Are You Eligible for a HARP Loan?

My quests to refinance my primary residence last month, led me to search for information on the HARP and/or HAMP programs, that I have heard a number of times in the newspapers. Here's a summary of what I found in the Internet.

HARP is the Home Affordable Refinance Program set up by the Federal Government to help consumers who had incurred losses on the equity of their homes due to the economic bust in the housing market the last couple of years. The Home Affordable Refinance Program, is a federal program of the United States, set up by the Federal Housing Finance Agency in March 2009 to help underwater and near-underwater homeowners refinance their mortgages. There are now over 900,000+ people who have benefited from the Home Affordable Refinance Program!

HAMP is the Home Affordable Modification Program, also known as H.A.M.P., is a federal program of the United States, set up to help eligible home owners with loan modifications on their home mortgage debt. It is being set up in the context of the ongoing sub prime mortgage crisis in the debt markets, continuing from 2008.
The target of the programs are 7 to 8 million struggling homeowners at risk of foreclosure by working with their lenders to lower monthly mortgage payments.

The programs are part of the Making Home Affordable Program which was created by the Financial Stability Act of 2009. The program was built as collaboration with lenders, investors, securities, mortgage servicers, the FHA, the VA, FHLMC, FNMA, and the Federal Housing Finance Agency, to create standard loan modification guidelines for lenders to take into consideration when evaluating a borrower for a potential loan modification.

HARP is unique—because it is the only refinance program that enables eligible borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits. There have been several changes to HARP, but the most recent one is the primary enhancement that removed the limit on the amount that homeowners could be “underwater” (owe more on their mortgage than their home is worth). With that change, many homeowners who were not eligible will now qualify for the program. The program extension will end on December 31, 2015.

You are eligible for HARP if:

1. You have had a good payment history for the past 12 months. That means having no late payments in the last 6 months and no more than one 30-day late payment from 6 to 12 months ago.

2. Your home is your primary residence, 2nd home or investment property.

3. Your home value has decreased.

4. You have limited equity or your first mortgage exceeds the current market value of the home (i.e., your loan-to-value ratio must be > 80% to be eligible).

5. Your loan is owned or guaranteed by Fannie Mae or Freddie Mac. You can do this by just typing your street address and zip code to find out if your loan is owned or guaranteed by either Fanniemay or Freddymac

6. Your loan was closed on or before May 31, 2009

As a summary, to be considered eligible for the program, borrowers must have a conventional loan guaranteed by Fannie Mae or Freddie Mac that was originated before June 1, 2009, and have less than 20 percent equity in the home. Borrowers also cannot have had any late mortgage payments within the last six months and no more than one late payment in the past 12 months.

Personal Note: I have all the criteria to qualify for a HARP loan except that the equity in my home is more than 20% and luckily the value of my home had a increased slightly since 2003. Currently my application for a traditional refinancing loan is in progress. I was informed by my loan mortgage specialist that closing ceremonies is scheduled at my residence by August 6 and not later than August 11, 2014. I am looking forward for the coming closing date and start saving money on my monthly mortgage. I plan on writing my personal experiences during the refinancing process without specific details for security purposes in my future blogs.

1988-1989: Photo Trip Down Memory Lane

David E graduation with His Masters degree from Carnegie Mellon University, Pittsburgh, PA, 1988

Macrine and My vocal recital program as the voice students of Minda Azarcon, 1988

During Mama Pacing Death and Funeral Service, Iloilo, Philippines, 1988

The Four Brothers and Three Sisters of the David Katague family all went home to Iloilo for the Funeral of Our Beloved Mother, Mrs Paz Barrido Balleza Katague, 1988

At the Funeral Mass in the Barotac Viejo Catholic Cathedral, Iloilo, 1988

At the Barotac Viejo, Iloilo cemetery and the David Katague mausoleum

Macrine At Papa Dinoy (Bernardo Jambalos, Jr) Death, Boac, Marinduque, 1989

Visit to Salvacion ( Muray) Katague Ubalde ( my first cousin) in Pototan, Iloilo, 1988

Morion Guard at Filipino-American Party, 1989

Consumer's Complaints Against Banks and Mortgage Lenders

Last month while I was thinking of refinancing my home mortgage loan, I received numerous calls from several mortgage lenders and 3 major banks personnel convincing me to do business with them. My first action was to go on-line and check for complaints on the specific mortgage lender and banks. My research showed some shocking results, showing that my current lender ( who just recently took over my mortgage) has numerous complaints. There is even a current Facebook page with the title " Name of Mortgage Company Sucks" followed with the subtitle stating it is an EVIL mortgage company. In addition the major bank where I have my checking account showed also numerous complaints from mortgage consumers primarily based on their past acquisition of now a defunct mortgage lender.

I was so apprehensive on what my current lender would do to my account when just recently my payment via electronic bill payment was credited to a wrong account and therefore I received a letter that my account was past due and charging me interest.

However my bank statement showed that my two mortgage payments have been paid and received by my new lender (after my old mortgage lender sold it to my current lender only last April).

Luckily after talking to a supervisor, my two payments were finally credited to my account after about 2 weeks of calling and sending the required information demanded by my new lender which to me was not necessary, because I gave them the account number where my payment was wrongly sent.

Do you have a complaint with your mortgage company or loan servicer? Lots of people do, and thousands of them have been turning to a Federal complaint hotline for action — or at least a quick response from the lender.. Call 855-411-2372

The Consumer Financial Protection Bureau (CFPB) opened up its bulging online complaint hotline files to public view last year, and the contents are startling: Though the CFPB’s complaint window is open to various financial disputes — credit cards, student loans, credit reporting agencies, bank loans to consumers — by far the biggest source of complaints is home mortgages. Nearly half of all disputes reported to the agency by consumers are mortgage-related — problems with payments, escrow accounts, servicing, Federal Housing Administration and conventional loans, home equity lines, second mortgages, reverse mortgages, loan modification delays, application foul-ups and the like.

If you have a complaint you can also report it on the website below:

http://www.consumerfinance.gov/complaint/

In addition if you feel that you have been the victim of a discriminatory lending transaction, you can file a complaint with the Federal Trade Commission (FTC) by calling 1-877-FTC-HELP (1-877-382-4357) or by using their Online Complaint Assistant. The FTC has enforcement authority in the case of mortgage companies for the following laws:

Equal Credit Opportunity Act (ECOA)
Truth in Lending Act
Fair Credit Reporting Act

You may also use the following resources to file a complaint:

Consumer Financial Protection Bureau (CFPB)
State/local consumer protection agencies

Foreclosure Scams

If you feel you are the victim of a foreclosure scam, you may contact the HOPE NOW Alliance at 1-888-995-HOPE (1-888-995-4673) or (TTY). Call 1-877-304-9709, for more information on how to lodge your complaint.

Predatory Lending

Getting the right mortgage can be difficult. For instance, consumers can become victims of predatory lending, which is the practice of convincing borrowers to agree to unfair and/or unprincipled loan terms. Federal and state governments enact many laws to prevent predatory lending. You may wish to view local information on predatory lending from the Department of Housing and Urban Development (HUD).

Reference:http://1.usa.gov/179ptsw

1987: Photo Trip Down Memory Lane

Dodie, my oldest son on his wedding day, May,1987

At Dodie and Ruth Garden Wedding, May,1987

Macrine and other Guests at Dodie's Garden Wedding, May, 1987

Jean Jambalos and Mitch Maeda Family ( Yuka and Yuri), 1987

Two of our Chow Chow Pets, Miko and Meiling

List of Ditas Paintings Exhibit at UC Berkeley,CA Summer,1987

Our Pinole, California friends and neighbors at our Silvercrest home (Pinole, CA), Danny & Tessie Ochoa, Brig & Nancy Tamayo and Richard & Sharon Menefe( our next door neighbor)and me, Fall of 1987

Filipino-American Party in San Francisco,CA 1987

University of the Philippines Alumni Association(UPAA) Party and my backyard at Silvercrest Street, Pinole, CA 1987

Are You Ready for a Reverse Mortgage?

Last month I was thinking of taking a reverse mortgage or an HECM( Home Equity Conversion Mortgage) loan on our residence to supplement my income. I started to get information from Reverse Mortgage companies in our area and nationwide. I was swamped with calls from HECM lenders, but I did received enough information to make a decision whether HECM is now an action for me or later. But before I tell you of my decision allow me to summarize the information I received from the lenders.

1. What is a Reverse Mortgage?

It is simply a government insured home loan that allows you to convert a portion of the equity in your home for cash. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence or fail to meet the requirement of the mortgage. You must be 62 or older, have equity in the home and you must live in the home. You retained the title of your home. In general the proceeds of an HECM is tax free. No credit report is needed. You are required to receive 3rd party counseling. Last but not least, the fees are expensive, interest in your loan compounded and you do not get 100% of the equity of your home.

2. How much Can you Borrow?

The amount you can borrow depends on your age, the current interest rate, the appraised value of your home, sales price or FHA's mortgage limits, whichever is less. In general, the higher the value of your home, the older you are, the lower the interest rates, the more cash you may qualify for.

3. When does your loan due and Payable?

The loan must be repaid in full when you pass away or sell the house. The loan also becomes due and payable if,

a) you do not pay your property taxes and hazard insurance
b) you permanently move to another residence
c) you fail to live in the house for 12 months in a row and last
d) you allow the property to deteriorate and do not make necessary repairs

4. Can I have still an estate that I can leave to my heirs?

Upon selling your home, you or your estate will repay the cash you received from The HECM plus interest and other fees to the lender. The remaining equity belongs to you or your heirs. There is a high expense and compounded interest in your loan is incurred. It is very likely that when your loan is due, nothing is left to your heirs.

5. How do I received my monthly payments?

Tenure: equal monthly payments as long as one borrower lives and continues to occupy the property as their principal residence

Term: equal monthly payments for a fixed period of months selected

Line of Credit: unscheduled payments or installments in amounts of your choosing until the line of credit ie exhausted

Modified Tenure: A combination of Line of Credit and Monthly payments as long as you live in the house

Modified Term: A combination of Line of Credit plus monthly payment for a fixed period of months selected by the borrower
and

Lump sum

The above information is the basic information you have to know first before you sign up for your loan. If you need more details, talked to a reverse mortgage specialist, read the Internet and see the following video.



Personal Note: Based on the information above, I decided not to pursue taking a reverse mortgage because of the high fees and at this time of my life, I still have enough funds from my savings and pensions accounts. In addition, I do not need to deplete the equity of my home at a high expense. Maybe in another four years I might think again of this option when my pensions funds are depleted if I am still alive and kicking.