Mortgage News: New Foreclosure Time Frames

by Greg from San Marcos, California

Ask Kate for mortgage news regarding recent increase to foreclosure time frames: Greg asks what mortgage assistance is available to him while he's unemployed. But first let's take a peek at the September 2015 announcements by Fannie Mae and Freddie Mac. Seems the mortgage giants are increasing the allowable number of days for foreclosure proceedings in 33 states.



Oregon is the biggest winner, receiving a whopping 480 day increase to the time allotted between the due date of the last mortgage payment and the foreclosure sale. Keep in mind, circumstances such as probate, trial modification periods, and bankruptcies can also delay foreclosure.

I bring this up to remind struggling homeowners that there may be more time than they think to fight to save their homes.
To view your state's time frame, go to Fannie Mae Foreclosure Time Frames and Allowable Delays.
Now let's move on to Greg's story, an unemployed homeowner from San Marcos, California who is frustrated while seeking mortgage assistance.

Ask Kate: Loan Modification Mortgage Assistance for Unemployed

By Greg from San Marcos, California
Loan Modification Mortgage Assistance for Unemployed

Hello Kate:

Thank you in advance for addressing my issues.

I have a first mortgage with North Island Credit Union in San Diego with a balance of $244,000.00 and a second mortgage with Wells Fargo with a balance of $105,000.00.

My first mortgage is a 30 year fixed and my second is on a 15 year fixed at 10.365% with 7 years left to pay on it. My home is worth $400,000-415,000.

I applied with Wells Fargo for a loan modification in February this year while I had difficulty paying my mortgage and had to stop paying the second. It took them until June to decline my modification request and their reason was that we do not make enough money. They admitted that they only used 75% of my wife's income to support this statement. (My wife is not on either of the mortgages.)

I have been unemployed since the beginning of 2014. We went through all of our savings to pay everything and ran out of money in February of this year. So last week I finally contacted North Island Credit Union to ask for help. They could not believe that Wells declined us.

Any ideas? Thank you very much! Greg

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Kate's Answer: Loan Modification Mortgage Assistance for Unemployed

Hi Greg,

When the lender of a 2nd mortgage does not own the 1st mortgage, they are often reluctant to get involved in modifications.

But it sounds like the credit union (for the 1st mortgage) is sympathetic. This is all good and well except there's still an elephant in the room, your unemployment.

Ask Mortgage Company About Modification Qualifications

If the credit union also declines your request due to lack of a job (aka, too little income or an excessive debt load), don't just walk away. Ask how much additional income you need to qualify for a modification.

Perhaps if you got a job, even if it doesn't pay as much as the one you lost in 2014, you could get a lower house payment while you continue to look for a more suitable job.

Keep in mind, many lenders require a new job to be in a similar field with a stable pay structure. This is another discussion to have with your credit union.
The approval process can be downright tricky! Learn How to Cure Mortgage Approval Hiccups.

Home Affordable Unemployment Program (UP)

You can also look into Making Home Affordable's unemployment program, UP, assuming your credit union participates. It can benefit you by reducing your house payment to no more than 31 percent of your gross income or sometimes even suspending it up to 12 months while your job search continues.

By the way, ask the credit union about your wife's status as a non-borrower and what steps you can possibly take to qualify with 100% of her income.
Read more about the assistance at UP Mortgage Forbearance for Unemployed Homeowners.
Additionally, because you live in California, you will want to read my news coverage... California Owes Millions to Struggling Homeowners.

Best wishes,

Ask Kate

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