Is Chase Just Wasting My Time?
Or Can I Modify My Loan?
by Steven
(Clovis, CA, USA)
I originally sent all requested information to Chase in October 2009. After 5 months of resending paycheck stubs, bank information and re-signing the request for tax information (4 times), my loan modification request was finally assigned to a specific Loss Mitigation Officer in February 2010.
Less than 30 days after I sent the last paycheck stubs and newly re-signed request for tax information, I received another letter from Chase requesting I update the information AGAIN!
My original loan was 100% financing and purchased the home with no money down. The mortgage is not upside down and is a 40 year mortgage at 7.125%.
I am the only person on the loan and I have not lost income, but my wife lost her job. This is all included and explained in my request to Chase for a loan modification.
What can I do to have Chase reduce my principle and reduce my interest rate? Is it unreasonable to ask for them to reduce the principle and interest (to closer to 2%)?
Chase Mortgage Loan Modification Answer:
by Chase Mortgage Loan Modification Expert - Dan North 
This is a stall tactic by Chase and is not uncommon at other lenders as well. Under the current guidelines Chase is required to respond to your original loan modification request within 10 days. Chase could have started your trial modification immediately over the phone, even with out your paperwork being turned in back in October 2009.
Once Chase receives all documents and signed forms they have 30 days to either modify your loan or turn down your request. This is an attempt by Chase to claim your submission is incomplete by repeatedly requesting that you resend documents and information.
That covers what Chase is doing but to answer your questions on what modification you can negotiate we first have to clear up if you are eligible for the HAMP Program.
Even though you are the only one on the mortgage the loss of a second income is grounds for a hardship.
To determine if you qualify for HAMP is your mortgage payment (including insurance and property tax) greater than 31% of your monthly gross income? If so HAMP will apply.
Here Is How You Fight Back To Force Chase
To Play By The Rules
First since you did not state that you have an FHA or VA Loan I will assume that you do not. So the first thing you should do is find out if your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac. If it is Chase does not have a choice in following the HAMP Guidelines.
See if your Mortgage is owned or guaranteed by Freddie MacSee if your Mortgage is owned or guaranteed by Fannie MaeThis will determine which report line you need to use to speed up the loan modification process.
- 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 Chase to make a real loan modification with no more stalling.
Under HAMP the target monthly payment is 31% of your gross monthly income. That target monthly payment is required to cover principal and interest payments as well as property tax and home owner's insurance.
First you interest rate will be reduced to as low as 2%. If that does not lower your mortgage payment to 31% of your gross income Chase will next do a principal forbearance since your loan is already a 40 year mortgage. This is not a principal reduction as you will have to make a balloon payment when you sell or refinance for the full amount of the principal that was deferred, but you will not be paying any interest on the amount of principal that is deferred. The amount of principal deferred will only be what is required to lower your mortgage payment to 31% of your gross income.
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