Mortgage plan information |
DENVER—
Unemployed since last year, Greg Hall made it his job for more than two months to modify his home mortgage through president Obama's "making home affordable program.""We were burning through lots of our savings. We used about 50% of our savings then realized, we need to do something," he says.
He had to qualify through his mortgage lender, Citimortgage, which initially told him he qualified. But 10-weeks later said he didn't, because he was current on his house payments.
"Facetiously, I said 'Would it be better if I didn't have any options, no money and going into default?' She said it's actually better if you're in default. I almost fell out of my chair," says Hall.
Dan Diaz of the Sozo group, real estate consultants, said that information was wrong. Hall didn't have to be delinquent to qualify.
"Right now if you call 5 different people at the same bank, they will all tell me a different story," says Diaz.
He claims the problem is the program is so new and there's so much information that those on the frontlines at banks are still learning.
"They don't have the right people doing the right jobs. This needs to be underwriters who understand the in-depth financials of each client answering the phone. Instead, they have a call-center mentality where somebody who is not adept at dealing with the situation is dealing with the situation," says Diaz.
The Sozo group was able to get Hall's lender to drop his interest rate from 5.34% to 2%.
"Why is a law firm able do that? What I wasn't able to accomplish in almost 2.5 months, they did in 48 hours," says Hall.
His payment is now a fourth less and it means he can save his home. But he worries about others who may also encounter red tape and fail to save some green.
"This is going on more and more, people not being accepted. And that, quite honestly, I think the banks are criminal in their conduct of the stewardship of taxpayer dollars," says Hall.
Mortgage lenders and banks actually get between $1,000 to $1,500 cash for each loan they modify. Then, up to $1,000 a year after, provided the borrower remains current.
In general, to qualify you have to have a significant increase in your house payment or a reduction in your income.
Here's what else:
- You have to live in the home as your primary residence.
- You have to owe less than $729, 750.
- Your mortgage payment is greater than 31% of your gross monthly income.
- And your payment has to be unaffordable because of a financial hardship that can be documented, like a job loss or large medical expenses.
- For hall, his 2% interest rate lasts for five years. then, it increases by one percent for the following three years, up to 5.25%.
http://makinghomeaffordable.gov
http://thesozogroup.net
