December 30, 2017 at 5:41 pm #39811
My Sister-in-Law and her Husband have an FHA Mortgage that they have already restructured with their Lender once a few years ago. They both lost their jobs 6 months ago and are significantly behind. He is back working but struggling to get caught up and she is still looking for work. They have applied for another restructuring with the Lender but are unsure of whether or not the Lender will continue to work with them.
According to him, the Lender gave them one option that they were unable to commit to due to a significant up front cost.
My wife and I suggested that they call Naca Home Save to see if they can help.
He said that he was told that they could not for two reasons, one of them being because it was an FHA Loan. He could not recall the other reason.
Does this sound accurate? Naca is unable to assist because they have an FHA Loan? Is it possible he thought Naca could refinance? I know Naca doesn’t do refinancing.
Thank you for any assistance you can provide.January 3, 2018 at 5:56 pm #39837
I really don’t have enough information from what you have shared here to give you a definitive answer. What I can tell you is that FHA is quite strict with regard to modifications. They have a hard and fast rule that you may not get more than two modifications during the life of the loan.
Also, FHA will only reduce the interest rate to the current market rate on the day the modification is granted. It’s entirely possible they may already be at a lower rate than they could receive through a modification. Likewise, if they were both unemployed, a modification would have been impossible, since there was no stable source of income to base a modification on to begin with.
Additionally, if they received any sort of principal deferral during the last modification, such as putting any past due payments at the back of the loan, that will not happen a second time. In short, it’s possible that their current terms may be better than they could get with another modification.
As much as I hate to say it, if a NACA Home Save rep looked at the situation and indicated there was nothing we could do, it pretty strongly suggests that at least for the time being, it’s an unworkable situation for one reason or another. We subscribe to the notion that you should Never Relent as one of our four core values at NACA. Having no options is completely alien territory for us, which makes me think that if there’s nothing we can do, that means for the time being and not necessarily permanently.
This is only conjecture, but based on my experience starting with NACA as a Home Save Counselor at the peak of the mortgage crisis, I can tell you that FHA loans are a tough nut to crack quite often. Once they are both back to work, they should definitely try again though and keep trying as long as they still have the keys to the house.
Online Operations, NACA
email@example.comJanuary 4, 2018 at 3:21 pm #39847
Thank you for the response. Is it theoretically possible that NACA may be able to force the Lender to give them more affordable repayment terms like a forbearance or not require a $2000 upfront to put them a repayment plan?January 6, 2018 at 10:02 am #39863
That’s really a little too case-specific for me to address with any sort of confidence, especially since there has already been one modification. All I can say is you never know until you try.
Online Operations, NACA
- This reply was modified 3 months, 2 weeks ago by TTrumble.
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