Chase Loan Modification Agreement Increases My Payment By $1300
by B. E.
Confused and angry. Entered a chase Loan Modification Program in August 2009, never late with mortgage payments but having difficulty making the monthly payment.
Went from mortgage payment of $3,450.00/month to a Trial Modification of $2,852.00 for a 3 month trial period lasting 9 months because Chase Bank's process is so screwed up.
Received our Loan Modification agreement today, March 30 2010. The proposed modified mortgage payment is $4,726.00, a $1,300/month increase above the original payment!!
Since I can't reach my loan negotiator to talk, what if I don't sign the new agreement? Can I simply go back to my original payment?
Chase Mortgage Loan Modification Answer:
by Chase Mortgage Loan Modification Expert - Dan North
Unfortunately this is the free help you get when you call your lender for a loan modification. This is the real fraud going on in the loan modification industry that is not being handled by the legislators across the US.
Here is what happened with Chase. You were given a trial modification of $2,852.00 per month for 9 months. During that time your mortgage is considered delinquent by $598 each month and this is reported to the credit bureau. This totals $5382 delinquent on your mortgage and Chase may have added interest and penalties to this amount.
The $4,726 payment is not a loan modification it is a repayment plan to bring your mortgage current. At the end of your repayment plan you may still have the original mortgage payment with no modification to a lower payment.
This free help from Chase made your mortgage delinquent and probably destroyed your credit, an all to common occurrence from Chase and other lenders.
Force Chase To Play By The Rules
You did not say you had an FHA or VA Loan so assume you do not.
The first thing is find out if your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac:Freddie MacFannie Mae
If you have an FHA or VA loan you most likely would know that information but if you are not sure the easiest way to find out is ask your lender by calling the number on your mortgage
- Fannie Mae Loans
- Freddie Mac Loans
- For Non-Government Owned or Guaranteed Loans
- For an FHA-insured loan contact FHA's National Servicing Center
- For a VA-insured loan
If you do qualify for a HAMP Loan Modification this will dramatically increase your chances of forcing your lender to make a real loan modification. Since you made all your Trial Modification Payments for 9 months you most likely do qualify for a HAMP loan modification.
Send The Loan Modification Agreement Back
Unsigned With A Counter Offer
Do not sign the Loan Modification Agreement that Chase sent you. Send back a copy of that agreement, write on the copy "Repayment plan declined - Please see attached counter offer of a loan modification". Include a cover letter that declines the Repayment plan and includes your counter offer for a loan modification.
Make the counter offer that instead of a repayment plan the delinquent amount is added to the end of the mortgage to bring your mortgage current and all interest and penalty charges are
If you qualify for the HAMP Loan Modification ask that your total monthly mortgage payment (includes monthly Home Owner's Insurance payment, property tax payment and Home Owners Association fee payment if applicable) be lowered to 31% of your gross monthly income.
Ask that the interest rate on your mortgage be reduced to 2% (if a higher interest rate actually reduces your monthly payment to 31% of your gross income you can put that interest rate down).
You can ask for a larger reduction than the HAMP guidelines but most likely Chase will not go lower than 31% of your gross income. Chase can approve going lower than 31% of your gross income and have in the past but they may not.
If you do not qualify for the HAMP Guidelines then just ask for a payment that you can easily afford and make that your target payment amount.
I am including a Net Present Value - NPV Test
(as a spreadsheet) so you can play with the numbers to come up with a counter offer that Chase will approve. You can change several of the mortgage terms to reach an affordable payment.
See the article How Does Loan Modification Work?Part1
for ideas of how you can modify the terms to reach an affordable payment.
Use this NPV Test
to work out a counter offer that will pass the test and stands a chance it can be negotiated with Chase.
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Worried If Your Lender Will Modify?
Run Loan Modification Test - See All Loss Mitigation Options. Prove your lender will make more money by modifying
No-Upfront Fee Modification (CA, OR & WA)
No fee to start and no fee if your loan is not modified
Don't know where to start? Negotiate a better modification
Challenge The Notary
Force your lender to modify or just stay in your home as long as possible.
Repair Credit After Modification, Foreclosure or Bankruptcy?
Credit repair software. Remove negative items even after loan modification, foreclosure, bankruptcy