Randy Johnson, president of Independence Mortgage Co. in Newport Beach, author of “How to Save Thousands of Dollars on Your Home Mortgage” and a mortgage broker since 1983, answers questions…
Q. I have been reading about Obama’s new housing bailout, and they say that homeowners who are “underwater” will still be able to refinance if their home loan was backed by Fannie Mae or Freddie Mac. Immediately, I started thinking, “do I qualify?” I’ve asked friends and have searched the Internet and have found varied responses to the one question I have — how do you find out if your loan is backed by Fannie Mae or Freddie Mac? We write our (whopping) mortgage check to Wells Fargo every month, and it’s not like the bank teller has that information readily available. I can’t find a straight answer anywhere. And if I do find out my loan is backed by Fannie or Freddie, what do I do next?”
A. Regarding not being able to get a straight answer, don’t feel like the Lone Ranger. But I do have good news for you. If your loan servicer won’t or can’t tell you, you can still find out. To see if Fannie Mae owns it, go to www.fanniemae.com/homeaffordable. For Freddie Mac the website is www.freddiemac.com/avoidforeclosure/.
Fill out their forms. Make sure your name and address are exactly the same as on your loan coupon. Just for fun I filled out the forms at each Website to see which one owns my loan. I am still awaiting a response.
If the loan is owned by either Fannie or Freddie, then you would qualify for the recent initiative for reducing the rate on loans that are between 80 to 105 percent loan-to-value (LTV) without mortgage insurance (PMI). If the loan required PMI initially, the lender can use the existing PMI contract.
The catch on this for Orange County owners is that any home bought in the last few years has likely dropped 20 to 30 percent, maybe more, and would be over 105 percent LTV. However, people who bought in the early 2000s might still be in that bracket and certainly can benefit.
REALITY: this program has just been announced and it is highly likely that servicers have not yet developed their own policies and procedures and have not yet trained the staff on how to respond to inquiries. For an example, see THIS.
Danny in Corona asks:
Q. I purchased a condo in Oct. 2005 and financed both first and second mortgages at Chase. The first mortgage is a deed of trust (fixed rate) and the second mortgage is a California close-end deed of trust (a balloon note, but fixed rate). I have been unemployed since Oct. 2007 and all of my savings and emergency funds have been exhausted. I’m two months behind on both mortgages and approaching three months behind. I listed my condo for sale for over a year. Unfortunately, I had no luck. I also consulted with real estate brokers about doing a short-sale. However, they didn’t want to take it. I have no clue why. Anyway, if I successfully negotiate with Chase to have deed-in-lieu of foreclosure on my property or if Chase forecloses on my property, may Chase seek delinquent judgment on the second mortgage (closed-end deed of trust)? I have not refinanced since I purchased my condo.
A. First, I’m am sorry to hear about your situation and you have my prayers and good thoughts for a better outcome. You really need to ask a lawyer because technically that is a legal question. I think you will feel better informed if you look at a Website www.foreclosure.com/statelaw_CA.html, which summarizes current law. Frankly, I think that lenders have their hands full today and that they rarely go after defaulting borrowers, so I wouldn’t worry. Best of luck to you.
That’s it. If you want Johnson to answer a question, email it to Mathew Padilla at mapadilla(at)ocregister.com. Include your name or nickname and the city you live in — that information will be published with your question.
Johnson will answer up to three questions each week, so keep checking back for a response. If many questions are submitted, it could take a while to get a response, or he may never get to it. Also, readers keep submitting variations on the same question, which has already been answered: what to do when you can no longer afford your mortgage. I have decided not to publish most of those questions, because they are repetitive, although I appreciate the difficult situation many homeowners are in these days.
Read prior questions and answers by clicking on the headlines below…
- Paying off a mortgage vs. refinancing
- Mortgage problems of the wealthy
- The skinny on 40-year mortgages
- Refinancing questions and answers
- How to buy with little money down
- Do banks renegotiate mortgages for ‘good’ borrowers?
- Is it time to buy a rental property?
- Caution urged on mortgages that fund retirement
- Refinancing can be tricky if your home was recently for sale
- Shopping for lowest rate is dumb way to get a mortgage
- Speedy mortgage payoffs could cost you
- Paying your mortgage may be the best use of your money
- A ‘good’ borrower these days is someone who…
- When insurers kill your mortgage application
- Mortgage insurance companies not giving breaks
- How price reductions work when Uncle Sam owns a foreclosure
- How long should we wait to refinance?
- Can you be too old to get a mortgage?
- Why aren’t foreclosures cheaper?
- When you can’t afford your mortgage
- How much to put down and other mortgage answers
Find out more about: MORTGAGE ANSWERS | MORTGAGE RATES | FORECLOSURES | HOME PRICES | INVENTORY | RENTS | FED |
A.
I would suggest you actually call a customer service rep at Wells Fargo they should be able to tell you if the loan is backed by FNMA or Freddie. The teller at the bank isn’t going to be able to tell you much you need to talk to the mortgage servicing side of bank.
B.
Just a word of advice a deed-in-lieu will end up in you being socked with massive tax penalties so I would be sure the check with a lawyer before you do that, also Call your loan servicer about a shortsale because they are the one that would be agreeing to a shortsale. If you have had your property on the market for a year then you have already done one of the requirements for a shortsale. Don’t be afraid to call your loan servicer(Bank) even if you are not yet delq. I find it amazing that a lot of people don’t want to call the bank but instead go to thrird parties. This is how people get screwed by con artists.
Obama plan FAQ link:
http://financialstability.gov/docs/borrower_qa.pdf
I can already tell you that fiscally responsible homeowners won’t see a dime. This follows the “nice guys finish last” theory.
It’s nice Obama initiated this stimulus plan, but the banks aren’t acknowledging it, so I can’t refinance since I’m at 83%. Obama says they changed it to 105%. BofA says that’s not their policy and they didn’t change it and it’s still at 80%. Unbelieveable! Therefore, I can’t refinance because the banks aren’t changing THEIR policies. Obama did nothing to help homeowners.
Has Obamas policy taken into effect, as far as I know a lot of banks havent instituted this because all the details have not yet been digested. I would suggest that you give it some time and call back. There are so many different types of plans, and help out there that a new one will take time for the details to get ironed out.
Just keep calling if BofA says its not their policy right now that may change next week or the following.
You also need to not forget that they mortgage companies are getting swamped due to the amt of calls they get. So new info and such can be delayed.
How will LTV be determined? Is this based on last appraisal, a new appraisal or State Equalized Values? Is it true that new appraisals are not required for exisiting homeowners?
My mortgage is a Freddie Mac with Countrywide. I am not behind but underwater and the payment is more than 31 percent of my gross. I called Countrywide. They were RUDE and told me I didn’t qualify for any help under Obamas plan because I wasn’t behind and I didn’t have a physical disability or divorce or job loss. I tried to explain that part of the plan included those who aren’t behind but are underwater and have high mortgage payment. no good. So do I have to stop making my payments to get some help?
Cyndy you probably got a rep that didnt have a clue whats up, this plan is still new I would continue to call for updates, if you get a person that is rude ask to speak to a manager, be sure get the persons name. I would say that the mortgage companies are overwhelemed with all the people asking for help and the fact that all these new plans are coming out the speed with which everyone will get informed and get training is slow.