Chase

[jssmonk8]

Hi Dan,

Would you please send me the info on where to write Freddie Mac directly?  Can they modify me?

Thank you

[jssmonk8]

Dan,

Does the 31% that the lenders try to modify you to include taxes?

[jssmonk8]

Hi Dan,

We are 38 days late and Chase is now talking to us.  They ran us through HAMP, but they insisted on using my wife's unemployement, which, made the assitance they could provide less than $300.  Are they supposed to be using unemployment as income?

[LoanModMan]

The HAMP guidelines state that you must be able to provide proof that that income will be steady for the next 9 months!!!

Unfortunately unemployment no longer issues those letters. If you can't get the letter you can't prove the income. If you can't prove the income they can't use it.

Call Chase and insist that this income is not PERMANENT and as such can't be calculated in your income.

This link will explain the guidelines for unemployment. Make sure you are versed in it. I love it when the person at the bank doesn't know what they're talking about and they begin to stutter when you challenge them.

http://www.ows.doleta.gov/unemploy/pdf/uifact.pdf

[LoanModMan]

I meant to post this link for calculating the length of time your wife will be getting UI benefits.

http://www.ows.doleta.gov/unemploy/ben_entitle.asp

[jssmonk8]

Thanks Dan, I am going to call them back tomorrow, I stopped when they told me that.  I am going to speak with someone else and just say she is not collecting if they are not following the guidelines correctly.  She even checked with her supervisor and confimed that they are to use unemployment.

So, next issue, I guess your credit gets destroyed while undergoing the trial mod....until the mod becomes permanent...right?  I will be reported late each month since I am not making a full payment per the original note....is this correct?

Thanks again.

[LoanModMan]

This is the latest information on how HAMP-Modified Loans Should be Reported During the Trial Period

Borrowers who are current on their mortgage when they enter into the trial modification period should NOT be reported as late, according to servicer guidelines for Fannie Mae, Freddie Mac, as well as other loans (”non-GSE loans”) being modified by HAMP-participating servicers. Homeowners who were delinquent when they entered the modification trial period, however, will continue to be reported as delinquent during the trial period.

Information to Forward to your Servicer if It’s Reporting Incorrectly

If your loan is owned or guaranteed by Fannie Mae, see page 12 of Fannie Mae Servicing Guide Announcement 09-05R for information about credit reporting for HAMP-modified Fannie Mae loans. If your loan is owned or guaranteed by Freddie Mac, see page 5 of Freddie Mac Publication 800 for servicer instructions re: credit reporting of modified loans. If your loan is NOT owned or guaranteed by Fannie Mae or Freddie Mac (a "GSE loan"), see page 22 of “HAMP Servicer Supplemental Directive 09-01 for information about credit reporting guidelines for HAMP modified non-GSE loans.

All three publications state that borrowers who are current when they enter into the trial period and make payments by the 30th day of each month, REPORT AS CURRENT, but on a modified payment.


I am not sure what this will do to your credit report, but my guess is it will be similar to entering into a debt counseling program.

How are you making out in the process?

[SoCalGal]

As a mortgage broker who reviews credit reports every day, I can tell you what repayment other than repayment according to the original contract does to one's credit:  it temporarily destroys it.  As Dan said, forbearance and loan mod have the same effect as entering into a debt counseling program.

In fact, Fair Isaac & Co. (creators of credit scoring) is adjusting their algorithm to accommodate the current trend in loan mods.  When confronted with a request for credit in the future, all lenders want to know what they're dealing with.  Anything other than repayment according to the original contract is going to be reflected on your credit profile by generating a Score Factor Code #22--"seriously delinquent, derogatory public record [Notice of Default, bankruptcy, foreclosure, etc.] or collection account."  By becoming delinquent, your account goes into collection, thereby generating Score Factor Code #22.  Theoretically, however, these "reason codes" should be separate; that is, one 30 day late isn't the same as forbearance or repayment under loan mod.  It's about time Fair Isaac & Co. rectified the stupidity of Score Factor Code #22.

In my experience, with a loan mod, your credit will be temporarily compromised, but the larger goal of monthly mortgage payment relief will be achieved.  The future value of thousands of dollars of interest saved cannot be overstated.  Once your loan mod is complete, you should be able to recover from its effect on your credit report with about 18 months of on time payments.