Mortgage Forum

Mike

Hi All, I would like to share my experience with those of you who are working with Homecomings Financial, but the process and experiences may be similar with other lenders. While everyone's situation is different, I am hoping that our experience will encourage others in their efforts. We had taken out an interest only loan (500K at 8.3% fixed for 24 months) on 02/2005. We had maxed out all of our lines of credit to complete renovations and when we went to refinance, HF was our only option at the time. Our intent, as with many here at the forum, was to get into this program, try to reduce our debts and refinance within the 2 year period back into a conventional program. With declining values and tighter lending policies we were faced with the realization that unless we worked NOW to freeze our existing rate we would certainly face the possibility of losing our home. Our rate was set to adjust on 4/1/2007 to 9.8% for six months and then it was set to adjust again to a higher rate, and to include principal. In a nutshell, here is our experience with the process: We had been late on our previous 12 months payments but never over 30 days. Certainly on a treadmill just able to make payments at the end of the month to keep us from going over 30 days late. I contacted HF after a payment, when we were current. I contacted the loss mitigation dept on 2/6and spoke with a representative which took our information for the "workout package". I did not fill out any forms and did not have to provide any current financials or debt liability reports. After the interview, I was told that I am $90 per month in the positive and that an increase would put us in the red. I was told that I would have an approval decision within 72 hours. I followed up the next day to confirm the application was in process, and while there was no case number, and no other contacts available, I was told that is was in process but it could take 30-60 days for a decision. On a later follow up call I was told that the decision was pending an exterior appraisal. This made us nervous as we were concerned that if the appraisal came back positive, they may decide to not modify the loan as they may feel they would not have a problem moving the house if we were to become delinquent. I received a verbal approval on 2/27 that it was approved, but I would have to send a payment by certified check or Western Union by 3/7 and return the paperwork. I sent the payment by Western Union on 3/7 and just signed our paperwork with a Notary that came to the house. Essentially, we were able to freeze our rate at 8.3% for 36 months (interest only), after 36 months we will also need to pay principle but our rate will remain frozen through 2013. All things considered we were happy with the results in lieu of what we could have faced if we did not go through the process. What is not listed here is the 18 follow up calls throughout the month and the 45 minute average wait times on hold. I believe the bottom line here is that "pleasant" persistance is necessary. Depending on when you call, and who you get on the other line, can be frustrating. If you call enough, you may be fortunate to speak with some decent reps who "have a clue". I am sure there were other factors involved but do not lose hope and be persistant throughout the entire process. Another factor that may have helped was that we fell into that sliver of applicants who were within $100 of the "acceptable range" that has been discussed. Anyway, I have visited this forum on may occasions for "encouragement" from the outside, and wanted to share our experience in hopes of encouraging others. If there are more details or questions that I can help answer I will do my best to keep checking and offer whatever I can. Regards - nepatsfan247