Can Home Save help me?

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  • #33346
    calstrs8017
    Member

    I have a mortgage originated in 2011 through the CalSTRS 80/17 loan program. The servicer is Bank of America.

    The CalSTRS 80/17 program actually created two mortgages. The first mortgage was for 80% LTV on a 30 year fixed 4.5%. The second mortgage was unconventional: it was for 17% LTV, was deferred for the first 5 years, with repayment starting at the end of 5 years, with the remaining 25 year fixed 4.5%. The combined principal of the first and second mortgages is around $480,000. The house is in Los Angeles County.

    Now that the second mortgage payments are beginning, I cannot afford the combined payments of both the first and second mortgages, which exceed 31% of my gross income. I don’t qualify for HAMP since the mortgage originated after 2009. I don’t qualify for conventional refinancing because my bankruptcy chapter 7 was discharged 2 years ago. FHA refinancing doesn’t help because it will not get a better interest rate than the current 4.5%. Do you think Home Save can help get me a loan modification? Thanks.

    #33348
    TTrumble
    Member

    Hello calstrs8017,

    As with any Home Save file, all I can say for sure is that we can try. The CalSTRS (California State Teachers Retirement System) 80/17 loan program is both a benefit for its members and an investment vehicle for the members’ retirement fund. As the investor for the mortgage, CalSTRS will have unique guidelines on what it will and will not do to modify the mortgages it owns.

    Most investors will not modify a loan until it is at least 60 days past due unless one of the “Four D’s” of Imminent Default can be proven: Death, Divorce, Disability or Disaster. However, with the unique circumstances behind their mortgages, CalSTRS may have its own modification criteria for its members. (Which raises the question, have you tried to contact CalSTRS or their servicer, Mountain West Financial, to see if they have any internal modification programs?)

    In any event, we will certainly be willing to work with you on creating a modification proposal and submitting it to CalSTRS through Mountain West Financial (as would be required).

    To get started, please go to our website, click on the Home Save tab, and set up your NACA file. Submit the required documents and then call our Home Save department at 281-968-6222 to set a telephone counseling appointment.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #33353
    calstrs8017
    Member

    Hi Tim,

    Thank you for your reply.

    I didn’t know if NACA could help since I don’t qualify for HAMP, and I’m glad NACA can try.

    I have not contacted CalSTRS or Bank of America regarding internal modification programs. I thought it might be better for NACA to try to negotiate with Bank of America since NACA and Bank of America have an existing working relationship.

    All my monthly statements have come from Bank of America since 2011, and I have never had any letters or communication from Mountain West Financial. The CalSTRS 80/17 program was discontinued in 2011 and that’s when Bank of America stopped originating any CalSTRS loans. I believe Mountain West Financial was planning to originate CalSTRS loans in 2012, though it never happened and my loan was never transferred to them for servicing.

    I have never been late on my mortgage payments. However, that will probably change with this second mortgage payment.

    #33379
    calstrs8017
    Member

    I was wondering what timelines look like. (eg 1 month, 6 months, 12 months)

    After I upload the documents and call Home Save department, how long should I expect before the package is sent to the servicer?

    After the servicer receives the package, how long should I expect before acceptance or denial?

    I looked up the investor and servicer at https://www.mers-servicerid.org . Servicer for both is Bank of America. Investor of 1st is Fannie. Investor of 2nd is California State Teachers’ Retirement System.

    #33400
    TTrumble
    Member

    Hello calstrs8017,

    Thanks for the update and clarification. You will need to speak with a Home save Counselor, but based on this new information, you are going to have an uphill battle getting a modification right now.

    Since the investor on the primary mortgage is Fannie Mae, the rule about being 60 days late will apply unless you meet the guidelines for Imminent Default as I wrote previously. The primary mortgage must be modified before any modification to the second can even be considered, so at this point CalSTRS may well be irrelevant. There is the possibility that both can be modified simultaneously since they are with the same servicer, but you are going to run into that 60-day Fannie Mae delinquency requirement.

    All that having been written, you need to proceed with creating and submitting a proposal for modification. If we know that it’s likely to be a battle, then we need to get the battle started NOW. It’s like Michael Jordan said, “You are guaranteed to miss 100% of that shots you don’t take”.

    Be prepared for a fight, but the sooner you start, the better.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

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