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Various Ways To Modify
A Loan to Stay Current
Bob Pilcowitz
Columnist
I
s there really hope for homeowners?
With the recession still plaguing
the economy and more than a quar-
ter of all homeowners underwater, is
there any way out?
First, the government agencies Fannie
Mae and Freddie Mac provide options
that allow homeowners who are current
on their mortgages to refinance up to
125 percent of the loan value. While you
can try your loan servicer, these loans
are expensive and difficult to close; and
lenders who do not act as your servicer
simply cannot close these loans. Call
your loan servicer or even your local
lender; but be aware of how difficult this
is.
Second, the government agency
Federal Housing Administration pro-
vides a short refinance. Homeowners
may be eligible if they live in their
house, are current on their mortgage
and are currently in a non-FHA loan.
The homeowners' banks must agree to
write off 10 percent of the principal bal-
ance of the loan.
While some lenders offer these loans,
most FHA lenders are afraid to originate
these loans because they have a higher
default rate. Again, while some lenders
will make these loans, the product is not
as easy to get as the government would
lead you to believe and there is limited
incentive for a noteholder to take a short
payoff.
Third, you have a do-it-yourself plan
as an option. It means you take money
to the table in order to refinance your
DETROIT
JEWISH NEWS
loan to get a lower rate. This is an option
that few people can afford; those that
can should think very carefully before
investing in their home if it is underwa-
ter and may depreciate further.
Without advice of counsel, never use
retirement savings (IRA, a profit-sharing
plan, 401K savings or 403B savings) to
pay down your mortgage or even make a
loan payment if you are delinquent.
Today, the government purchases
more than 90 percent of all mortgages
in the market. HAMP, the home afford-
able modification program, has been
considered a failure by the Government
Accounting Office in achieving its goal
of modifying and assisting millions of
homeowners. The number of permanent
loan modifications is approximately
467,000, less than 10 percent of the 5-6
million families that the government
planned to assist in 2009.
The Jewish Housing Association
(JHA) believes the lack of understanding
by the government as to how to incentiv-
ize the private sector to utilize these pro-
grams is prolonging the housing crisis.
While we will continue to utilize these
programs for the benefit of our Jewish
community, the damage to the housing
market from the uncertainty and incom-
petence of government housing assis-
tance programs is unmistakable.
Nevertheless, JHA is here to help
you navigate these programs. We have
achieved more than 125 loan modifi-
cations and met with more than 500
families. If you have not met with us yet,
feel free to call us at (800) 458-0404 for a
confidential and private meeting. Li
Bob Pilcowitz is chairman of board of the
Jewish Housing Association of Metropolitan
JN
Read his latest blog,
My Purim Adventures
about how a change in
plans resulted in a
memorable holiday at:
http://thejewishnews.
com/community
Levi Stein blogs about his
thoughts, events, international
travels and experiences.
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The Jewish
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