I was not given the greatest of news today when I called the mortgage company and started discussing the options available After endless - and I do mean seemingly endless - questions about whether I'm living in the home, planning on staying in the home, on and on, income this - stuff I have already answered to these people 3 times in the last month, we got down to brass tacks.
Well, first, she put me on hold for 20 minutes. Not an exaggeration, I was on hold for a LONG time while she was reviewing my file. When she came back on, she told me HAMP would only help me by reducing the monthly payment by $100.
I had a lot of questions. Why? Based on your income and that the amount you pay for the house will be no more than 31% of that. It is, as always, based on GROSS income, not the amount you are taking home after all the deductions. This, I think, is a load of BS. Taxes, health insurance, I mean, a lot is taken out before I get my pennies out of it, but, that's the way it's structured.
I asked again why such a small amount, does it not reduce my interest rate? NO. HAMP does NOT reduce your interest rate if it is a FHA loan, which mine is. I'm at the lowest rate I can get through FHA at the "current market rate", I found out today, presuming I was being told the truth. I do not, however, presume anything when it comes to these lenders and all the crap that has come out about them over the last 2 years in how they are dealing with their customers.
Okay, dear lady, WHAT, exactly DOES HAMP do? I mean, seriously. They reduce the principle amount of your mortgage to the level that it brings your payment to 31% of your income. That which is left over - the amount over that - is put as a lien against your home, or something similar to that, according to this lady, held by the FHA. It is interest free, but has to be paid off when you sell your home or if you are going to pay it off.
I was completely unimpressed,because, the last time I did the modification, it dumped thousands of more dollars onto the loan for "fees" and junk. She then started to talk short-saling. It's kind of a bad word-term with me, because I have thought through the potential with that: lose your home, move onto a rental property, lose your dogs, ponds, lifestyle basically. Where am I going to live? A rental house? An apartment? Wherever it is, it is on someone else's terms, not mine.
Her final "option" was to pay up current the account. Whatever, lady, I have played this game for a while now, I understand that as long as I can keep making the payments, even if 2 months behind, your company isn't going to come throw me out. I didn't say that, instead I had more questions. I got to the point where I said I would have to think about it. HAMP is nothing like I expected it to be from what I have read. Why it isn't explained in much greater detail so that a person considering it will know in advance what it is about, I have no clue.
About the time we were going to disconnect, I wondered, how much IS administrative fees going to cost? Nothing. Your loan modification, yes, you are going to have fees dumped onto your loan, with this, nothing. That changed my mind instantaneously. But then I was told it would start the clock fresh: 30 years all over. Hmm, 3 years lost, not that much.
Somebody correct me if I am not seeing something here, but what have I got to lose? No money for fees - or anything - added to the loan. 30 years, okay, I lose the 3. But, I am now paying interest on a loan 25k less than what it is now. The lien is interest free and will stay that way indefinitely. The house CAN be sold, trust me yes, I asked, with that lien on there, it just has to be paid off at time of sale, ie: monies paid to purchase the house. I stay on the property, I pay more than $100 less per month because they didn't have stuff on there that I am paying out every month, which affects the reduction, but I don't know how much yet, I see no down side to this.
Here's something else, though. The lady across the street has cancer and wants out of her house. She can't sell it, no-one has the money to pay cash for it. It's an old mobile home that needs work. Yup, I have done that work before - all of it actually - including tearing down paneling type of walls and replacing it with drywall, tearing off metal roofing and putting on huge patches, all kinds of stuff. Been there, done that. The only thing I don't like is that house probably has aluminum wiring, the same s*** that burned my other house down.
Have to finish this some other time. I was talking on the phone with the widow of my deceased friend - yes I called her to find out how she's doing and though she is doing better, the conversation got to intense levels. I can't finish this entry in the same frame of mind that I started it, so it is finished.
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