Wells Fargo can kiss my “sorrybarb” on this one. Since being laid off, we thought we might be able to re-finance our home loan since we will be going through a hardship. Well they say that the government won’t allow them to help those that are unemployed because of the bail-out. The only way we can re-finance is if I am employed and then they can help really screw us over. Oh and we should have stopped paying our credit cards, because credit cards really will help you if you stop paying them. :rolleyes:
Hivemind, Is Wells Fago feeding us a load of crap about the refinancing and if so, please direct me to the information to help me out.
I can’t help with mortgage, but the part of credit card I’ve run into myself. If you are struggling with payments and ask for help, they say they can’t offer any assistance until you default on a payment. You have to weigh that with any big purchases, future loan applications, car purchases, credit cards, etc., you plan for the future. Defaulting really hurts your credit, but if you’re not planning anything it may be worth it for the assistance you get afterwards.
Doesn’t sound like the thing to do in your case though.
You should be able to just refinance if you want especially if you can get a lower interest rate. I’d talk to a loan officer again about refinancing and see if the real problem on doing the refinance is your employment status. They should able to run the numbers for you to see if you can refinance at a lower rate and payment. It also might depends on the type of interest rate you have right now.
The bailout rules and regulations only apply to those who have already defaulted on their loan and are applying for assistance from the bailout. And most of those people are the ones who paid WAY more for the home than what it was worth and had a ballooning interest rate.
You don’t want to stop paying on your credit cards! That will ruin your credit rating almost immediately and they will raise the interest rate your are paying. If you got any type of severance from your former employer you’d be better off using it to pay down as much debt as you can.
I also called my sister who works at a bank in the loan dept. She said Wells is feeding you a line of craaap. And if they don’t want to look at refinancing for you then you should go to a Community bank to look at refinancing. You’ll get much better service and they aren’t so touchy about loans as the bigger bank who got hit really hard with mortgage failure.
For the last year I worked for a non-profit that provides housing counselors to homeowners who need help, so I’m pretty good on this topic, despite never having owned a home.
It is true that you may not qualify for a HARP refinance (the refi funded through the federal program created with the stimulus package). It has zero to do Wells Fargo’s bailout from the government. To qualify for a HARP refi you have to be employed and have enough household income to cover payments at the new level. Does your SO have a job at the moment? Her job may provide enough income to qualify you for a HARP refi if you have low debt on other things, like card, student loans, etc.
If you are having trouble with your mortgage payments because you’ve become unemployed/had serious reduction of income, you probably want to try for a mortgage modification, though. You should first try the government program called HAMP–the Home Affordable Modification Program. Right now, about 25% of new mods are through HAMP. HAMP mods might offer the best terms, if you are eligible. The average monthly payment reduction is $500.
The majority of new mods right now are being made by the lenders outside of HAMP infrastructure–including Wells Fargo. Wells is one of the worst behaved lenders, based on the industry surveys of the biggest institutions, but they are still doing a lot of modifications.
HAMP is also rolling out two new components in September. If you can make the Sept. payment as usual you might be able to take advantage of these soon thereafter. One is an emergency loan program based on the hugely successful HEMAP loans out of Pennsylvania: very low interest loans that can be paid back over 5 years. The other is a 3 month waiver of your mortgage payments–that’s likely more costly because the money is added back to the end of your mortgage and accrues interest at your regular rate. But if you are highly skilled or in a high-demand field and feel confident that you will be employed in 3-4 months max, it might be a great fit.
Many states are also offering strong programs, too. Pennsylvania has that loan program. The President’s “hardest hit fund” provided almost $10 billion to the ten states with the worst foreclosure problems, and that money is now flowing. Nevada, California, Florida, Michigan, Arizona, and 5 others were funded.
One thing that I would not recommend is stopping payment of your credit cards. I would instead significantly reduce payments at the same time that you call to try to get your balance reduce or interest rate cut. The card companies are being vicious about reporting to the credit bureaus right now and not paying one card is grounds for another card to raise your rates or cancel your account. Organize your cards all together. Identify all interest rates, and pay off the most you can afford on the highest rate card. Pay minimum balances on the rest. Keep one card with a low rate and decent balance in your wallet to help you stretch your unemployment checks but put the rest of the cards away so you don’t keep adding to the balances.
A huge problem for all lenders and homeowners is that most of the call center staff are a few tacos short of a combo meal. They haven’t been properly trained, they don’t have the critical thinking skills to assess cases that are the least complicated, and they are not empowered to make any real decisions.
This is why you need a housing counselor from a non-profit organization. Ideally, your housing counselor should have HUD or NeighborWorks certification. Your housing counselor will NEVER charge you to access his or her services. Initial studies show that people who work with a housing counselor are something like 40% more likely to get a mortgage modification than people who try to do it on their own. These people who are experts at preventing foreclosure and obtaining mortgage mods. They know how to make things happen with the lenders/servicers. They also can afford to sit on the phone for 5 hours at a time to deal with a lender/servicer on your behalf–it’s their job!
Making Home Affordable is the President’s umbrella term for all the new programs to address the foreclosure crisis: mortgage modifications, refinancing, short sales, etc. The HAMP website will tell you about eligibility, provide you with the basic forms, etc.
Hope Now is also a great way to get connected to a housing counselor: http://www.hopenow.com/
The organization I used to work for could also be helpful, but their website sucks. You can call them at 202-628-8866 to get connected to an intake specialist.
Penultimate word: there are a lot of scammers out there. DO NOT EVER agree to work with someone who will “rescue” you from foreclosure in exchange for a fee! Housing counselors’ work is funded through grants and government contracts–they will not charge you if they are legit.
If you’re successful working with a housing counselor who helped you for free, you could always repay some of the karmic debt by donating to the organization.
Final word: Have hope, EagleCat! And be persistent. GOOD LUCK! PM me if you need to talk more details or have questions you don’t want to share here.
I’d just like to say, thanks for all the great info, Starbuccaneer! (even though I don’t own a home, nor am I in a situation to do so anytime soon… but still, these things are good to know).
I also love your turn of phrase, a few tacos short of a combo meal. I’m stealing it. This is your notice of my stealing it
(even though I don’t own a home, nor am I in a situation to do so anytime soon… but still, these things are good to know).