Wednesday, January 12, 2011

HAMP vs Modification

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.

ben

5 comments:

  1. Thursday

    Picking up where I left off yesterday, more like slightly altering the path, I just got done through reading that this year will be the WORST yet since the housing meltdown. I have heard this for about a year now, I finally have seen it in print.

    Ahh, yes, and there are a number of junk mobiles in my neighborhood, a thing that I had considered - moving into one of those - but have now since decided that being a landlord and renting out rooms in my current house versus moving out and into a pathetically nasty old mobile home - not very palatable.

    Actually, there is one for sale that has BEEN for sale for well over a year now. I don't know what they want for it or if it might be owner carry, but it is actually in decent shape from the outside with a chain link fenced yard.

    Well, I'm not going there - yet.

    I was watching the "Memorial" yesterday, perhaps I shouldn't start dousing it with water, but I have never seen a memorial that sounded more like a political rallying party. I mean, I just went to a memorial, it was somber event, I just didn't quite get that last night, as if the people in attendance had been instructed to hoot and holler and shout like a person that just won the lottery.

    Well, anyway, I am going to go for the HAMP thing even though it isn't going to help very much. It isn't going to hurt anything, either. I do understand now why so many people say they didn't qualify for it: you have a short window of time to fill out their form and get it back to them. If you don't get it back in time, your application is cancelled and you do NOT get a second chance. This, anyway, coming from the individual I was talking with yesterday. The reports I have seen, and much of it directed at Bank of America who is not, thankfully, my lender, is that people would send in the required paperwork and later find out that BofA didn't receive it, somehow. You might expect that along the way, SOME paperwork gets lost in the system, but hundreds or even thousands of people?

    BTW, the stats given today is that 5 million homes are at least 2 months behind in mortgage payments. It's just the fact that this economic environment we are in is far from over. Arizona, and most notably the Phoenix area, already has a glut of empty, vacant homes. Add thousands more to that?

    G'day.

    ben

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  2. Stressful Ben...I know it is stressful...

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  3. Hi Ben ~ I'm just getting back into blog reading again~ always like to read your's.


    I went through this sort of similar thing, just Monday this week....I was on the phone from 9:00a.m. to 3:30p.m. calling and argueing

    ( politely)....and then some of the rude ones, I was not so polite! It was all financial. Wednesday I finally got most all set straight to my liking....good luck..

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  4. Hey Bobby - and indeed.

    Hiya Sunny!! How nice to see you! How's everything going? I was also polite, you don't ever get anywhere being rude, but definitely still have to be firm to get answers.
    Thanks for stopping by.

    ben

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  5. Friday

    Just have a few minutes here as I got sidetracked this morning by news and also doing this HAMP junk. The non-paying tenant -- well I was going to leave her a notice yesterday but I refrained, figured I'd give her until the weekend.

    She shows up yesterday, hands me 2/3rd's of this month's rent, asks if that's okay and that was that. The other one, who is slightly employed - she has a part-time job cleaning houses - handed me more money. Amazing what my wallet looks like when handed all of this cash.

    Yes, I know, shouldn't be carrying around that much money and I intend on depositing it today along with my paycheck. The even better part of this is that the month isn't half over and I have almost all of the bills paid.

    I REALLY want to get Windows 7 for my new computer, if there is enough left over after buying the Cap and Gown for my son for his graduation later on this year (you have to order early, I am told) and other household needs, I am getting it.

    I believe it's Sunday that I am driving back down to the town of Maricopa to visit my deceased friend's wife. I promised to burn 4 copies of the memorial for her so that she could have one, send another to junior and dunno what the other 2 are for. She keeps telling me how she's going to pay me for doing it, I keep telling her that's impossible, her money will not be accepted at my establishment.

    I don't really feel like driving all the way down there on Sunday, I can tell you that right now before Sunday even gets here. It will not be a long visit, I just want to get her the copies, visit for an hour or so and then leave. She really wants and probably needs people around her right now, fortunately she has lots of family that's doing just that, but I don't want to lose contact with her.

    Well, that's it. I have a delivery that apparently HAS to be there before 7am, apparently my manager pulled that order yesterday after I left work and it's ready to go. Hence, I must depart.

    G'day.

    ben

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Friday - noonish time. The decision to take the alternate route was a sound one, speaking after the fact. I got to the juncture where I wo...