand the tone of your recent posts. If you have nothing to add to be of help to people lost in the maze of modification bewilderment why respond with such criticism? I am not " nutso" or "crazed". I am instead "offended."

Edited June 19, 2009 by NMORGAN

[cinderella]

Where are you coming from with your calling those of us seeking modifications terms such as "nutso", in my case, as part of a class-action settlement with countrywide now Bank of America? I dutifully followed every step of any and every program, Home for Homeowners, Heart, etc. suggested to me by cw only to have five separate attempts at modification fail because of mishandling at the bank, the third party agents on foreign shores not being able to scan documents into the system. I was denied because I made too much money, too little money, bad debt ratio, value of property and failure to follow through with paperwork all in the same letter. CW lost my faxes on three separate occasions.

 

I am not whining or expecting any pity modification. I have a loan with a 9.99 ARM with perfect payment history although it is a terrible strain and I qualify for a modification based on statements by the Illinois Attorney General. CW and now Bank of America have been unable to properly follow their OWN guidelines. As a result of their incompetency I went to NACA and I am unable to converse directly with the bank because of their representation.

 

I do not understand the tone of your recent posts. If you have nothing to add to be of help to people lost in the maze of modification bewilderment why respond with such criticism? I am not " nutso" or "crazed". I am instead "offended."

 

HUH? Did you read my post? Any of it?

 

Where are you coming from exaggerating and personalising to your specific situation that has absolutely nothing to do with the post?

 

Please re-read my post before responding with something that has absolutely nothing to do with your situation.

 

I am saying, which again doesn't apply to you, it is very common to have permanent modifications with reduced payments ready to go. However, unfortunately, due to the nuttiness of borrowers, it becomes very difficult, if not impossible to modify these loans. Again, this may not apply to you, but I can tell you for a fact it happens tens and tens of times daily. But you were never given a mod, and again, that isn't what we are talking about, we are talking about borrowers that have mods ready to go but remain stagnant and can't move.

 

We are talking THOUSANDS OF MODIFICATIONS READY TO GO, but you can't modify these loans.

 

Why?

 

Because borrowers refuse to talk unless their $3,000 loan mod company, the HUD counselor they talked to two months ago, or the NACA counselor is there. When you have a perm. mod with a $500 reduced payment, you can't do anything. Some people are so nuts and paranoid and despite their fantasies of the lender being out to get them, the truth is, you can't modify and reduce the payment because they won't discuss the account.

 

Yeah, they probably do hurt themselves and create a myriad of backlogged files because these files remain stagnant and can't be moved because it is often impossible or extremely to difficult to discuss the account with a borrower that believes they can do better with representation, when the reality is, in this specific situation, they won't, but more importantly, the accounts pile up and can't be moved. That isn't the fault of the lender, but that of the borrower. When the account is finally is discussed, it is outdated, everything has to be updated and the whole account has to be reviewed.

[radi8]

They're not "nutso's", they just don't trust the banks. They DO trust HUD/NACA and don't want to discuss details with the bank unless their rep. is present.

I agree with you that they will get the same deal, with or without representation, but the homeowner's don't believe that- and the banks are the only ones telling them that. The same banks they don't trust.

 

Why are they causing pile-ups? Can't the banks just set their files aside until they either respond or expire- and move on to the next?

[NMORGAN]

I believe that you did not read MY post clearly. I made myself available to talk freely about modifications for nine months. I sent every piece of documentation requested. I spoke to every negotiator without having any representation and would be quite amenable to discussing a modification offered without naca representation. My point was that there was NO movement from the bank's end even though I ended up in contact with the president of bank of america home loans in order to find out what if any movement was made in addition to the Attorney General of Illinois and my local elected officials. Perhaps your experience is different where you work and having read your previous posts I believe that you are genuinely committed to helping with modifications and perhaps irritated by the selfish seeming people who want what their neighbors got. I can tell you with certaintude that CW/ Bank of America is currently and has been for at least one year a black hole. Left hand does not know what right hand is doing. Imagine the confusion and desperation of all of those customers who are in worse shape than me because of life circumstances and level of financial sophistication. I have experience in financial matters, real estate, and counseling and I find the process intimidating and outrageous. I am simply suggesting that I understand people's paranoia. If you try for a year to achieve a goal and go around in circles talking to rude customer service people and faxing everything multiple times it becomes overwhelming to the average person. I just wanted you to entertain that possibility rather than to dismiss them as "nutso."

[cinderella]

They're not "nutso's", they just don't trust the banks. They DO trust HUD/NACA and don't want to discuss details with the bank unless their rep. is present.

I agree with you that they will get the same deal, with or without representation, but the homeowner's don't believe that- and the banks are the only ones telling them that. The same banks they don't trust.

 

Why are they causing pile-ups? Can't the banks just set their files aside until they either respond or expire- and move on to the next?

 

For the most part, we will close the file or leave it limbo. There are tons and tons of files, you can't waste time backtracking and playing referre for a borrower. Either they need help and want to receive help, or they want to continue on a wild goose chase. If we have a delusional borrower that insists we are the antichrist or that there are better deals to be had with 3rdparties, there is really nothing to be done.

 

And these borrowers have a tendency to be kind of scary. Most of them probably do believe the world is out to get them, when honestly, I question who is doing the getting. We will have mods w/reduced payments ready to go, but they believe they can do better. It is really bizarre. They will often be the ones that want to recite every little expense in their lives from cat litter, to the cost of postage stamps, to whatever, when really, under mhap, NOBODY CARES ABOUT YOUR EXPENSES!!! They figure if they overinflate their expenses, that it will matter. No, it is grossincome to housing expenses, for the most part everything else is irrelevant.

 

You know those stories about customer clients, even though this is loss mitigation, you multiply the nuttiness time a billion. I had a person leave a message w/me they are contacting the President of our company....the President of this.....the horror of the evil banks........

 

Well, her mod was ready to go. We were reducing her interest rate to 3.25 percent for five years, well she rejected saying without a 30 year lock she was getting scr!wed. Her rate would never have gone past 5.4 after 7 years, .01 more than her current rate and she was going to save $200 plus a month. Still, for a person that complains about a hardship and inability to pay to reject this and go on and on and on about how they are being scr!wed, is nutty. Who would reject saving $200 a month for the next five years when they have stated without help, they would be unable to pay their mortgage.

 

In reality Radi, you'd be better off dealing with me or most loss mitigators. Most likely, I could probably move a file and make something happen today or in the very near future and know the system of where I work better than an outsider. If the objective is to obtain relief for a hardship situation, go to the one that can make it happen now, the loss mitigator. Third parties, are a nightmare, there is often no authorization to represent the borrower on file, there is zero contact info., it is doubling the workload even if you there is a right to discuss the account with a third party, and additionally, in my area, you are 100% better off dealing with me than taking a file and putting it limbo and by the time the nutty borrower comes to their senses and contacts us in a month or two wandering why nothing has been done, the financials are outdated and the entire mod has to be reviewed.

 

You say not to trust the banks, but Radi, every week I pass off dozens of files for modifications and I work with borrowers that have a genuine hardship to get a mod.

 

For every one complaint on this board about the banks, I could show 50 more good things from borrowers that have been helped by me with mods. Still, to say there are not nutsos in the system or those that don't hurt themselves by their nuttiness, wouldn't be true.

 

Time is everything. When you go to work and you have 27 messages on your voicemail since you left and you have to work Saturdays so you can actually reach borrowers to work out a mod., yeah, it is a shame when you have borrower on the line that won't discuss the accounts. Like I told a guy today who said he was in the middle of eating dinner, great! Sounds like perfect timing, lets finish this, because it is Saturday and I'm working and I've got you on the line right now, lets finish this. Someone tells me there at their son's baseball game. Great! Sound like a perfect time to review this and the modification.

Edited June 20, 2009 by cinderella

[Move4ward]

I am paying $2k a month towards credit cards and auto loan. That's about 70% of my net income. I'd take that $200/month savings off a mortgage payment, if I had one. Every dollar helps, when you are living on less than $1k a month.

[cb2cb]

...

They will often be the ones that want to recite every little expense in their lives from cat litter, to the cost of postage stamps, to whatever, when really, under mhap, NOBODY CARES ABOUT YOUR EXPENSES!!! They figure if they overinflate their expenses, that it will matter. No, it is grossincome to housing expenses, for the most part everything else is irrelevant.

 

Are you sure about this???

 

If the total expenses don't matter, then why are people posting that they have been denied a mod because their total expenses exceeded their total income (they had negative cash flow).

 

There was someone who posted with gross income of $3800 and total expenses of $4200. His/hers housing expense, including taxes and interest was $2000.

The 31% target could be achieved with a rate reduction to 2% and amortization extention to 40 years with no principal forbearance/reduction required.

Seemingly, this would be a perfect candidate for a mod, yet they were denied due to "insuficient income".

 

Insuficient income for what? With a 31% mod, they would comfortably afford their new payments.

 

As far as total expenses are concerned (back end ratio of 55 or higher) the HAM Program only requires the borrowers to sign a letter that they will work with a HUD approved counsellor to reduce their total debts.

 

So if "nobody cares about your expenses", then why would these people be denied a mod?

[cinderella]

...

They will often be the ones that want to recite every little expense in their lives from cat litter, to the cost of postage stamps, to whatever, when really, under mhap, NOBODY CARES ABOUT YOUR EXPENSES!!! They figure if they overinflate their expenses, that it will matter. No, it is grossincome to housing expenses, for the most part everything else is irrelevant.

 

Are you sure about this???

 

If the total expenses don't matter, then why are people posting that they have been denied a mod because their total expenses exceeded their total income (they had negative cash flow).

 

There was someone who posted with gross income of $3800 and total expenses of $4200. His/hers housing expense, including taxes and interest was $2000.

The 31% target could be achieved with a rate reduction to 2% and amortization extention to 40 years with no principal forbearance/reduction required.

Seemingly, this would be a perfect candidate for a mod, yet they were denied due to "insuficient income".

 

Insuficient income for what? With a 31% mod, they would comfortably afford their new payments.

 

As far as total expenses are concerned (back end ratio of 55 or higher) the HAM Program only requires the borrowers to sign a letter that they will work with a HUD approved counsellor to reduce their total debts.

 

So if "nobody cares about your expenses", then why would these people be denied a mod?

 

If I made a gross income of $100 a month, should my housing expense, PITI + HOA be reduced to $31?

 

Of course not. It won't happen. Under the Making Home Affordabe Program, if your total housing expense can't be taken down 31% at 2%/40 years and you have equity, it will be a denial. Even if you are upside down, it could be a denial because the principal forbearance will exceed the property value when 2%/40 years won't accomplish the 31% HTI.

 

As far as credit cards and whatever revolving debt a homeowner has unrelated to their principal residence, it won't matter, it won't be a denial for that reason under this program. Requiring a homeowner to undergo CCCS is not a denial, unless of course the homeowner refuses.

 

There are many borrowers that may be in financial distress. But MHAP is designed to keep out borrowers whose financial distress is unrelated to their housing expense on their principal residence. These would include those with high cc payments, investment properties without tenants, high car payments, high cost of living, high revolving debt, high contibutions to their 401k's, private tuitition expenses, etc. etc. etc.

 

You see it all the time. It is based on gross income to housing expense..........you will often see people with financial distress, but isn't from their housing expense to gross income, it is their other expenses unrelated to housing. The mhap program doesn't consider these unrelated expenses except for CCCS purposes, which it shouldn't.

Edited June 23, 2009 by cinderella

[cb2cb]

...

They will often be the ones that want to recite every little expense in their lives from cat litter, to the cost of postage stamps, to whatever, when really, under mhap, NOBODY CARES ABOUT YOUR EXPENSES!!! They figure if they overinflate their expenses, that it will matter. No, it is grossincome to housing expenses, for the most part everything else is irrelevant.

 

Are you sure about this???

 

If the total expenses don't matter, then why are people posting that they have been denied a mod because their total expenses exceeded their total income (they had negative cash flow).

 

There was someone who posted with gross income of $3800 and total expenses of $4200. His/hers housing expense, including taxes and interest was $2000.

The 31% target could be achieved with a rate reduction to 2% and amortization extention to 40 years with no principal forbearance/reduction required.

Seemingly, this would be a perfect candidate for a mod, yet they were denied due to "insuficient income".

 

Insuficient income for what? With a 31% mod, they would comfortably afford their new payments.

 

As far as total expenses are concerned (back end ratio of 55 or higher) the HAM Program only requires the borrowers to sign a letter that they will work with a HUD approved counsellor to reduce their total debts.

 

So if "nobody cares about your expenses", then why would these people be denied a mod?

 

... if your total housing expense can't be taken down 31% at 2%/40 years and you have equity, it will be a denial. Even if you are upside down, it could be a denial because the principal forbearance will exceed the property value when 2%/40 years won't accomplish the 31% HTI.

 

As far as credit cards and whatever revolving debt a homeowner has unrelated to their principal residence, it won't matter, it won't be a denial for that reason under this program. Requiring a homeowner to undergo CCCS is not a denial, unless of course the homeowner refuses.

 

There are many borrowers that may be in financial distress. But MHAP is designed to keep out borrowers whose financial distress is unrelated to their housing expense on their principal residence. These would include those with high cc payments, investment properties without tenants, high car payments, high cost of living, high revolving debt, high contibutions to their 401k's, private tuitition expenses, etc. etc. etc.

 

You see it all the time. It is based on gross income to housing expense..........you will often see people with financial distress, but isn't from their housing expense to gross income, it is their other expenses unrelated to housing. The mhap program doesn't consider these unrelated expenses except for CCCS purposes, which it shouldn't.

 

The $2000 housing payment above is about 53% of gross income. 53% housing DTI ratio IS a housing related hardship.

 

And my whole point in the above example was that the 2%/40 years mod WAS able to accomplish the 31% housing DTI without any principal forbearance/reduction. Yet the mod in that case was denied.

 

The rest of their $4200 total household expenses was revolving debt and, as you point out, should not have been taken into account under HAMP, except for CCCS purposes.

 

So why was their mod denied?

[cinderella]

...

They will often be the ones that want to recite every little expense in their lives from cat litter, to the cost of postage stamps, to whatever, when really, under mhap, NOBODY CARES ABOUT YOUR EXPENSES!!! They figure if they overinflate their expenses, that it will matter. No, it is grossincome to housing expenses, for the most part everything else is irrelevant.

 

Are you sure about this???

 

If the total expenses don't matter, then why are people posting that they have been denied a mod because their total expenses exceeded their total income (they had negative cash flow).

 

There was someone who posted with gross income of $3800 and total expenses of $4200. His/hers housing expense, including taxes and interest was $2000.

The 31% target could be achieved with a rate reduction to 2% and amortization extention to 40 years with no principal forbearance/reduction required.

Seemingly, this would be a perfect candidate for a mod, yet they were denied due to "insuficient income".

 

Insuficient income for what? With a 31% mod, they would comfortably afford their new payments.

 

As far as total expenses are concerned (back end ratio of 55 or higher) the HAM Program only requires the borrowers to sign a letter that they will work with a HUD approved counsellor to reduce their total debts.

 

So if "nobody cares about your expenses", then why would these people be denied a mod?

 

... if your total housing expense can't be taken down 31% at 2%/40 years and you have equity, it will be a denial. Even if you are upside down, it could be a denial because the principal forbearance will exceed the property value when 2%/40 years won't accomplish the 31% HTI.

 

As far as credit cards and whatever revolving debt a homeowner has unrelated to their principal residence, it won't matter, it won't be a denial for that reason under this program. Requiring a homeowner to undergo CCCS is not a denial, unless of course the homeowner refuses.

 

There are many borrowers that may be in financial distress. But MHAP is designed to keep out borrowers whose financial distress is unrelated to their housing expense on their principal residence. These would include those with high cc payments, investment properties without tenants, high car payments, high cost of living, high revolving debt, high contibutions to their 401k's, private tuitition expenses, etc. etc. etc.

 

You see it all the time. It is based on gross income to housing expense..........you will often see people with financial distress, but isn't from their housing expense to gross income, it is their other expenses unrelated to housing. The mhap program doesn't consider these unrelated expenses except for CCCS purposes, which it shouldn't.

 

The $2000 housing payment above is about 53% of gross income. 53% housing DTI ratio IS a housing related hardship.

 

And my whole point in the above example was that the 2%/40 years mod WAS able to accomplish the 31% housing DTI without any principal forbearance/reduction. Yet the mod in that case was denied.

 

The rest of their $4200 total household expenses was revolving debt and, as you point out, should not have been taken into account under HAMP, except for CCCS purposes.

 

So why was their mod denied?

 

I feel like I'm at work again.

 

I haven't seen the loan. I don't know any of the information. I have not seen any of the numbers or if there is a second mortgage on the house which could alter the ratio. This may not even be an investor participating in the MHAP program, which if they are not, none of this applies. There is also a very specific reason why an loan would be denied for a mod under this program that I wouldn't discuss that goes beyond gross income to housing ratio, I won't go into any detail, but there is a valid reason to deny in some instances.

 

To guess why it was denied without going over the specifics to figure out if the info given was accurate and the investor, I may as well try to pick the next lotto jackpot.

Edited June 24, 2009 by cinderella

[fireman44]

Whether or not you meant to Cinderella, you seem to be lumping everyone into this nutso category. Perhaps a few word changes here and there would make all the difference. But I digress. As to my situation, I was behind several payments for reasons too numerous to mention and was told by my lender that they would go with a mod if I qualified. (This was before Obama's program). I submitted the paperwork and found out that I did meet the criteria for a mod. However, their foreclosure dept. was also proceeding with FC at the same time. In a nutshell, I didn't get the mod papers before the FC sale. I couldn't chance losing my home, so I filed Ch. 13. Lo and behold, I get the papers the week after I file, but the mod sucked. No reduction in rate, payment went up a few $$ and the arrearages went as a balloon payment at the end of the loan, several thousand $$. My attorney and the trustee both said forget it and we would just roll the arrearages into the 13 payment plan. After I had my 341 in January, the lender sends me another mod package, this time with much better terms, the rate down from 6.45% to 2% for 5 years which dropped my payment about $100/ month and all arrearages eliminated. There was a balloon payment at the end, but if I kept my plan payments the same, I would have enough after 5 years to make the balloon. So it was a win-win situation. The only problem was that they wanted the upfront money and the signed papers back within about 3 weeks. The lender should be aware that most BK judges have to approve all mortgage mods (at least mine does) and with only 1-2 dates a month for this type of hearing, there was no way. We got a continuation of 60 days so my attorney could contact my lender to get updated figures. I saw the letter he sent to the lender explaining everything, especially the timeframe involved, but we got no response from them. I took 2 vacation days to go to court that were wasted, all because my lender was dragging their feet. So perhaps you can see borrower's frustration with the banks. Again, I'll be the first to admit, you can't work with some folks no matter what, but with the attitudes of some banks I have dealt with, it's no wonder.