Will Fannie Mae Allow True Mortgage Modifications

by Carrie from Miami, FL

Ask Kate if Fannie Mae will ever allow true mortgage loan modifications and reductions to principal balances for underwater homes: Meet Carrie. She is a tenacious underwater homeowner struggling to keep her family in their home. Unfortunately, I overlooked Carrie's letter with her harrowing story last month but luckily caught her new correspondence regarding principal reduction alternatives today. More on this in a moment.


Carrie Tells Kate Her Story of Trying to Save the Family Home

Dear Kate: Will Fannie Mae ever allow a true loan modification and principal reductions to underwater mortgage balances? The reason I am reaching out to you is I read your blog and I’m hoping you can assist my family in any way or at the very least point me in the right direction. I would be truly grateful!

Will Fannie Mae Allow True Mortgage Modifications
The reason I am concerned is that our mortgage is over 50% underwater.

We purchased our home from CountryWide in June 2007, I tried several months to get help from CountryWide and we went in huge circles to then find out our loans were bought out by Bank of America.

I lost my job early in 2008 and my husband was unable to support our family on his own. Finally July 2009, I was able to find employment but was way behind on our mortgage etc as you can imagine.

From 2009 – 2011 it was a vicious circle of attempting to get help with a loan modification from BofA, receiving letters of possible foreclosure etc. We would fax and mail the paperwork that Bank of America requested to then call to verify and the bank rep state we have not received anything and we would have to start the process all over again etc etc. (Bank Of America delayed the loan mod 16 months waiting for Fannie Mae approval.)

Finally in mid 2011, BofA sent us modification papers for our loan but added 100k of fees (bank fees, late fees, processing fees, etc) to our original principal amount of $340k, which with the loan modification we now owe $440k on the 1st loan and extended our mortgage from 30 years to longer than 40 years to pay the additional $100k non-interest bearing principal. Plus the bank did not extinguish our HELOC loan which they own and service, stating that since our first loan is Fannie Mae. So by now we owe more than $73k on the HELOC 2nd mortgage.

Between both loans, we now owe over $500K on a home, that has a market assessed value of $186k for the last 3 years. We were told our 2nd mortgage HELOC would be extinguished and that did not happen.

We were told we qualified under HAMP for principal reduction but that did not happen because of Fannie Mae is not participating in this nor the national mortgage settlement, nor any true help for the homeowner.

Instead they (Bank of America and Fannie Mae) increased our principal amount an additional $100k. How is this allowed?

I thought the programs are supposed to help you not further bury you further underwater! Help!

So please tell me how can we save our home at an affordable price and affordable loan terms that do not exceed 30 years?

Or do we just give up? I do not want to lose my home and walk away, but it is crazy to continue to pay for a house that you owe $503k when it is worth 186k. What would you do?

We did receive a letter a few weeks ago from Bank Of America stating that we did qualify for Short sale of our property at a fair market value. But this seems unfair as it will sell our home where we’ve raised our children for the last 5 years to a stranger for less than 200k instead of modifying our loan and reduce the principal so we can keep our home at an affordable fair market value principal.

We have invested time, love and so much of us into our home we do not want to lose it.

Ed DeMarco needs to be replaced immediately and Fannie Mae needs to help all underwater homeowners. Enough is enough!

Thank you so much for your time and any attention to this matter is greatly appreciated.

May God continue to bless you and yours and I hope you have a wonderful weekend. I continue to pray for a light at the end of the tunnel and for an affordable mortgage principal amount.

With warm regards, Carrie

Kate Answers: Will Fannie Mae Allow True Mortgage Modifications

***zz-portrait-left.shtml*** Dear Carrie,

Thank you for your patience. I do my best to answer letters but sadly overlooked yours.

Your experience with Making Home Affordable, Fannie Mae, and Bank of America is harrowing. It's a story that needs to be told and a story that must be heard.

I have printed it here in full so when you write your local Florida representatives and the ones in Washington DC, you can link to this page for them to read. Hopefully this will streamline your efforts.

Include this link in your correspondence to elected politicians:
Don't miss Carrie's second correspondence with me at No HAMP Principal Reduction Alternative for Fannie Mae (GSE) Mortgage.
Good luck and best wishes,



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by: Anonymous

When I purchased my home, I added the mortgage protection plan that I thought would help in the event that I lost my job, but I soon found out that it was a waste of time.

Bank of America foreclosed on my house before the protection was up and didn't give me a chance to find another job.

Now I am reading that I'll probably receive a payment of about $850.00 that's an insult.


Hi Kate here...

What's going on is that the backbone of America, homeownership, is getting the short end of the stick. But don't sit back and think you can't do anything about it. Write your Washington DC representatives in the Senate, House of Representatives, and the President. (See 2 comments below for help.)

I'll be collecting comments and also sending them to Washington DC. But you, the individual homeowner will make the most impact.

You are frustrated and rightfully so! So go for it.

Best wishes, Kate

by: Carrie

Kate you are great! Thank you so much for all you are doing to help each homeowner who feels they have no voice and no where to turn.

Thank you Thank you

I have your blog in my favorites and I just finished emailing the White House, the senator and my congressman as well as letting him know to pass S249.

Hi Carrie, Kate here... HURRAY!!

Which bills for Responsible Homeowner Refinance Act of 2013
by: Anonymous

The following bills are still sitting in their respective committees to determine or consider if they will pass it forward to the House or Senate .

HR 736 (house of representative bill 736)
Committee: House Financial Services
Sponsor: Rep. Pete Welch

S 249 (Senate bill 249)
Committee: Senate Banking,
Housing, Urban Affairs
Sponsor: Senator Robert Menendez

Which these bills reference the Responsible Homeowner Refinance Act of 2013

How do we contact them to be able to let them hear our voices and send this bill to the house and Senate for approval.

We need these bills to pass to help the underwater homeowners!

Hi, Kate here with 4 simple and quick ways to make your voice heard about your struggles with homeownership.

I believe the bill you want is S. 249: Responsible Homeowner Refinancing Act of 2013.

But here are 4 other simple ways to make your voice heard:

1. Go to WhiteHouse.gov, 'Contact Us' to reach Corresponding with the White House. This is is a quick and simple way to write the President, telling about your struggles with homeownership and ask for specific change.

2. Go to Senate.gov, 'Find Your Senators', scroll down to your state and click. You will be given your US Senators with contact information. Send the same letter you sent to the White House.

3. Go to House.gov, 'Find Your Representative' and fill in your zip code. You will be given your House of Representatives with contact information. Send the same letter you sent to the White House and Senate.

4. Go to State.gov Of course, first fill in your state's name. Then on your state website, do a search (for example, 'mortgage help') to find contact information. Send the same letter you sent to the White House, Senate, and House of Representatives.

If every struggling homeowner will do this today, we'll bring change!

Best wishes, Kate

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