ABA consumer guide to mortgage modification : how to lower your mortgage payments with the Home Affordable Modification Program

ABA consumer guide to mortgage modification How to lower your mortgage payments with the Home Affordable Modification Program

Dean Allen Kackley

Book - 2014

Many homeowners seeking to refinance their mortgages and reduce their monthly payments may be unaware of the federal Home Affordable Modification Program which provides incentives to lenders to modify home loans. The program is geared for homeowners who are under financial duress, owe more on their mortgage than their homes are worth, or are facing foreclosure. The ABA Consumer Guide to Mortgage Refinance explains the benefits, qualification requirements, and the process for participating in the program. Many lenders do not fully understand the program and do not offer it to their clients. As a result, some homeowners are turned down, even though they may have qualified under the program. The book will empower readers with the knowledge to ...discuss the program with lenders, stand up for their rights under the program, and obtain the most favorable refinancing terms possible.

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332.722/American
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Subjects
Home Affordable Modification Program (U.S.)
Mortgage loans > Law and legislation.
Loan workouts.
Mortgage loan servicing.
Foreclosure > Prevention.
Published
Chicago, Illinois : Ankerwycke 2014.
Language
English
Main Author
Dean Allen Kackley (author)
Physical Description
xvi, 222 pages : forms ; 26 cm
Bibliography
Includes bibliographical references (pages 213-216) and index.
ISBN
9781627227636
  • Preface
  • Introduction
  • Chapter 1. How It Works: Program Basics
  • What to Expect
  • What Is HAMP?
  • How to Use HAMP
  • Background
  • Overview
  • Program Criteria
  • Summary
  • Chapter 2. Where to Start: Eligibility
  • Criteria: Summary
  • Tier 1 and Tier 2 Compared
  • Common Criteria Explained
  • Tier 1 Criteria Explained
  • Tier 2 Criteria Explained
  • Change in Circumstances
  • Limits on Multiple Modifications
  • Servicers and Investors
  • Summary
  • Chapter 3. Getting Started: Initial Package
  • Request for Mortgage Assistance
  • Borrower Information
  • Hardship Affidavit
  • Principal Residence
  • Income and Expense
  • Other Properties Owned
  • Assistance Requested
  • Dodd-Frank Certification
  • Government Monitoring
  • Acknowledgment and Agreement
  • Additional Provisions
  • IRS Forms
  • Evidence of Income
  • Summary
  • Chapter 4. Hardship: Statement and Affidavit
  • Affidavit
  • Hardship
  • Hardship "Events"
  • Explanation
  • Hardship Events Explained
  • Summary
  • Chapter 5. Delinquency Is Not Required: Risk of Default
  • Overview: Imminent Risk of Default
  • Determining Imminent Risk of Default
  • Summary
  • Chapter 6. Modify or Foreclose? Net Present Value
  • Net Present Value
  • Evaluation Process
  • Running the NPV Test
  • Predicting NPV Results
  • Principal Factors Influencing NPV Test Results
  • Value of Property Compared with Size of Mortgage
  • Determining Value
  • Trends in Prices
  • Likelihood of Foreclosure
  • Likelihood of Default after Loan Modification
  • Summary
  • Chapter 7. Reduce Your Payments: The Modification Waterfalls
  • Introduction to Modifying Loans
  • Tier 1 and Tier 2 Waterfall Steps Summarized
  • Differences between Tier 1 and Tier 2 Waterfall Steps
  • Standard and Alternative Modification Waterfalls
  • Monthly Mortgage Payment Ratio
  • Common Waterfall Steps
  • The New Loan Amount
  • Step 1. Capitalize the Loan Amount
  • Divide the Loan Amount
  • Step 4. Principal Forbearance
  • Tier 1. Waterfall
  • Target Monthly Mortgage Payment
  • Step 1. Capitalize the Loan Amount
  • Step 2. Reduce the Interest Rate
  • Step 3. Extend the Term and Re-amortize
  • Step 4. Principal Forbearance
  • Setting the Interest Rate
  • Tier 2. Waterfall
  • Acceptable DTI Range
  • Step 1. Capitalize the Loan Amount
  • Step 2. Adjust the Interest Rate
  • Step 3. Extend the Term and Re-amortize
  • Step 4. Principal Forbearance
  • Calculate the Payment and Ratio
  • Principal Reduction Alternative
  • Alternative Modification Waterfall
  • Equity Share Arrangements
  • Debt Forgiveness
  • Property Value
  • Summary
  • Chapter 8. The Other Burden: Monthly Debt Expenses
  • Monthly Debt Ratio
  • Excessive Debt Ratio
  • Summary
  • Chapter 9. Pre-modification: Trial Period
  • Trial Period Plan Notice
  • Lender Initiative
  • Other Provisions
  • Temporary Suspension of Foreclosure
  • Request Suspension of Collection Activities
  • Due-on-Sale Provision
  • Escrow Account
  • Mortgage Insurer Approval
  • Failure to Complete the Trial Period
  • Summary
  • Chapter 10. Modification
  • Taking Effect
  • Payments
  • Payoff
  • Credit Reporting
  • Default after Modification
  • Financial Incentives
  • Borrower Incentives
  • Servicer Incentives
  • Investor Incentives
  • Incentive Limitations
  • Re-modification
  • Summary
  • Chapter 11. Non-approval: Required Disclosures and Remedies
  • Non-approval Notices
  • Appealing Non-approval
  • How to Verify an NPV Outcome
  • Disputed NPV Input
  • Property Value
  • Reevaluation
  • Alternative to Appeal or Dispute
  • Summary
  • Chapter 12. Escalation: Challenging Noncompliance
  • Resources
  • Escalated Case
  • Third-Tarty Escalation
  • Servicer Compliance
  • Resolution
  • Suspension of Foreclosure Sale
  • Summary
  • Chapter 13. Paper Trail: Documentation
  • Organizing the Documentation
  • Submitting Information
  • Attachments and Enclosures
  • Mortgage
  • Occupancy Status
  • Income
  • Income Categories
  • Cash Reserves
  • Federal Tax Forms
  • Other Required Documentation
  • Summary
  • Chapter 14. Working with Your Lender
  • General Contact
  • Single Point of Contact
  • Twelve Questions to Ask Your Lender
  • Submitting Information
  • If Declined
  • Third-Party Advocates
  • Summary
  • Chapter 15. Circumstances and Consequences
  • Deficiency Liability
  • Tax Liability
  • Canceled Debt
  • Credit Score
  • Divorce
  • Identical Borrowers
  • New Borrower
  • Title Held in Trust
  • Ineligible Mortgages
  • Summary
  • Chapter 16. Short Sale: Modification Alternative
  • What Is a Shore Sale?
  • Deficiency
  • Considerations
  • Home Affordable Foreclosure Alternatives
  • Deed in Lieu of Foreclosure
  • Summary
  • Chapter 17. Other Making Home Affordable Programs
  • Second Lien Modification Program
  • Home Affordable Refinance Program
  • Principal Reduction Alternative
  • Unemployment Program
  • FHA-HAMP
  • FHA Short Refinance Option
  • Summary
  • Conclusion
  • Borrower Initiative: The Problem
  • Borrower Initiative: The Solution
  • Final Words
  • Appendix A. Eligibility Comparison
  • Appendix B. Modification Waterfall with Principal Reduction Alternative (PRA)
  • Appendix C. Modification Worksheet Tier 1
  • Appendix D. Modification Worksheet Tier 2
  • Appendix E. Income and Expense
  • Appendix F. Profit and Loss
  • Appendix G. Financial Statement
  • Appendix H. Request for Mortgage Assistance (RMA)
  • Appendix I. IRS Form 4506-T
  • Appendix J. IRS Form 4506T-EZ
  • Appendix K. Documentation List
  • Appendix L. Escalation by Third Party
  • Appendix M. Third-Party Authorization
  • Appendix N. Scam Avoidance
  • Appendix O. Mortgage Relief Definitions
  • Appendix P. Making Home Affordable Programs
  • Appendix Q. Payment Constant
  • Glossary of Terms
  • Notes
  • Index

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