How To Get Relief For Your Mortgage

New York Times:

There are several prerequisites to consider if you're a borrower who is paying on time and wants some kind of a break. The home in question must be your primary residence. And the banks generally need to have your mortgage on their books and not have sold it off to Fannie Mae or Freddie Mac or someone else.

Then, the big question will be how financially strained you are. Perhaps your loan is about to adjust to a higher rate that is barely affordable -- or already has. Or maybe you live in a two-income household where one income has disappeared or fallen drastically because of reduced sales commissions. Or, possibly, you lied about how much money you were making when you applied for a mortgage back in 2006 when nobody bothered checking.

Whatever the reason, the bank wants to know your current debt to (pretax) income ratio. If your monthly household income is $10,000, the bank may consider you overburdened if you're paying more than $4,000 or so toward your housing costs, or 40 percent of your income. So don't bother trying to get a better deal if your percentage is down near 25 percent.

If you think you may qualify, then you need to figure out whom to talk to. You should expect that every major mortgage lender or servicer is utterly overwhelmed right now. Calling the 800 number on your bank statement may lead to long hold times or representatives confused about changing internal guidelines.

Read the whole story: New York Times

Comments

[charitabledonation]

I'm getting tired of both the left/right media portraying that "homeowners" need a bailout.

Looky: These are HOUSEs. The people who bought them at over-inflated prices are just as much to blame as the everyone involved in the past 5+ years of the bubble.

I am really SORRY for you if you have to go through a foreclosure. There are MANY homeowners and RENTERS who did NOT do themselves the injustice of purchasing something they did not EARN (aka, based on their WAGES).

Remember those good old days when house prices were based on what people could actually afford???

The answer is that artificially propping up these house values with "bail out" or reduced or restructured mortgages does no help or justice to anyone. It is not allowing the natural order of WHAT GOES UP, MUST COME DOWN.

Instead, we get 'HELP US" whaaa. Taking my tax money to help these businesses that are failures, these banks rob us, and these house-owners who need to RENT like the rest of us really chaps my hide. I have no pity for those who don't understand that a bad decision is what it is and the rest of us shouldn't have to pay for it. It is welfare for the wealthy and it is pathetic. It punishes those people who are right on with their mortgages, renters and everyone else who understands that the media is crying wolf for these "poor" house owners.

[darthdarcy]

Declare yourself a corporatio­n...!

[mrcontinental]

A can of gasoline and some matches worked in the old days but now with the insurance companies being insolvent what's a guy to do.

[DundeeNatalSA]

so if the banks reduced the loan amount to reflect the truer value of the home, would that not help?

[mrcontinental]

Only if they agree to eat the $150,000 to $200,000 in some markets that the homes have loss and we know that ain't happening.

[PT6]

Gave Banks $2 TO $3 Trillion and NOTHING!

$0 to Bleeding Homeowner Mortgages so banks keep collapsing and market TANKS!

Keep avoiding ROOT Cause and it will be DEPRESSION!

Better approach: Fannie and Freddie offer direct automated internet loans using FED Rate of 1% + 2% or 3% to refi homes and avoid mortgage fees, bank fees, title fees, most verification fees, and most documentation work.

Any homeowner with a "TRICK" adjustable mortgage should be eligible if they can make the "NEW MUCH LOWER PAYMENT" and that target should be 40% of net income!

Mortgages are easy to quantify, the INTERNET and automation can do 98% of the verification and loan application and 2% manual for final check!

Why such low rates? Because Middle men Removed!

Most "TRICK" mortgage jobs have been eliminated when Investment Banks ran for cover! Those dishonest brokers made massive profits and knew they were setting people up for disaster. Automated systems create a better economy for ALL and why should antiquated mortgage business be excluded after such corruption?

Savings: Pay debts, buy American Green Cars, buy Real Estate, and American goods plus help other countries in crisis by buying their goods!

Families could save $500 to $1,500 per month and even more.

Since ENTIRE ECONOMY is moving toward possible Depression we need funds where they do the most GOOD over the LONGEST RUN and lower mortgages are BEST LONG TERM STIMULUS possible!

[Sundialsvc4]

All of the things that you describe are "voluntary," from the bank's point of view. No one is forcing them to change their accounting to be honest again; no one is telling them that charging 35% interest on anything in this world is what's called "usury."

The situation that you describe does not address the fundamental problem here: that the "asset" that you are paying all this money toward is not worth what you are now obligated to pay for it. And, it never will be again. That's why foreclosures happen: the debtors are simply walking away. The Sheriff isn't walking up to a busy household to serve papers: he's unlocking the door of an empty house that, by the way, has been trashed.

Let's face it: if I'm stupid enough to be on-the-dole for $500K inside a house that has no willing buyer at half that price, then I am drowning. What do I do? Get out of the damned pool! Leave the keys under the doormat and no forwarding address. Stick a sign on the front door that says, "whistle for it."

If the banks want to negotiate, they have to meet in the middle. And I don't care what they say to the investors that they stiffed with all those worthless "mortgage-backed securities­." I gotta life to lead, and one way or the other, I'm gonna.

[iambusto]

and people like you are demanding that the banks give out NEW car loans and home loans.

do you see why banks are unwilling? this is a nation of deadbeats.

[KillTheMessenger]

If your monthly household income is $10,000 and you couldn't work out the details of an ARM before you signed the loan, you are being overpaid because you sure as hell suck at math.

And what kind of article assumes that people who are in foreclosure now have such a high level of income anyway??? Sounds kind of ridiculous. Many people in trouble right now are probably not making half that much.

[DundeeNatalSA]

i agree. yikes. if i made 10K a month.. wow.