The FHA Secure Loan is going to cut it Mr. President.
Daily, I have ben blogging, yelling, scratching and screaming to get the word out to homeowners, lenders, media and congress. But who am I? Just some dude is California with a laptop and a dream? Some guy with a blog and a forum? I guess you can say that or you can say that I am one of the ONLY outspoken people in America along with Senator Christopher Dodd, my new hero and the many non-profits who has the gull to fight back against lenders and advocate for homeowners.
The President, Congress, the SEC, the Fed, they are all asking lenders to work with borrowers and modify loans. Do you really think they are listening? Do you think these politicians have ever listened to how homeowners are treated as they reach out to their lender for help? Have any of these politicians listened in on a call to a loss mitigation department? If any of them would just see what goes on behind the scenes then they would realize that we are totally up shit creek without a paddle, if we leave it in the lenders hands.
These loan modifications need to be governed and there needs to be guidelines, policies and procedures. Now there is nothing. No uniformity, no methods, no qualifying procedures, nothing. These lenders need to be forced to have systems, guidelines and policies in place so borrowers, non-profits and attorneys can work with them in a professional and timely manner. Now, it’s as if these lenders are hogging the ball and forcing our whole country to play their game. I don’t know about you but I am sick of playing their way. We have already let them place our whole country in jeopardy of financial ruin. Now, we’re asking them nicely to fix things. Screw that! Force them to change and force them now, before it’s too late.
I don’t know if you noticed, but most of the country is against us. They would just see it fit for people to lose their homes so housing prices drop and so they can buy your home at the auction. Investors are watching and waiting like vultures to snatch up your dreams and prey on your misery. Wall street is still in that investor cloud where many still have no idea that all these loans that they packaged and sold worldwide are complete junk. Worthless. Lenders are making life miserable for troubled borrowers because they don’t want to offer loan modifications and make it public that they are helping people. Hell, everyone and their mother that received a subprime loan over the past few years will be calling their loss mitigation departments asking to modify my loan. Then they would have to report how screwed they really are to Wall Street. Creating more panic and chaos with investors. So, they continue to screw with borrowers and lead them down a path of misery and hopelessness.
The facts are that there are just too many chiefs and not enough Indians. There is clearly no one in charge. Not the President, not Ben Bernake and the Fed, not the Securities and Exchange Commission, not Congress, not the lenders, not Wall Street, not housing reform advocates, no one. Just a bunch of hearings, summits and press releases. Stop talking and act. It’s just a big mess, everyones pointing fingers and blaming everyone else. It’s quite sickening to me to watch a great country like ours go down the tubes when there is a solution to our mortgage mess and our housing crisis.
The President and congress need to come in and take charge and force lenders to undergo a massive loan modification campaign. That is the ONLY way that we are going to crawl out from under this trillion pound guerrilla that is suffocating our whole nation and quite possibly the world.
The FHA Secure isn’t going to do it. Lenders aren’t going to do it. The time is now for government to take charge before it’s too late.
Moe
Founder
LoanSafe.org
LoanWorkout.org
951-271-6283 Phone
800-734-8819 Fax
Moe at LoanSafe.org Email
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Well, personal responsibility should not be dismissed all together. I think it proper to add the fact that buyers were influced by the apperance of affluence. Realtor stopped asking “how much buyers qualified for” rather they wanted to know if we could get them a loan for a certain amount. Buyers did not hesitate in committing to high payments. They were warned and told of the possibilities regarding the payments. It is just the American way to blame some one else. Still, I agree with you in terms of your conclusion. This is not brain surgery. the foreclosure rate is rising primarily because the market from which those loans came, no long exist. If it did they would simply refinance to avoid the adjustment. Now they have two choices. That is pay the higher payement or foreclose. Those individuals mortage history proves that they can and will pay at the rate of interest where they entered the market. If the lenders will simply not raise the rate or inforse the terms of the note, those home owners will continue to pay and avoid the forcloser. However that would require thought. It seems that thinking is not allowed.
Yes, I agree that many homeowners should take the blame and I state that throughout my blog. Blame can really be placed on a lot of peoples shoulders and we all can point fingers as our economy goes down the drain because of these foreclosure. I’m sure you realize that. People need to understand that every foreclsoure affect EVERYONE in one way or another. The neighbors of these people who are being foreclosed on better wake up and understand that they are being affected big time. These are the same people that would refinance and pump money into the economy. Soon they will not be able to refinance either.
The FHA Secure is like a fart in the wind of a category 5 Hurricane.
Yes, I agree that many homeowners should take the blame and I state that throughout my blog. Blame can really be placed on a lot of people’s shoulders and we all can point fingers as our economy goes down the drain because of these foreclosures. I’m sure you realize that.
People need to understand that every foreclosure affects EVERYONE in one way or another. The neighbors of these people who are being foreclosed on better wake up and understand that they are being affected big time. These are the same people that would refinance and pump money into the economy and create jobs. I think a lot of people fail to realize that the refinancing boom funneled hundreds of billions of dollars into our economy. Soon they will not be able to refinance either. The well has dried up and it’s going to cause a lot of problems to a lot of politicians.
The FHA Secure is like a fart in the wind of a category 5 Hurricane. Massive loan modifications for people who “qualify” are the only way to fix some of these toxic ARM’s for homeowners.
A-MEN. I totally agree. These so-called educated, power/hungry people running the financial side of our country are putting us, the middle class-working our ass off-people, into poverty. We are working to try and pay for a loan that we used to be able to afford and now can’t. We are the working class and I am sure we outnumber the financially secure people who don’t have the same problem as we all do. That is why we can’t get anything done. Because they look down on us, they are too good to help scum like us. I called wonderful countrywide home loans today to ask them to modify my ridiculous loan. I tried to talk to someone in loss mititgation but got hung up on twice. I tried to get to the right person, but got transferred to someone who has no jurisdiction to do anything. It ended up in her calmly telling me, “I was outta luck” and “we honestly want to help but our hands are tied by law”. What law? there is no law, they do whatever they want! It must be the law of trying to squeeze every last dime out of you. So basically I can’t refinance the stupid loan with anyone else because of my shot credit, because of this loan. And it is scheduled to go up every six months. In the meantime every credit card I have is maxed out and I am using it to pay the house payment. But now I have nothing left. If my loan was at a set amount every month where it started out 2 years ago, I’d be fine. But it has gone up over a thousand dollars since then. I could go on and on about my situation. The point is, I just am sick of getting the life sucked out of me by this house payment. The only option I have is to walk away. I told them that too, but they don’t care. All of these people in positions to do something won’t. It seems like they don’t even think twice about the people building this country, the ones literally breaking their backs and sweating like pigs to build all the very comfortable offices they work in and homes they live in. They seem to only be concerned with their wealth and well being. But they don’t realize that our country is ready to go down in flames and the lifestyles they enjoy will come to an end if nothing is done about this huge problem. We are teatering on the brink of really bad stuff happening to our economy. I am not any finiancial expert, but I see the changes in my own town and know things aren’t looking good. How hard would it be to work with the people who have been struggling to pay these outrageous monthly payments,on time, every month.Why can’t they take a bit of a cut, which I am sure won’t be too bad on them, and agree with those of us who have been current on our loans each month and work things out to help us stay in our homes and save the economy by doing a modification and we can all get back to trying to live our lives before the greediness got the best of us? This is a tradgedy and needs to be addressed by people who care and who can make these laws make the lenders do something!This is AMERICA!
It’s very important that the FHA Modernization gets passed. For FHA reform please visit http://www.hud.gov/offices/hsg/sfh/hsgsingle.cfm
Maximum Loan to Value Ratios for the FHA Secure
You speak out of my heart. I am still current on my ARM but think that this is the last month. I have tried to go to my boss to ask for a raise which I did not get even I am his ass in the hole (”I would fire everybody just to keep you-blah”)but he gave me “good” advise: “Listen you do exactly as I say: You ask for a loan modification and say if you don’t get it you will walk out. If they really don’t lower and stabilize your rate then walk out and before thats reported to your credit you’ll buy another real estate and say its investment property. As soon as you have this other place with lower interest rate they can’t take it from you and you move in. And the foreclosure of your house with the ARM probably will not even be reported and if it will you tell’em that you give them 3000 Dollars if they remove the bad data from your credit report. They will do that because 3k is better than nothing. And buy the way just buy something close to my office “(my work is 70 miles from my house)” so you can work more” -underpaid- “overtime.”
I called also mortgage brokers which want 3-4 points and can give me an interest rate between 7-11%-but you see the 11 percent is a fixed rate!-A fixed rate I can’t pay and is nearly as high as the max on my ARM!
The other scenario is to pay my 5 year old medical collections from when I broke my neck without health insurance because my boss back then was to cheap to offer some. (I broke my neck on the way to work-by the way-fell asleep in the car because I was overworked)-But I would have to pay that in cash because the value of my house dropped so I can’t get cash-out which is 90% LTV. Another company says NO because my husband owes child support -which we are paying timely since 3 years.
Another company says my 590 credit score is too low even though my husband has a 660 credit score. My score is low because I have used money from credit cards to pay the mortgage on time. Denied because to high of a debt ratio. But the loan modification does not seem to take credit card debt into account-so I did not here the decision yet I am waiting they said they would call in a few days but nobody did call-but I can see they might say we make enough money or to little. But we can complain and complain but what can we do to change that? Where can I go which group to join-there must be a way-that is America!
Very good piece Moe,if you were excepting votes, you would have mine.
I also have a(broken)ARM,and I was wondering when and if the rates are lowered on 9-18,what range would I be looking at if by some chance I were to have my loan modified?
The only way I see keeping my loan/home is if the lender shows mercy and offers me a really a good rate,but I just don’t see these lenders bending over backwards to give us adequate assistance. Moe,what are your thoughts in regards to a best possible rate scenario or range, both
now and perhaps after the 18th?
I could tell you this much,some of these lenders are already talking about loan programs that might be available on the 18th. But unless my monthly mortgage /rate is affordable,it does me no good in the long run. Your,thoughts?
I’m glad you can relate to my post
Who is your boss? Seems like he somewhat know what to do in these situations. Even though it was a little extreme.
However the claims of the foreclosure not being reported are terrible advice. I have never seen a foreclosure not reported. Also, walking money to do a deed in lieu with your lender, is something I haven’t seen either. I have heard about it and I know it has happened in the past but not now. Imagine if everyone said, “We’re walking away and we’ll make it easy on you, if you just give us some cash to do so.” 2 million people would be at their enders door step waiting for checks. I just don’t see this approach happening at all.
Have you looked into the FHA Secure loan? Or just an FHA refinance? What state are you in?
Join my forum at http://www.LoanSafe.org and let your voice be heard! Good luck with your loan modification!
Moe
Thanks for the compliment!
A broken (ARM) . I like that analogy
A rate decrease will do nothing for most of the homeowners that are in these adjustable rate mortgages. Underwriting guidelinEs now are just too tough. A rate cut by the fed isn’t going to fix these broken ARM’s. We need mandated loan modifications to happen.
The loan programs of the past are gone and I don’t see any new, innovative refinance programs coming out anytime soon. So let’s hope congress makes lenders fix these toxic ARM’s fast!
Best of Luck!
Moe
You need to accept what you can afford AND what you cannot afford.
Borrowing on credit cards to pay a payment on a house that you may owe more on than it is worth is just foolish.
Foreclosure usually equals about 6 months of free rent. Until then, pay off the credit cards with that money and then find someplace to live that you can afford.
Living in a house isn’t a right, sorry.
If you don’t have any equity in a house, you don’t have anything anyway, except a very expensive rent payment.
I am sorry that you are in a tight situation, but it’s not right to blame anbody else for your debts.
Oh ya.. don’t pay off 5 year old medical collections, it will lower your credit score if you do.
OK, so what you are saying is that these loans that people got for the homes they purchased over the last 5 years are homes they can’t afford? Didn’t they have to “qualify” for these loans to buy the homes using underwriting guidelines that the lenders control to make sure that they can “afford” these mortgages that they would have to ultimately be responsible for?
Or were those fake loans that they had to qualify for using lending guidelines that are in place to make sure that money isn’t given to people who can’t “afford” to pay it back?
Most of the homeowners I speak with have paid their mortgage on time up until their loan adjusted. Yes, they new the risk of taking and adjustable mortgage, but they were told 99% of the time by licensed professionals, “Don’t worry in 2 years we’ll just refinance you out of that terrible loan into a new fixed mortgage. Please, sign here sir.” I bet if these same licensed professionals said, “You’ll never be able to get out of this toxic loan. The payment will go up 50% in two years and the bank will foreclose on you, ruining your credit for another 7 and kicking you, your wife, 3 kids, dog and goldfish on the street.”
How many people do you think would have taken the loan then? My guess is, is very few.
This is beyond that now. It’s affecting our entire economy and it’s just begun. If you want a full on recession, then I suggest Congress follow your path.
Oh, and it’s beyond debt and collections. More people are being ruined credit wise by this then anytime in history.
More FHA Secure guidelines to help you determine if you qualify.
1. The mortgage being refinanced must be a non-FHA ARM that has reset.
2. The mortgagor’s payment history on the non-FHA ARM must show that, prior to the reset of the mortgage, the mortgagor was current in making the monthly mortgage payments.
3. If there is sufficient equity in the home, under additional eligibility instructions provided below, they will insure mortgages that include missed mortgage payments.
4. Under certain conditions explained below, they will insure first mortgages where (1) the existing note holder writes off the amount of indebtedness that cannot be refinanced into the FHA insured mortgage; or (2), the FHA-approved lender making the new mortgage or the existing note holder may take back a second lien that includes closing costs, arrearages or previous secondary financing.
5. Lenders must determine, as part of the underwriting process, that the reset of the non- ARM monthly payments caused the mortgagor’s inability to make the monthly payments and that the mortgagor has sufficient income and resources to make the monthly payments under the new FHA-insured refinancing mortgage.
What May be Included in the FHA Secure Mortgage Amount: They will permit the inclusion of the existing first lien, any purchase money second mortgage, closing costs, prepaid expenses, discount points, prepayment penalties, and late charges. They will also permit arrearages (principal, interest, taxes and insurance) to be added into the new loan amount.
Subordinate Financing under the FHA Secure Initiative: If the new maximum loan is not enough to pay off the existing first lien, closing costs and arrearages, the lender may execute a second lien at closing to pay the difference. The combined amount of the first mortgage and any subordinate lien may exceed the applicable loan-to-value ratio and geographical maximum mortgage amount. If payments on the second are required, they must be included in qualifying the borrower. If payments are deferred, they must be so for no less than 36 months to not be considered in the qualifying ratios.
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Hi I surf around the net quite a bit, and there\’s a load of rubbish out there. It\’s good to find some decent content. Great blog. I hope you don\’t mind my link here too. Your post entitled ure | Loan Modification & Loan Workout News was just what I wanted.
With all due respect, Moe, you didn’t read the Bush’s FHASecure guidelines that apply to the people that you defend below:
“But there are tens of thousands of people who are in adjustable rate mortgages that were doing fine until their rates adjusted.”
No. 1 of the FHASecure guidelines reads: “A history of on-time payments before the borrower’s teaser rates expired and loans reset.”
It appears to me that you hate President Bush on principle, and that there would never be enough that he could do to satisfy you. For you, every step is a no-win proposition. There’s no pleasing an “empty glass” kind of guy.
Gretchen,
I tell it like it is. If you interpret that has me seeing the glass as empty, then fine. You know why? Because it is.
I wrote this post 2 months ago and the FHA Secure is not being offered by lenders. You know why Gretchen? Becuase no one will buy these mortgages on the secondary market.
When there is a win/win situation, I will report on it. For now it is no-win for homeowners.
Until you know what’s really really going on, save your ill informed comments for yourself.
Marvelous review on oan Workout News. I love this view.
I acutally just found this article and couldn’t help but respond…. and I have to say that I agree with you Moe 100%. The product is now out there and the guidelines have been made so strict that NO ONE not even FHA is interested in buying/insuring these loans. FHA has made the process for these loans so involved and tight for the lenders that if just 1 “I” is not dotted or one “T” is not crossed the lenders are looking at a re-purchase. Which, from my stand point is not helping the situation at all. I think this is just another way for the government to “appear” to the “general public” as the good guys However, in reality they are only offering false hope and playing on the ignorance that got these people into their current situation in the first place.
I qualify for a FHA secure, but I’ve had 2 lates in the last 12 months, my current lender refuses to cash my certified funds I made in december 07 because it sets them up fairly well for my adjustment in feb(hello 90 days till you can stop payment), and I’ve spoken to 2 FHA approved lenders so far that have yet to close a FHA secure loan. This is either due to servicers not willing to part with the primary loan and still carry secondary loans, low appraisals from the FHA approved people, or plain out not qualifying.
There’s no FREAKING WAY I’m going to pay 6 months of inflated interest to get shut down in the end… with my savings exhausted and face moving out with my tail between my legs because I tried to keep my place that we could afford when we purchased it, in a market where refi was right around the corner.
Makes you wonder who’s actually getting any help from this system :-/
I think teenagers shouldn’t be allowed here. They don’t have a clue about life, why are they trying to look smart?
I am sympathetic toward all the homeowners currently facing high interest rate adjustments, or worse, those already in foreclosure. Being in the “business”, I find it amazing that the FHA Secure program allows for homeowners who are currently victims of increasing rates and payments but investors across the board aren’t helping by requiring homeowners to have a 580 fico, even being delinquent on the mortgage. It’s a catch 22…. you can’t get into an FHA Secure loan with an extremely low fico, but an extremely low fico is what happens when you are consistently delinquent on your mortgage. Until HUD refuses to insure loans made by banks with fico score requirements, these poor homeowners who are facing foreclosure won’t see much relief. A freeze on rate hikes seems like the best option at this point in time.
Good post!
The question is how do we force the lenders to adjust the mortgage even though we clearly qualify!
I called them, I used facts, even threatening language stating that I have nothing to lose but a bankruptcy which will end up costing them more money.
My monthly payment is $1955, I bought my house @ $250k and now it’s worth $100k which turned out to be a bad investment!
I read something that later on, when the processes are established, homeowners that qualify but did NOT get any cooperation from the lenders and can prove it, will be able to take the latters to a bankruptcy judge!
Oh and by the way about Gretchen’s comment:
Moe – you’re the moderator of this group you could be a little kinder
Gretchen – this is bigger than your admiration for Bush, it’s a big portion of the “real world” that you’re probably not quite familiar with, that are losing homes either because their ARMs expired, divorce, job loss whatever the case, it’s happening in masses, and we’re past the stage of pointing the finger, we need to come up with a fix ASAP