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lucky13 womanI have been too busy to update my blog in many, many moons. I feel badly about that, but allow me now to remedy that, because today was a huge landmark day–indeed an awesome day–in the story of my life.

Back in October of 2012, my mortgage servicer Homeward Residential basically entrapped me with the Home Affordable Unemployed Program (HAUP) forebearance program.  I managed to pay my full original mortgage amount within the grace period during the first month of this federal program, to save my credit from being dinged. But Homeward rejected my check because “my loan was in a special status.” I paid it again immediately and wrote to them explaining that I had paid on time, but they had rejected my check, so in the future, they must stop rejecting my full mortgage payment if I’m able to make it. I was told before accepting the HAUP terms that I could pay as much as I wanted every month. I requested that they credit me the $36.60 late fee.

I received a letter in the mail merely reiterating back to me the situation I had already spelled out, without any mention of accepting my checks in the future or crediting me the late fee. Just…no help at all. Apparently, once I had accepted HAUP, I had signed up for full-scale destruction of my excellent credit, monthly late fees, and more! The absolute worst part? The twice-weekly collection calls from “robo-callers” denigrating me in Indian accents with insults about how “I entered an agreement when I obtained a mortgage” and “this is an attempt to collect a debt.” I couldn’t screen these robo-calls because I had canceled the $10/month Caller ID service on my phone to cut back on expenses. Every time I answered the phone, I spent twenty minutes confirming my personal identification, and explaining where in their system the robo-caller would see that I’m on a federal program called HAUP, and no, I don’t actually owe them money and would they please stop calling me!? (No, they wouldn’t stop, they informed me, “until I came current on the loan.”)

I put aside as much money as I could every month over the next six months to enable repayment of the $8400 that Homeward estimated I would have to pay at the end of the six-month forbearance program. Mostly I just paid down my debt, knowing I could tap it again to save my home if I had to. And I tried to avoid answering the phone.

“One and a half more years,” I told myself, until my son graduated from his high school and I could move somewhere warmer and less expensive.

Six Months of Hating HAUP

Here’s what happened next and over the next six months:

  • The “late payment” subsequently appeared on my credit, as it did every month, even though I pre-paid the $5/month set forth in my payment agreement. This brought my FICO score from a 793/850 (excellent) to a low of 632 in December 2012 (not good). But I expected this.
  • To add insult to injury, Homeward socked me with “collection fees” to pay for the privilege of being harassed.
  • Homeward added $500 in fees for “property inspections” that never occurred, and late charges.
  • Instead of $8400 at the end of the program in April 2013, Homeward claimed “Past Due Amounts DUE IMMEDIATELY” of $10,800. The statement added up. It seemed correct. The mistake seemed to be in their earlier estimation of what I would owe at the end of the HAUP period. Oh, they were just kidding! I owed much more!
  • Near the end of the six-month HAUP forebearance plan, Homeward Residential sold my mortgage to another mortgage servicer, which effectively eliminated any option to dispute the charges.
  • My unemployment benefits ended unexpectedly when Congress shortened the federal extension Tier. Without proof of “unemployment benefits”, I didn’t qualify for an extension of the HAUP program.

This was all horrible, no good, very bad news.

The Good News

  • The good news is, I found more work. Here’s the meat of the matter: Because my unemployment benefits were so low (based on a two-month stint of employment in 2010), I never stopped for a minute looking for a job, and selling my stuff on eBay, and looking for ways to get by. I didn’t find a full-time salaried position with benefits that would replace more than about 50% of my pre-recession income. What I did find was more freelance work. Gradually over the past 1.5 years, the infrequent science-and-technology writing and editing assignments grew into a bit of regular recurring contract work, and those contracts grew into recommendations for more work, which grew to another contract, and now I’m hopefully negotiating another.
  • Over several months while the new mortgage servicer, OCWEN, reviewed all their new mortgages, my inflated Past Due Amount grew, but only by my original monthly mortgage amount. OCWEN respected the intent of the HAUP program even though it had technically expired. They did not begin foreclosure proceedings. Collection calls stopped.
  • OCWEN informed me that without unemployment benefits, I couldn’t continue in the HAUP program. They would consider me for the Home Affordable Modification Program (HAMP), they said, but I was wary. I’d been rejected four times in that program for insufficient income.

Nevertheless, I applied in March 2013 for HAMP. AGAIN. Sometime in April, an OCWEN rep told me, “You don’t qualify for HAMP. You make too much money.” I almost spit at him, “I knew it!” until the second part of that sentence kicked in. “Wait. What? I make too much?”

“Yes,” he said apologetically. “But you may qualify for in-house refinancing.”

Sure enough, at the end of May, I qualified based on my income (a self-reported “Profit and Loss” spreadsheet for three pretty-atypical but good-looking months) for a new mortgage with OCWEN. They rolled all that extra nonsense money I owed (grr…which I had no power to dispute) into a new mortgage, with no closing costs or money down. Sure, the new mortgage came with an annual percentage interest rate 1/2% higher than it used to be, and my monthly payment increased by about $100, but it’s better than foreclosure. I looked into other mortgages, but other banks required $8000 down, and here was my chance to maybe catch up! NO MONEY DOWN!

And yesterday, I signed the agreement, and requested that my bank wire my first payment on the new mortgage.

Today, OCWEN told me I’m all set. They have received my agreement, the wire has been received, and I can pretend none of this ever happened.

More good news:

  • My credit score started upward again in April when OCWEN bought my mortgage and stopped reporting me as delinquent. The rest of my loans and credit cards are in great shape, of course, so that helps. I’ve been told by a used-car dealer friend that even at its lowest point, my credit score would have still been too high to justify the type of buy-here/pay-here loan his lot offered. Surprisingly, as my credit dived, I began to receive more daily credit-card offers in the mail than ever! The credit card companies love to give money to people to whom they can charge interest and late fees!
  • My debt is paid down. I still don’t have much if any disposable income to speak of, but I believe I can keep my house until my son graduates high school in … less than a year! My mantra has become “Less than a Year! Less than a Year!”

The best news of all is something my friends and family already know. I now have a special someone in my life, besides my son and my great support network of family and friends. I met this “someone wonderful” years ago around town when he was unavailable. About a year ago, I saw him out and about and he was, luckily for me, available. And interested! While he has some means to have possibly “saved me” or at least helped me in unhealthy rescuer fashion, setting us up for rocky interdependence, I said no. I *do* let him pay for “dates” where ever we go, and travel, which he loves (and who doesn’t!?), but as much as he is generous, I am convinced that my happy ending depends on *me* saving *myself.* I believe in Cinderella being a co-ruler with the Handsome Prince, not another dependent on his tax return. We’ve been very happy, had a lot of fun, and have many more fun things planned together. Including moving someplace warmer and cheaper. Together.

But that’s a whole ‘nother blog.

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No help, no hope from HAUP.

In my last post, I described how I was hanging on by a very thin, frayed thread to my excellent credit score and barely able to pay my mortgage during my period of un*employment (a term I coined to represent a combination of unemployment and underemployment). Since February 2010, I have been working to stay in my home. In the first attempt, I applied directly with my mortgage holder for a mortgage modification, which was denied for lack of stable income. Next, I moved on to working with government financial advisors and/or directly with my mortgage holder to apply for the Home Affordable Mortgage Program (HAMP) and the Home Affordable Unemployed Program (HAUP): I was denied four times for various reasons.

Pile of paper

HAUP gives hope to the mortgage company, but otherwise has wasted my time and a lot of paper.

I figure it’s my duty to other Americans in similar straits to relate how HAUP works. I couldn’t find much about it online except eligibility guidelines and how to apply. Here’s what you should know about how the program works — or doesn’t, in my case.

I started my fifth application process in July 2012. After supplying them with reams of paperwork proving my lack of income, dozens of calls back and forth, and dozens of form letters in response, I finally got the letter accepting my HAUP application in the mail today! The letter was from my mortgage servicer, Homeward Residential, previously American Home Mortgage–a simple name change facilitated the shedding of their bad image as a recipient of American tax dollars as bail-out money. The letter said Homeward approved a forbearance plan through HAUP. This means that they are willing to postpone or forbear from initiating any foreclosure proceedings for (in my case) six months (the minimum term is three months), and that my new monthly payments will be reduced to $5/mo for six months.

“YAY!” I said in my kitchen to myself. “FINALLY! YAY!”

But then I read the terms of the three-page letter. This is how HAUP works: Interest will continue to accrue during the forbearance period. I must continue to pay the taxes, which are in escrow with Homeward. Among the key provisions: the principal and interest that the bank suspends (in my case, for six months) will accrue as an unpaid balance of approximately $8440.77 — which will be due immediately upon the end of the forbearance period. In other words, in six months, I will be in default to the tune of $8440.77, which will be reported monthly as delinquent to any credit reporting agency. This would obviously shred my good credit.

At that time, until any “Default is fully cured and all amounts due and unpaid have been paid, the loan remains delinquent.” The mortgager “may continue to report the loan as delinquent” every month. So even if I pay that balance off eventually, say at the end of my loan term in another 20 years, I will have been “delinquent” for 20 years.

I called my “relationship manager” and she confirmed that not only will the bank call all my deferred payments due after the six-month period, that during that six months, the bank will be reporting me as delinquent, even if I make the $5/mo payment they’ve set up for me.

So, let’s say I get a lovely, high-paying salaried position (just go with me) at the end of the HAUP forbearance period. Anyone who has been un*employed even briefly knows it takes months, even years, to get back on your feet after you start working again. My first priority would be to get back to paying things on time. With any extra (extra?) income, I would need to pay down my home-equity line of credit and stop using my credit cards. I won’t suddenly have enough money to pay a delinquent $8440!

Furthermore, if I can’t pay that $8440 immediately when it’s due after the six-month forbearance period, the agreement says that they’ll be able to start foreclosure proceedings against me.

The letter says that after the forbearance period, the bank will consider me for a modification under HAMP. They do not guarantee that I would be eligible for a modification under HAMP or any other program. As a matter, of fact, we both know I won’t qualify for HAMP. I’ve been rejected four times because my freelance income is too unstable and irregular. HAMP has been a useless program (for me) because if I made enough money to qualify for a modification, I wouldn’t need the program– I’d already be making my mortgage payments on time. If I don’t make enough money, I won’t qualify for the program.

How does any of that make sense? Who does HAUP help? The only person that would be helped is someone who is already in foreclosure; and all it does is buy them six months before they’re in foreclosure again. Thanks but no thanks!

This HAUP program was set up to help unemployed people, but it is clear that HAUP is no help, and doesn’t give homeowners any hope.

It’s hard to say much, if anything, good about HAUP, except to say that for a few people, it may buy them some time while destroying their credit. Perhaps, if they already have terrible credit, HAUP is just the thing. The letter from Homeward does specify one way to skate on the loan, the forbearance plan, and your home–that is, if you can’t make the payments in the forbearance plan, you are off the hook if you obtain a Chapter 7 bankruptcy. Either way, forbearance via HAUP gives you no hope to save your credit score. And it only delays an inevitable foreclosure.

A couple of friends (who have stable jobs) have told me they’ve had success with modification after trying and trying, and not to give up hope. Knowing a couple of people whose persistence paid off has motivated me to apply for modification five times so far. Although I don’t have a steady income that qualifies me for a more useful type of modification, the minute I obtain steady income, I’ll be reapplying for a much more helpful modification plan!

The good news for me is only that Homeward promises not to start foreclosure proceedings on me for six months, as long as I make that $5/mo payment. I’m planning to continue to pay my mortgage in its entirety over the next six months–somehow. But if I can’t make my payments, I’ll pay what I can above the $5, and hopefully get back on track with owing a much smaller amount when the forbearance period ends. Either way, I dread what that will do to my heretofore stellar credit, which I will need if I have to rent an apartment after losing my condo. What a pain!

The other good news is that my son has now begun his junior year in high school. In another two years, I expect he’ll be in college (with help, I hope, from scholarships, grants, and student loans), and I’ll be moving someplace–preferably warmer–where the terrible schools don’t matter.

Wish me luck!

The audacity of my tenacity

Abby Bulldog

I can relate to the bulldog: the definition of tenacity. This is Abby, who I happen to be dogsitting this week. She’s just as loveable as she looks!

Since my layoff from my last full-time salaried-with-benefits position in November 2008, I’ve had the audacity to continue to pay my mortgage, taxes, and condo fees on time, in spite of my inability to do so. How I’ve done it is complicated, and is the subject and motivation of this blog, which best reads from the beggining.

But last month was the first time I was late <***SOB***>. It was horrible to see that invoice from my mortgage servicing company with a late fee of $36.30, which has been tacked on to what I owe, accruing at a low interest rate of 3.375%.

I would have missed the payment entirely if it hadn’t been for “A Friend.” Someone I know (apparently), or at least someone who reads this blog, sent me an anonymous money order drawn on the Bank of America in Billerica (a MA town) for $1000. It was post-marked generically from MA, and was marked from “A Friend.” A friend, indeed! To this saintly person (who I actually suspect is among my atheist friends), I thank you from the bottom on my heart. You bought me time while I wrangle with my mortgage company to qualify for help through the Home Affordable Unemployed Program. The HAMP program was initiated by President Obama to give incentive to mortgage providers to help struggling homeowners stay in their homes.

I call my bank every week, hoping to get all my paperwork in on time, and to receive a modification or a reduced mortgage rate while I’m unemployed / underemployed. But I’ve had no luck.
Here’s what I’ve been through so far:

Mar. 5, 2010: Home-Affordable-Mortgage-Program (HAMP) application DENIED. Reason: “Insufficient income / insufficient collateral.” (No $#!*!)

Aug. 16, 2010: HAMP application DENIED. This time, I got three different responses from my mortgage provider with reasons for rejection. Get this: Reason 1: “Your loan is current / not at risk of default.” (That’s right–they wouldn’t help me because I wasn’t late on my payments.) Reason 2: “Your debt to income ratio is too high.” (You think?? Duh!) Reason 3: “A HAMP modification would have resulted in excessive forbearance.” (Meaning: You can’t afford your crappy 2BR condo so we’d rather just take it from you.)

Oct. 2010: HAMP DENIED again. This time, the reason was a cryptic “Modification is not allowed under current Pooling Servicing Agreements.” After this, I just quit applying. And I worked for six months in 2011, so was able to continue to pay my mortgage.

June 11, 2012: DENIED. AGAIN. Since my last application, the government had added another program category specifically to help unemployed homeowners–the Home Affordable Unemployed Program (HAUP). My application was denied with a reason stating: “You did not provide documentation indicating that you currently receive unemployment benefits in the time period indicated.”

This was particularly frustrating, because I most certainly did provide my benefit determination letter (not to mention bank statements and a pile of other documents). But the mortgage service company identified an error in my lag period (a date range of “01-01-12 to 12-31-11”–an illogical range). Unfortunately, the state of MA says it wasn’t an error. Basically American Home Mortgage Servicing rejected my application because they wouldn’t accept my explanation (that I received from the state) saying a lag period starts with the end of the last quarter of your benefits, and ends with the end of the benefit year you worked in, i.e., I don’t have a lag period.

Around this time, I got the $1000 money order from “A Friend.” So I was able to pay my mortgage, albeit late.

I am now in my FIFTH application process. American Home Mortgage Servicing sold my mortgage (they probably made a solid profit and were ready to get out) to Homeward Residential. My paperwork “appears to be in order.” I’ve heard this before. As in the past, my account is “under review.” Around September 9th, I should have (another) final decision on whether they’ll reduce my payments and refinance my balance at a lower interest rate.

I hope (against hope) that all this effort and the $1000 from “A Friend” weren’t in vain. I try not to dwell on the fear lurking there. I really shouldn’t bother to go there, to my rather substantiated fears that in spite of that ridiculously generous gift, Homeward Residential will again determine that $216/week of unemployment benefits and a bit of freelance income is absolutely not enough for me and my son to afford this small condo, which I could easily afford when I bought it with tens of thousands of dollars of savings and a comfy salary in 2005. I don’t dig very deep into the terror and dread that we will suffer the loss of our home before my son can graduate (two years left!) via short sale or deed-in-lieu, or worse, foreclosure (as happened to my son’s father already. Isn’t one traumatic loss of a home enough for one kid in a lifetime??). I really have the audacity to believe that I will DENY the bank the pleasure of being the recipient of all my savings, all my efforts, all my goodwill, and particularly, all the good and generous donations I’ve received that have helped me stay in my home.

The audacity of my tenacity.

To the bank, I say:

DENIED.

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