There maybe a light at the end of the tunnel for Mortgage holders without jobs.
Last week Adam Weinstein reported a new FDIC proposal, that called on banks to drop mortgage rates for the under and unemployed, in the Default Servicing News.
Here is an excerpt of his report:
‘As rampant unemployment sours the mortgage industry, the Federal Deposit Insurance Corp. is “encouraging” its partner banks to do more to help borrowers troubled by job losses or underemployment.
In a press release last week, the agency called on banks that acquire the FDIC’s failed institutions to drop mortgage rates for half a year or more for borrowers whose livelihoods have been ravaged by the economic recession.”
To read the full article, click here.
Facing the Mortgage Crisis Blog Will No Longer Be Updated
November 14th, 2009 at 2:57 pm
I lost my job last year and learned about the government loan modification programs earlier this year. I applied for loan modification in July 2009 and was placed on a forebearance plan in August 2009. I continued making my regular mortgage payments and finally talked with someone in September 2009 who agreed that the forebearance plan was not appropriate for me and advised me to submit a new set of forms to be considered for a different loan modification plan. Last week I received a call from someone who said my loan modification was being denied because my loan to value was too low!! In other words, I have too much equity in my home! This does not make any sense to me and when I asked him why I wasn’t told this when I first applied for loan modification, and he admitted that someone should have caught it then. He advised me to refinance my mortgage. Of course, when I called the refinance department they told me I’m not eligible because I don’t have a job!! This has been a very frustrating experience only to learn that I have fallen between the cracks of all these programs. I now find myself between a rock and a hard place. I currently have an interest-only loan which ends in about a year. What do I do now??? Help!!
December 11th, 2009 at 1:18 pm
Answer for Eloise Sanchez
I would speak to a housing counselor to go over your situatuion and
finances in more detail. If you have considerable equity, a modification
is still possible however from a business standpoint the lender can
likely recover all of their money through foreclosure versus taking a
loss if they have to lower your payments to make it affordable. If you
need your payments lowered considerably to make it affordable then it
might make better business sense to your lender for them to foreclose.
This is determined when the lender performs a NPV (net present value)
test. For those reasons, you should try to get as close to a balanced
budget as possible, so it does not appear that a drastic reduction in
payments is required. You might want to consider selling to recover your
equity and prevent foreclosure. Check http://www.hmpadmin.com for details on
the modification program. Check
https://www.hmpadmin.com/portal/docs/hamp_servicer/npvoverview.pdf for
an overview of the NPV test.
Michael Nord