Upside Down Mortgage

Mortgage Modification Program Obama

Question: What is mortgage modification? Do I qualify?

My husband and I are current with our payments but, I recently lost my job. I am scared I am not going to find a job anytime soon and we will be in a bad situation. I have heard that all of the Obama programs are for people that are already late on payments or in pre foreclosure. I am not willing to blemish my credit report in order to qualify. Am I qualified for the modification and how exactly will it help me?

Thank you!!

Answer: You best bet is to call the bank NOW. A mortgage modification is where they rework your mortgage without refinancing you. If you claim financial hardship, they may slide you 2 months and tack them on to the end of your term. Hopefully a rate reduction would apply for you.

But here is where it gets tricky. You need to call them immediately before you are late on any payments. Especially if you have credit cards issued from the bank that holds your mortgage.

A slick practice that credit card companies are doing now is when a customer calls up and asks to lower their rate, the credit card company pulls their credit report. If they are late on ANY of their payments, not just to the bank you are talking to, but late on any creditors, they can legally raise your rate. So horror stories have these rates jumping up to 23%

For instance, you call bank A about your mortgage, with whom you also have a credit card. They pull you credit report, and find you have a couple of 30 day lates, they can raise your credit card rate. Then when bank B, another credit card holder, periodically pulls your credit and they see the lates, plus a rate increase by bank A, then they in turn raise your rate there as well.

This can snowball very quickly. They do this because credit cards are unsecured debt and this is their only recourse. So even if they modify your mortgagem they may still be able to get more money out of you thropugh other ways. Also, a loan modification can only be doen once. After that you would have to refinance.

Obama New Rescue Plan, Saving Over 9 million Homeowners. (Modification Program)

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