SHAUN DONOVAN, HUD SECRETARY: We’re going to target those borrowers that are most at risk of foreclosure through our modification plan, helping to bring payments down to 31 percent of their income for three to four million borrowers. We’re going to target that in a way that first of all, no speculators, no investor-owners are eligible for the plan. And second of all we’re going to be very thorough in checking peoples’ income, verifying that it’s true and then doing our modifications based on a real picture of what those families can afford.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: If someone did a cash-out refinance at the top of the market and now are in trouble, will they be eligible for a loan modification?
DONOVAN: Look, we want to make sure that if we’re going to do this, that we set families up for success. And so if a family is so deep under water in terms of paying 50 percent or 60 percent of their income towards housing, their house is worth half of what their mortgage is, in a lot of those cases that were the most egregious, it’s going to be unlikely that the family is going to be able to even with a modified loan to make the payments work. We’re going to look at it. We’re going to evaluate it, but we have to be confident that that family can get to a level that’s affordable for them through the modification.
Is it possible that people could take advantage of this? Or that irresponsible people are going to get the help and continue to be irresponsible after? I guess that I’m asking if there is a way to tell the difference between the people who genuinely need help and those who would take advantage of, or squander, the assistance?
I cannot see how the loan mod my 87 yr. old mom received is of any help at all. The loan payment is currently 614.00 per month,time remaining apx 10 years. The loan mod thru S&N (countrywide) would show payment 535.00 per month for 242 months. She would end up paying over twice the amount for her loan if she took the loan modification. I thought that congress passed the act to make these sub prime mortgage companies reduce interest rates, but instead it looks like they are even more gluttons.
My mortagage comapny which is HomeEQ Servicing is still saying they do not know how to apply the law to it’s customers. I think they are delaying because they donot want to assist homeowners. What should I do?
You may want to try getting the assistance of a non-profit or copy the bill and send it to them along with your loan mod pkg via fed ex. Keep up the good fight!
I have seen many modifations over this last year. However it seems to be that the mortgage companies are more reluctant to do what it takes to get one done. My bank did one right away for us. It did not matter if our income was more then our debt. If our income was more then our debt no one would be having this problem. What I don’t understand is, why, if our economy is down, people have been laid off, why should they have to get bad credit to do a loan modification? Doing a refi right now is crazy. There is an average of $4000 in interst or just dues alone. Why refi and have the lower interest rate if you are still paying for it in the end. Plus let’s not forget that most of our property value has gone down. In my area alone, there have been alot of forclosures. Are the mortgage companies just not talking to the bank cause they want their money? As far as I am concerned, the mortgage companies need to figure things out also. My dad has used all of his savings since the beginning of Dec. to pay for his house. Now that money is gone. He should not have to loose his house or get bad credit cause he needs help for a little bit.