- Successful mortgage modification depends on your lender's policies and luck.
- A mortgage servicer is under no obligation to modify a mortgage.
- Review the FHA short refinance plan.
What can I do to get a Chase mortgage modification?
We have been working W/Chase for over 6 months on debt forgiveness and as of today no success. Do we have any other options or avenues that we can pursue? We are not late on the mortgage just we owe $100K more than what the home is worth. After reading I went through proper steps but need to find out what else I can do to get the process to work for us.
The wording in your question is a bit ambiguous. I could interpret your question to mean you have a $100,000 unsecured debt with Chase, perhaps a credit card, that you want to resolve. However, I will assume your question is, "Our house’s market value is worth $100,000 less than the balance of our Chase mortgage. Negotiations with Chase over the last six months have gone nowhere. What can we do?"
You do not mention if you are in financial distress. If so, then your chances of Chase modifying your mortgage will depend on luck and the numbers you submit in your modification application. I write luck because the mortgage modification process is not transparent, subject to the whims of the mortgage servicers, and whether the mortgage servicer loses all or part of your application. You may think that last sentence is cynical. I wish it were. There are countless media reports of the mortgage servicers asking applicants to resubmit the same forms repeatedly, applications being lost, and applicants who receive denials and then take their cases to the media, and subsequently have their applications approved.
If you are not in financial distress, then I see your chances of Chase modifying your mortgage as nil.
Mortgage Modification Defined
The U.S. Department of Housing and Urban Development offers a succinct definition of mortgage loan modification: "A loan modification is a permanent change in one or more of the terms of a mortgagor’s loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford." A homeowner undergoes a loan modification because they experience some sort of financial distress.
Some home loan modifications today are completed according to the rules set by the Obama Administration’s Home Affordable Modification Program (HAMP). This is a voluntary program, and there is no requirement that a loan servicer (the bank holding the mortgage in question) participate in HAMP. However, if the loan servicer received TARP money, it must participate in HAMP.
As implied by the definition of a home loan modification, all parties to a loan modification do so voluntarily. A homeowner qualifies for a loan modification according to the value of the loan in proportion to the fair market value of the property, the homeowner’s debt-to-income ratio, credit history, and the loan servicer’s criteria. A loan modification is not a refinance, does not add or remove a party from the contract, or allow the homeowner to remove equity from the property in the form of cash.
Home loan modification is great in theory, but to date the loan servicers have modified a relatively tiny number of loans that qualify for modification under HAMP. However, a loan modification has several advantages for the consumer and loan servicer. First, although the home loan modification process is unpredictable in terms of timing and outcome, it is rare for a consumer in the midst of a loan modification negotiation to be foreclosed upon. Note my word choice. Bills.com readers have reported some loan servicers demonstrate uncoordinated behavior in this regard. Second, a loan modification in and of itself will have no impact on a consumer’s credit score.
Recommendation
What reasons has Chase offered when declining your application for a mortgage modification? If you are not in financial distress, then Chase is not under any obligation to modify the mortgage.
You may qualify for the FHA Short Refinance,an ambitious and attractive program for consumers, but one that has not been embraced widely by mortgage servicers and investors.
I hope this information helps you Find. Learn & Save.
Best,
Bill