Basically, if you call your mortgage company to ask for some help with your mortgage, before any other type of help will be considered, they steer you towards Making Homes Affordable. MHA is based on calculations that your mortgage + homeowner's insurance + property taxes be more than one-third of your new lower income. If this is the case, they will get about an hours worth of other data from you and 30 days later, send you some paperwork.
What they don't want you to know is that if you do take advantage of this program, your credit rating will be destroyed causing any other debt you have to come due, causing bankruptcy. Is this nasty little fact written anywhere? NO! It is not.
My husband and I dodged a bullet here. Thank god he knows how to research programs on the internet. Starting in December, I began my quest to ask Bank of America for assistance on our mortgage. Due to a restructuring of my husband's salary and other issues, we needed help. What we asked for was a few months forbearance - a break, basically. We just wanted them to tack the next 6 months of payments on to the end of the mortgage. After many transfers, disconnected lines and telling and retelling of our story, I was told that was not possible. First we had to see if our mortgage itself could be changed, through Making Homes Affordable. After a total of 7 hours on the phone over 4 phone calls, we had passed the preliminary hoops and were told to wait for papers in the mail.
The Making Homes Affordable papers came in mid January. We opened the package, read them and started to gather up the supporting documents. Later that night, my husband walked in, white as a sheet. He said, "I've got bad news - we can't do this program." He had been researching. He felt there must be a catch - and indeed there was. Bank of America would have subordinated our 2nd mortgage with Wells Fargo (require Wells Fargo to write-off the loan as bad debt which would appear on both of our credit ratings as ‘bad debt’). After that, our primary mortgage with Bank of America would be labeled as ‘in collections’. The net effect of “Making Homes Affordable” would be to lower our credit ratings down into the low 400s (we are both above 700 right now). A credit rating of 400 would cause all of our consumer credit to become due immediately.
On-line, he was reading story after story of families, not in too bad of shape but still needing help, absolutely decimated by this supposedly helpful government program. So, at the risk of sharing too much of our situation, I wanted to get the word out there....stay away from Making Homes Affordable.
It sounds like the home loan modification program would totally not work for your situation (because you have an 80/20), but have you looked into the home loan refinance part of MHA? Maybe you can lower your payments with a lower interest rate on your loan(s).
ReplyDeleteHow did I miss this post? This is shocking! We were able to refinance our home last fall. It made a dramatic difference in our family's bottom line. It was a bumpy road. Hours on the phone and threats to the mortgage company to fly down to their headquarters to demand action (and smash heads). They did everything in their power to make it NOT happen. After 9 long weeks it all worked out.
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