Making Home Affordable Program- your thoughts?

[BungalowMo]

---

@daisyduke wrote:

Hi Mo - I asked straight out if she had to default on her mortgage in order to qualify and she told me that wasn't the case.  You see, normally, I'm a pretty nice person, but she is so darn insulting (at times I don't think she even realizes the negative comments that she makes) so I just had to ask.  Because I told her that is what I thought exactly - that you had to be in default to qualify. 

There are probably people that have been laid off, good honest, tax paying citizens that are living BELOW their means to in order make their mortgage payment. She gets approved, it takes away from the truly needy people who would benefit from the governments help.

I know......that is just disgusting that she's spending like there's no tomorrow...then tomorrow, stand in the line for assistance in her oldest pair of Gucci pumps with her KL bag!   81+c#  

Her behavior is appalling - like being on that food stamp program and checking out with Filet Mignon and cavier from Whole Foods.

Oh and I have NOT figured out yet how the Make Home Affordable program affect credit. The co worker did seem to think it would have a negative impact however,but I cannot confirm or deny. Remember, she also said that you don't have to be in default with your mortgage lender (and I don't believe this).

Coworker also said she is tired of living pay check to paycheck, well sweetheart, maybe if you got your compulsive shopping habits in check, you wouldn't have to live pay check to paycheck. No one wants to live pay check to pay check anyway. Ever meet a person who told you that they love living pay check to pay check? 

---

Yeah.......WWWWAAAAAAAAAA...Cry me a river honey!!! 

Makes you wish you could report them for fraud annonymously

I still might have to get some info on that for myself.  I'll report back on the issue if being late on payments or no.

[Lel]

Some quick answers here:  No, you do not have to be in default or late on your mortgage to get a Home Affordable Modification.  And yes, a modification can negatively affect your credit, if the lender reports the borrower as "paying under a partial or modified payment agreement" during the trial period.  This has dropped credit scores by as much as 100 points or more.  In theory (but I'm not sure if this is the case in practice), once the modification is made permanent then the negative impact should go away, because of the way the modified mortgage is supposed to be identified.

The Making Home Affordable plan was created with good intentions, and the guidelines were written in such a way as to minimize the chances that it would be used by so-called "undeserving" individuals.  For example, the program applies to primary residences only, not to investment properties.  Originally, it could only be used to modify first-position mortgages (not second liens), presumably because the government didn't want to bail out people who continually dipped into their home's equity to fund frivolous purchases.  This latter restriction was eased, however, because it was clear that many people took out 80/20 or 80/10/10 loans that were now unaffordable.  If a borrower's debt burden to above a certain threshold (regardless of cause - CC debt, loss of income, etc), they have to enter HUD-approved debt counseling.

It's not a perfect program by any stretch, and it's far from being as efficient as hoped.  And yes, there will be some people who benefit from the program who maybe don't really deserve it.  There's also the nagging statistic that over half of the borrowers who receive modifications are in default again within 6 months (though this is based on data generated before MHA).  But if it can help some hardworking families who have suffered under the current economic conditions, and if it can prevent some homes from going into foreclosure (which exerts negative pressure on home values in the entire neighborhood), then the program is not all bad.

Just my opinion.

[Anonymous]

---

@Lel wrote:

if it can prevent some homes from going into foreclosure (which exerts negative pressure on home values in the entire neighborhood)

---

And what's wrong with foreclosure? Mr. Potter has plenty of rooms for rent.

[daisyduke]

Lel, you wrote:

For example, the program applies to primary residences only, not to investment properties. - Well, the girl doesn't live at that property anymore (for the last six months) but rents it out and told me that the renter covers the mortgage completely. She lives with her fiance in a really nice part of of the city.  Would that still be considered "primary residence"?  hmmmm - i don't think it is. 

I got my answer as to eligibility by going to the website and completing all answers and using "no" for primary residence: this is the answer

YOU ARE NOT ELIGIBLE FOR A HOME AFFORDABLE Modification

Message Edited by daisyduke on 03-04-2010 02:26 PM

Message Edited by daisyduke on 03-04-2010 02:27 PM

[SCF]

Then she's committing fraud and it's very unfortunate that she's getting away with it.  Hopefully, at some point, there will be some kind of verification process that she has to go through (maybe during a check-up or whatever) that will catch her, but until then, folks like us just get to be frustrated that sometimes criminals get away with it, which sucks, but is a part of life.

It's still not enough for me to condemn the program.

Message Edited by SCF on 03-04-2010 12:42 PM

[daisyduke]

SCF - I'm not condeming the program at all. I have no issues with the well deserved folks getting a little bit of help.

Just have an issue with this particular applicant. 

[demi]

I wonder what process she actually has to go thru....if she has to show proof of residency (like utility bills) she may be sol.  My guess is she will probalby get caught at some point.  For every scammer there are probably 50-100 honest ones out there (hopefully)...sad.

[daisyduke]

Demi, I have to wonder as well, about the verification process. I remember getting a mortgage right after I got married and I remember providing BANK STATEMENTS (do lenders still require bank statements??) so if she is depositing her rental check in her bank account and they are looking at bank statements, someone will pick up on it. I got a feeling that the check is going right to the fiance however and probably into his account. Her fiance is an attorney afterall....

The trail that she left is that she changed her address at work to the boyfriends address, which means that our company gave her the tax information using that address, not the address which should be her primary residence. 

 I do believe in karma and she will get hers someday - maybe it won't happen right away, but it probably will happen. If she keeps committing fraud and not managing her finances very well, she will be in a heap of trouble. 

[demi]

You are right, I totally believe in Karma.  I am sooooo honest, I tell people when they have given me back too much change, will argue with them about it!

Hopefully, whoever is renting it is getting it at a good price, at least then someone besides her is being helped in all of this. 

It will, sooner or later, come back to bite.

[Watchmann]

Governments almost always distort and gum up the works when they try to 'do good' with programs like this.  They should let the markets clear on their own, and that means some people will lose their homes.  Housing has to find it's proper level, and if the Government is in there artifically supporting things it only prolongs the correction process.  In the long run the tax deductibility of interest and taxes should be eliminated as well.  This will lower the prices of houses and make everything more affordable.  There is no reason a homeowner should get a free ride from the Government to own a home.  Of course that will never happen as too many special interests (mostly the real estate industry) have their finger in the pie.