Mortgage Modification

[ExGingi]

What's the process?

Call your mortgage servicer (the bank you make your mortgage payments to). Tell them you have a covid-19 hardship.

[Euclid]

I am not aware of a deadline.

I would presume it's one shot, though in the MHA/HAMP days there was at a certain point a HAMP-2 IIRC (though I don't think any modifications I helped with might have qualified, as I always designed them to maximize the modification).

Some resources:

https://www.hud.gov/sites/dfiles/SFH/documents/COVID-19_Recovery_Loss_Mitigation_Options_ML_2021-18.pdf

https://sf.freddiemac.com/working-with-us/servicing/servicing-solutions/freddie-mac-flex-modification

https://sf.freddiemac.com/content/_assets/resources/pdf/other/covid_ref_guide.pdf

https://www.knowyouroptions.com/options-to-stay-in-your-home/overview/modify-overview/flex-modification

Ugh I should've deferred my payments; I'm current with my payments. Looks like I'm not going to get much - my (refied) mortgage is only 24 months old and I'm at 3.125% which is below the current PMMS. So the most they'll likely do is tack on 2 years at the end, big deal. I guess I can wait until PMMS rates drop.

[ExGingi]

Ugh I should've deferred my payments; I'm current with my payments. Looks like I'm not going to get much - my (refied) mortgage is only 24 months old and I'm at 3.125% which is below the current PMMS. So the most they'll likely do is tack on 2 years at the end, big deal. I guess I can wait until PMMS rates drop.

Fannie and Freddie flex modifications give you a 40 year term.

Also worth noting, that during the MHA days the final rate was set based on the PMMS rate AT THE END OF THE 3 MONTH TRIAL PERIOD. I don't know if that is the case currently. If it is the same, one just has to pray for a lower PMMS rate 3-4 months out.

[Euclid]

Fannie and Freddie flex modifications give you a 40 year term.

The hud document says 360 months/30 years? Why is Freddie/Fannie doing different? I wonder if MERS would as well.

[yesitsme]

Fannie and Freddie flex modifications give you a 40 year term.

Also worth noting, that during the MHA days the final rate was set based on the PMMS rate AT THE END OF THE 3 MONTH TRIAL PERIOD. I don't know if that is the case currently. If it is the same, one just has to pray for a lower PMMS rate 3-4 months out.

Do you actually save money or you're pushing the can down the road

I just refinanced @ 2.75 would you do something different

[Euclid]

Do you actually save money or you're pushing the can down the road

The loan is the same amount stretched over a longer period so your monthly payment is less.

The gamble (not really a gamble) is that your money today is worth more than your money in 30-40 years from now.

[Hjay]

Closed on a house at the end of august so I’ve made just one payment on my mortgage. Rate is 3.23. Would I be able to do this? Seems like PMMS is at 3.14 so I’d definitely save a few dollars getting a slightly lower rate. Any reason not to do it if I can?

[Euclid]

Also worth noting, that during the MHA days the final rate was set based on the PMMS rate AT THE END OF THE 3 MONTH TRIAL PERIOD. I don't know if that is the case currently. If it is the same, one just has to pray for a lower PMMS rate 3-4 months out.

The interest rate of the modified Mortgage is no greater than the most recent Freddie
Mac Weekly Primary Mortgage Market Survey (PMMS) Rate for 30-year fixed rate
conforming Mortgages (U.S. average), rounded to the nearest one-eighth of 1% (0.125
percent) as of the date the Borrower is offered a COVID-19 Recovery Modification.

Page 39 https://www.hud.gov/sites/dfiles/SFH/documents/COVID-19_Recovery_Loss_Mitigation_Options_ML_2021-18.pdf

[ExGingi]

Do you actually save money or you're pushing the can down the road

I just refinanced @ 2.75 would you do something different

After the fact it's too late. Had you gotten a modification you might have been at the same rate with a 40 year loan (and possibly interest free forbearance of part of the balance) with no closing costs. The fact that you might have done better doesn't mean you did bad. If you took cash out for a good purpose then you need to compare that to a modification + HELOC.

[yesitsme]

After the fact it's too late. Had you gotten a modification you might have been at the same rate with a 40 year loan (and possibly interest free forbearance of part of the balance) with no closing costs. The fact that you might have done better doesn't mean you did bad. If you took cash out for a good purpose then you need to compare that to a modification + HELOC.

I didn't cash out but I removed my co signer which I don't think is possible with a LM

[ExGingi]

I didn't cash out but I removed my co signer which I don't think is possible with a LM

I believe one could get a loan modification with a co-signer. As far as removing a co-signer (is said co-signer on the deed?) afterwards, that might be a question better answered by a mortgage banker (or possibly also a mortgage broker).

[ExGingi]

The hud document says 360 months/30 years? Why is Freddie/Fannie doing different? I wonder if MERS would as well.

MERS isn't a lender. It's an electronic registry of (almost all) mortgages. When finding your mortgage on MERS you should be able to find who owns the note if you have the borrower's name and SSN. Though it's not 100% accurate. For example my mortgage lists BNY Mellon as the owner of my mortgage, while it is actually BNY Mellon AS TRUSTEE for a certain MBS trust. When it comes to loan modifications that could make a huge difference, as they have much less discretion as a trustee than they have for their own assets.

[Hjay]

Closed on a house at the end of august so I’ve made just one payment on my mortgage. Rate is 3.23. Would I be able to do this? Seems like PMMS is at 3.14 so I’d definitely save a few dollars getting a slightly lower rate. Any reason not to do it if I can?

@ExGingi I’d appreciate your opinion. Thanks

[ExGingi]

@ExGingi I’d appreciate your opinion. Thanks

It would depend on who owns the loan and on you stating that you have a COVID-19 hardship. (Many unvaccinated people can easily claim a hardship due to fresh draconian mandates and restrictions)

Even with the same interest rate, your payment could be lowered by extending the term to 40 years and/or deferring part of the principal to the end of the term, interest free.  They do try to target a 20% or 25% reduction in monthly payment.

[Hjay]

It would depend on who owns the loan and on you stating that you have a COVID-19 hardship. (Many unvaccinated people can easily claim a hardship due to fresh draconian mandates and restrictions)

Even with the same interest rate, your payment could be lowered by extending the term to 40 years and/or deferring part of the principal to the end of the term, interest free.  They do try to target a 20% or 25% reduction in monthly payment.

Thanks for your help.
Was sold to Freddie Mac soon after I closed. Extending the term causes me to pay more interest or there just taking what I have & stretching it out longer? A 25% reduction would be amazing for me. Is there any restrictions on how old the loan needs to be already? I literally have only made one payment. & yes Covid hardship is able to be claimed.

[ExGingi]

Thanks for your help.
Was sold to Freddie Mac soon after I closed. Extending the term causes me to pay more interest or there just taking what I have & stretching it out longer? A 25% reduction would be amazing for me. Is there any restrictions on how old the loan needs to be already? I literally have only made one payment. & yes Covid hardship is able to be claimed.

If you owe money for a longer period of time, you will definitely end up paying more interest (except if a portion is deferred interest free), but if you have an improvement in CURRENT cash flow and can get more than 3.125% out of that improvement in cash flow (if you don't know how/where, you can PM me), I think it makes a lot of economic sense.

As to your question on whether it isn't too soon, I really don't know. You can try reading through some of the information in the links I posted above.

[tov hashem]

My interest rate is 5.375%. Where do I start? Investment property, freedom mortgage.

[ExGingi]

My interest rate is 5.375%. Where do I start? Investment property, freedom mortgage.

If you had Covid-19 related hardship (tenants not paying?) start by calling your servicer and ask what kind of relief is available.

[zagguru]

has it been confirmed that this has no impact on your credit? I read previously (pre-covid) that it takes a pretty hard hit on your credit to do a modifciation

[Shmulie]

does this work on a HELOC that is in the repayment stage?