Jack M. Guttentag The Mortgage Professor

Yahoo! Finance User - Thursday, October 8, 2009, 1:54PM ET  Report Abuse

• Overall: 2/5

I am currently going through mortgage modification. So when I saw this article, I thought it would show me the pitfalls to avoid. When it did not I was dissappointed! What I mean by pitfalls is after reading the information sent to me by my lender, it appears that foreclosure is still an option for them.cj

Yahoo! Finance User - Saturday, May 16, 2009, 8:34PM ET  Report Abuse

• Overall: 5/5

Any good advice for those of us who are self-employed? Harder to fill out their requirements.... thanks, Sir, this is helpful.

Yahoo! Finance User - Saturday, May 16, 2009, 10:33AM ET  Report Abuse

• Overall: 5/5

Not much has changed! I had bad credit and so I went to the GetExcellentCredit site and was able to get approved for a mortgage in today’s market just a few months later... Check them out! Renee~Lynn

Yahoo! Finance User - Wednesday, May 13, 2009, 3:41PM ET  Report Abuse

• Overall: 5/5

This article is very helpful. The focus is on obtaining a loan modification, not on how to deal with foreclosure. So the other reviews that are more critical of this article fail to make that point. The article is on loan modification and not preventing forclosure.

Yahoo! Finance User - Tuesday, May 12, 2009, 10:08PM ET  Report Abuse

• Overall: 2/5

As a foreclosure manager, I have some tips and clarifications. I don't want to knock the author, but it is apparent that even he is not aware of the details. The most important thing he said was to get EVERYTHING to your servicer. This is not to be difficult, it is the Treasury's requirement! 1. Please do not wait until you have received a "demand notice" to bring your mortgage current or they will foreclose after that 30 day expiration date. Your options become very limited and it is not because of the "bad" bank, it is a Federal and nowadays State law. Though the bigger banks like Wells Fargo are notorious for not working with borrowers after the demand notice has expired and the mortgage is now considered accelerated. You must contact your servicer before this occurs. 2. The new program is not a HMA, it is referred to in the industry as HMP. Both Freddie and Fannie participate in this as the program was really designed for them. The only banks that have to participate are those who receive TARP funds, otherwise the HMP is voluntary. 3. You can see the specifics of the HMP through http://www.ustreas.gov/press/releases/reports/modification_program_guidelines.pdf 4. You can see if you qualify through http://www.makinghomeaffordable.gov/ 5. You can see if Freddie or Fannie own your mortgage through http://www.freddiemac.com/ or http://www.fanniemae.com/index.jhtml 4. Please remember that your servicer is expected to be an overnight expert and this is an evolving process. I have seen as many as three updates in one day. This program was rolled out to the press without all the parameters in place, and as a matter of fact, one of the most important factors, the "Net Present Value" test on how much a servicer can balloon on a mortgage's principal was not even released until two weeks ago. 5. I will tell you that calling with an air of "entitlement" will not help you. This program is guised as a program to help homeowners but to our taxpayers it is a way to minimize loss in the end transaction. If it is more feasible for a bank to foreclose because you have considerable equity and you've been less than stellar in your communications and payments, play extra nice. Nobody is entitled to help you as you owe the money... 6. Banks do not want your home. You have to factor that the average REO loss is 25% under the current market value, and as we know, it is not a favorable market. Add that to a typical 1.25% monthly expense to mantain a property and the bank takes quite the hit, even after a charge down. It is hard for the people in these departments. Please understand we have unprecendented call volumes and pressure. There is not one expert on this, not one, not even the people that wrote the program, or else we would not be continously receiving updates. The best example I can think of is where the Treasury said we can consider unemployment income, but only if we can prove the borrower would receive it for THREE YEARS. I could not find one state that offered such benefits and it has since been reduced to nine months. Seriously, you think banks are difficult, try working with the government... I hope this info helps. The basic parameters are: 1. To achieve a target payment of 31% of borrower(s) GROSS income. 2. Capitalize any past due amounts, and fees/costs 3. Step down the interest rate by .125% to a floor of 2%. This rate is held in place for 5 years at which point it steps back up 1%/yr to today's Freddie MAc 30 year fixed rate. If that doesn't work: 4. Term out one month at a time to a max of 40 years. If that doesn't work: 5. Defer portion of the principal into non interest bearing ballon. Subject to Net Present Value Test 6. Trial period of three months if delinquent, four months if current (not a typo...) 7. Must now have escrow account, which is factored into 31% payment. I have seen this disqualify more people than anything else because of high taxes/ins.