Tagged with " P&L"
18 Nov
2011
Posted in: Application Assistance, My Ongoing Story, Process
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My Meeting With Community Neighborhood Housing Services

Get the Right Person

The first person I spoke with at Community NHS told me that I was not underwater and would not probably qualify for HARP. After researching this program for several weeks, almost every day since October 24, 2011, I was almost positive that she was wrong based on my current balance.

$148,000 | 1st Mortgage
$  44,000 | 2nd Mortgage
$140,000 | Est. Tax Value
$125,000 | Zillow

Even if you remove the second mortgage, I still owe more on my primary loan than the value of the home is worth according to either of the sources that are officially used to determine your home’s worth (remember, you don’t need an appraisal anymore to apply for the HARP). Fortunately, this was not the person I met with when I came in for the meeting.

Rule #1. Listen to the experts, but don’t just take one opinion. Look it up in the official resource documents, do the research, and trust yourself.

Red Tape or Not, Some Employees Within These Organizations Want to Help

I want to mention that organizations like the one I visited help a lot of people out of difficult financial circumstances; they help people through financial hardships; and they foster programs that educate about finances and housing before buying a home.

But there is also red tape, and in my case, it simply came down to the title of the paperwork. I did not move forward with the HARP refinance through Community NHS because of the wording of their paperwork which read, “Community Neighborhood Housing Services Foreclosure Counseling Program. Intake Form.”

Without signing this paperwork, I was not able to officially benefit from their expertise. (Unofficially, I was lucky to have a quick chat about a few questions which I will outline in this post.)

The counselor I met with was incredibly knowledgable and helpful. She indicated that the paperwork should more accurately read NFMC Neighborhood Foreclosure Mitigation Counseling.

I was not comfortable signing documents that might reflect any misunderstandings about the status of payment on my house, or my intention which was to refinance via the HARP program, not to begin a foreclosure process.

The organization needs to connect helping you with an official program so that they can be credited for that. That is how they continue to receive funding. However, I think they need another name for the program, or a sub-program that is officially called HARP Refinance Counseling or Foreclosure Prevention.

Signing unclear documents is how I got into this situation in the first place, so I wasn’t about to go there again.

In our brief meeting, my unofficial counselor outlined an action plan that could be self-directed. Here are a few things I learned.

Other Refinance Options

• First and foremost, try to refi through your existing lender, if possible.
• Contact the City of St. Paul for another avenue to receive assistance in applying for the HARP program.
• Visit a different credit union or bank to refinance for the HARP program.
• Contact a credible mortgage broker based on referral.

Freddie vs. Fannie

Due to the complexity of the systems, lenders frequently either work with Fannie Mae or Freddie Mac, rarely both. Something to be aware of in the process. Credit Unions may more frequently assist with Freddie Mac.

2nd Mortgages

Two mortgages should not be an issue for the HARP refinance. What lenders are looking at is that your monthly payment on your first mortgage, including principal and interest, prop taxes, and house insurance is MORE than 31% of your household’s gross monthly income. Lenders will look at debt to income ratios.

Home Insurance

If your home insurance is in escrow, it’s less important to produce an insurance statement for the application process. Nonetheless, it’s not a bad idea to have your latest statement handy.

Final Check List for Documentation for the HARP Application

Documentation information varies dependent on different situations, ie: employed vs. self-employed; escrow vs. paying house insurance out of pocket, etc. (Not to mention misinformation.)

Here are is the final checklist for documentation needed to apply for the HARP for a self-employed individual with house insurance in escrow.

• 2 years of federal tax documents (signed and dated)
• year-to-date monthly P&L (monthly profit and loss from January, 2011 (or current year)  to current month.)

LPMI (Lender-Paid Mortgage Insurance)

This is the one that stumped me earlier. I was not sure if LPMI was associated with my primary loan or now. If your initial loan has LPMI, you will not qualify for the HARP refinance program. My loan was an 80/20 piggy back mortgage and these did not require mortgage insurance. Therefore, my unofficial counselor indicated that I am very likely not to have LPMI. This was the last item on my checklist.

It’s looking like I will qualify for the HARP program, if I can verify that I do not have LPMI with my primary mortgage. I think the only verification item remaining is my debt to income ratio. Now let’s see if I can call a lender into action on this.

8 Nov
2011
Posted in: Application Assistance
By    Comments Off on Community Neighborhood Housing Services

Community Neighborhood Housing Services

Community Neighborhood Housing Services (St. Paul, MN)
www.communitynhs.org

651-292-8710

 

After calling Community Neighborhood Housing Services, I find that this, like everything else, is a little disheartening. They tell me that my house is not technically underwater, but I’m not able to discern why. Nonetheless, I set up an appointment to have them look at my bank statements and taxes. Here’s the bullet point recap of the conversation.

Obtain your home’s Taxable Market Value

For my county, they instruct me to go to:
Ramsey County Tax and Property Lookup at the Ramsey County website.
Type in your address
Look at it from 1st loan perspective.

Of course the website is not working, so they look it up for me.

Taxable Market Value: $140,000

They tell me this only applies to the first loan, so my house is not actually underwater. I need more information to understand, which I plan to gather at the meeting. Here’s what they tell me I need, as a self-employed individual applying for the HARP.

Items Needed for the Meeting at Community Neighborhood Housing Services (In Progress)

From my Bank

• 3 months of banks statements – business and personal
• Monthly mortgage statement (1st and 2nd loan)

From my Accountant

• 3 years of self-employed tax returns
• PNL (profit and loss statement) – January 1st, 2001 to end of October.

From Me

• Copies of all utility bills (on paper)
• Statement with my house insurance  (in escrow)