Is there a less expensive way to modify FHA loan besides the more expensive FHA streamline refi?
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We bought our home in October 2008, and are current with our payments (with no late payments ever). We applied for a loan modification (due to a medical hardship) and we have been told that our FHA loan doesn’t qualify for the loan modification. Our lender (GMAC mortgage) has taken month a a half just to tell us that, and they now wants us to wait another 2 months to tell us if they can do anything for us at all. We are afraid that they are going to tell us that the only option available to us is a streamline refinance which will cost us another 6,000 of our equity. In a meantime, we are using credit to cover expenses and I’m worried about my credit score going down. I would love to be able to borrow against my equity, but no one wants to lend us money with our high debt ratio. My question is if there are any other programs that GMAC mortgage could put us into? Or do you think I should just do the the streamline refinance and save another 2 months of “waiting game” just to be told that there isn’t anything they can do.
3 Comments
July 24th, 2009 at 6:47 pm
Let me get this straight…YOU asked for a loan with terms YOU agreed to for a house YOU signed a contract on to purchase in Sept 2008 and now less then 1 year later; YOU are asking the bank to “modify” the terms of the loan that YOU applied for with terms YOU agreed to……
How would you feel if the bank was coming to you and saying “Sorry, but we are changing the loan terms because of things that you have no control over. we are raising the amount you owe, we are increasing the interest rate, and this is increasing your payments by several hundred dollars a month.”????????
LOTS of people are forgetting that they gave their WORD to repay money borrowed from the banks. I guess “money” isn’t really money unless it is in YOUR pocket. If it is on a loan docs then it is just a number but if it is written as equity in the house then you DESERVE to have it in your checking account.
You signed agreement with the Bank and they TRUSTED you to stick to it and repay according to the terms they LOANED you money on and now you are telling the Bank: ” I can’t be trusted to do as I say I will” but please don’t hurt my credit for that.
News Flash to you - YOUR credit rating is a number based on how TRUSTWORTHY you are to repay loans that you have taken out in your name.
July 25th, 2009 at 8:12 pm
Loan modification can easily take 3-6 months with no guarantee of your loan being modified to your satisfaction, streamline refi on the other hand is a rate reduction that can be structured to have minimum out of pocket expense to you, can be done within weeks and will only be allowed if there is benefit to the homeowner. Need more info contact me at fhasource@gmail.com - Eddie
July 27th, 2009 at 3:07 am
A FHA streamline loan is not going to cost you anywhere near $6000. You will be able to get back the lions share of your MMI and then apply it to toward the streamline.
I just did a FHA streamline loan for my son and his cost were around $1500 and no out of pocket expense. I would do it fast because interest rates are rising rapidly. The marketplace has finally come to the realization that the Obama bailouts will soon bring a high inflation