When he announced a new plan to try to stanch the foreclosure crisis, Treasury Secretary Henry Paulson Jr. said that the officials, lenders and investors involved had been working toward it since August. That start date is a useful benchmark for measuring the plan’s inadequacy.
Only an estimated 250,000 borrowers, at best, are likely to benefit from the plan’s main relief measure — a five-year freeze on certain adjustable loans’ introductory rates. Yet, from mid-2007 to now, some 800,000 homeowners have entered foreclosure. From 2008 through mid-2010, when the last of the potentially eligible loans would otherwise reset to sharply higher payments, there will be an estimated 3.5 million loan defaults.
The plan is too little, too late and too voluntary. Mr. Paulson and his boss, President Bush, have left it to the private sector — the mortgage industry — to protect the public interest, without any negative consequences if it does not. That is not the way the private sector works. And it is not how government is supposed to work at a time when Americans are facing mass foreclosures that threaten entire communities, financial markets and the wider economy.
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Thats kinda an oxy-moron. Bush tells you to call them regarding the rate freeze. But to qualify for the rate freeze you cant be late. HMMMMMMMMM. I also posted on your forum since I called hope this monrning and they told me to contact my lender. Whatever!!!
I am a mortgage professional in the industry for over 21 years. This year I experienced a dramatic decrease in my earnings and contacted my mortgage company, Wachovia, for some short term assistance. I was told that I don’t qualify for any assistance since I am not earning enough money. Does this make sense to anyone? If I was not experiencing financial difficulty I would not need assistance!!!
Yes I called American Home Mortgage 3-4 times since August when I fully comprehended that in a falling market my neg-am loan was a timebomb waiting to explodee! They said “we can’t do anything since you’re not late”. Called 995-HOPE 2-4x in the past month and emailed. They told me best thing to do sell, which I’m doing but haven’t received 1 offer. I’m looking at a possible short sale and have been researching my tail off. I will contact lender in Jan. I make good money but have ruined my future; when I think about it fully I just cry….the only time I’m not worrying about it is the first 4-5 hrs. of sleep…I put 15% down went full doc…had a bad personal situation and knew I needed to fix up my house and sell (so a HELOC) and I’m screwed…..I hope all the mortgage companies and Wall St. banks get f’d by this. I’m reading about banks taking billion dollar writedowns on a daily basis. But the government is helping them out. I hope they go bankrupt just like I’m going to have to do.
Hi Moe,
I have been helping a friend out who loan is adjusting in January. Look at his situation there is no way for him to refinance, he can afford his current mortgage which is in the $3000 range, and jumping to high $4K range.
I called his ASC loan servicing asking what he can do. Never been late, can make his current payment no problem can’t afford his new adjusted rate.
They told me me they can’t help until he is late!
Talk about strange and retarded!! Kinda like a man in burning building asking for help and then being told by fire department they can’t help until the flames have touch them!!
This was about a 3 weeks ago, he is going to call them today, since i sent them letter explaining his situation, they finally have decided to call him. Will kepp you posted.
Carlos Samaniego, CMPS
Certified Mortgage Planning Specialist
Yes, sswiz, talk about WTF?
Andy, duh? It’s like why would you go to them for help? I know several mortgage and real estate professionals that are losing thier homes because business is so lean. I wish you the best.
You tell em Jackie!
Thanks Carlos. I would definitley like to hear from you on this.
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I have posted on other topics about my families situation. My husband and I re-financed our home 3 yrs ago to pay off some debt that was becoming difficult to keep up with because of a decrease in my husbands income. We refinanced with Wells Fargo. At the time it seemed like a blessing because it took a lot of credit card payments off of us and we were able to afford the house payment. When we re-financed with the ARM option we felt very optimistic we could re-finance the loan before 3 years were up. We started trying 1 1/2 years ago to re-fi and found that our home would not appraise for what we owed. I believe Wells got an inflated appraisal. It should not have dropped that much in such a short time especially since our area has not yet been hit hard with alot of foreclosures. I fell ill about a year after we re-financed, so things got harder , including our mortgage note. We called Wells to see what we could do to get a fixed rate and get our payments down, to no avail. Mind you we had not missed a payment or had been late up to that point. That was in February 2007. We told them then we were struggling with payment could they help us. All we could get out of them was if we were late or missed payment we could be directed to Loss Mitigation and they could maybe modify loan. Well needless to say we missed 2 payments, one reason we had a son who started college and needless to say that is very important. So we get in Loss Mit, in July 2007, we are still there and our Loan reset in November 2007. We can not afford new payment and we are going to let our house go. We have lived there for 10 years and raised our children there. Wells dont care. They could have lowered our rate and made it a fixed one so we could stay but they would’nt. They knew we were struggling with our prevoius payment and they surely knew we could not afford the new one. Not to mention the rate re-sets every 6 months! I called 1-800-HOPE 2 months ago they are advising a short sell. Some help! We had excellent credit 3 yrs ago now our FICO scores are so low it will take years to get them back up. Oh well sorry so long, but that’s my story.
Certain lenders do have hotlines for adjusting ARMs, ASC calls it their ART team. Chase has one too.
With Option ARMs, I don’t see any other way to go but to sell if you’ve been making “Neg-Am” minimum payments. There’s no way logically that you can modify a loan where the only affordable payment is the only that adds $1000 to your loan value every month. Everyone says that lenders/investors want to avoid foreclosure etc etc etc.
Why stay in a loan where your loan value goes up and stretching your finances at the same time? Just get out of it through selling/shortsale/deed-in-lieu, get housing for less and save towards retirement/newhouse/etc. Pay off your old debts with some assistance from a nonprofit credit counseling agency and get advice on staying debt free the rest of your life at the same time. You can’t keep a house in the long term without paying “Principle + Interest”, otherwise you’re just adding to your debt or just Renting the place.
A minimum payment is sometimes 2-4% on the interest and with the rate of the mortgage at 7-8% to start. To make it affordable for you on a fixed rate, the lender would basically have to wipe out the interest they earn on it and only have you pay off the principle. If you count inflation and the money they could have made in the years of the loan by making it available to invest, they’re basically losing money just keeping the loan on the books, it would make sense for them to do the foreclosure now than losing the same or more in the long term.
-Someone that spends half his time with people with Option ARMs and actually takes the time to look at their long term situation rather than just the immediate mortgage
I can relate to all of you. I have my home loan with Chase. They called me in September notifying me that my loan was goingto become an adjstable rate loan, will I have a problem making the new payments. I told them, well my husband is an undewriter and he just got laid off and i have new baby on the way, of course we will have difficulties. The ysaid they will modify my loan. They asked for our financials in October, than asked for the same information in December, but yet have not made any decisions. I have been paying my monthly payments at the adjustable rate since Ocotber while awaiting their decison. I too called HOPe, they suck, becuase I am not late, they can not help me. My lender had the nerve to say that becuase i am current on my loan, they are trying to bring the loans that are in default current first? WTF huh? I thought paying on time would payoff and they would modify my loan beofre I go into default, what ever hsappen to the idea of prevention? I have called at least 25 times to see if they have made a decision, but I get the same response, ” We are still working on it” Supposely it is with teh underwriter. shit, I am an underwriter and it foes not take no 120 days to underwriter a single family, especislly a mod? I plan on not making January’s payment to see what they will do? Does anyone have any suggestions?
I like your stuff, even though i came here by accident!
Calling HOPE Now is a waste of time for most folks, or at least folks in my shoes. I’m not late, I’m upside down and neg-aming. They told me to refinance and referred my to a local non-profit who can’t help me because my income is too great. Who’s going to refinance an upside down loan? Colossal waste of time that experience was.
Anything from Bush is Bullshit!!!
The politicians don’t know anything about the real estate markets, real estate economics, tax ramifications and the mortgage ordeal that we are in.
The lenders are the ones who are faring better than all of us, homeowners who are working to make sure we don’t miss a payment. Lenders hire incompetent assholes who know nothing about customer serivce or helping people with homes because they don’t own homes. They follow a script and then transfer us if our questions become too complicated.
I was told in October 2007 by my lender that I had to be late on my payments to even call them to talk about modifying my loan. I couldn’t believe it! Who makes up these rules? Some dumbass?