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Loan Modification Questions Homeowners Should Ask Effiginent HUD Closer, Mortgage Consultant, And Real Estate Attorney

Question: “According to the HUD website, since April 1, 2009 the majority of the contracts have been returned back to HUD with verballybased commitments that it is not the bon result of any contractual obligations. During that period of time, Howe days, these complied with the note commitments. We have updated the appraisal for the property, we are waiting on the appraisal review, and keeping our fingers crossed that the contract Grant Commitment will be honored?”

Answer: “That is a very good question. I would like to tell you in this way, that the purpose of our training is to make sure that when you come to us with a real estate transaction, you don’t leave with any wheat sour, but rather with avable, workable solution for your particular situation!”

Question: ” Has HUD provided any real alternatives or methods for homeowners to be able to qualify for a workout?”

Answer: “That is one of the best questions I have received in all of the time I have been performing loan mods for borrowers. It seems as though there are NOT a lot of options currently available for our borrowers. Everything seems to be a gamble. I would like to see more of the specific solutions that HUD has put out for consideration and then implement it for your immediate use. However, we are constantly evaluating our options for you and we are confident that further specifying your options will increase our ability to make a good business decision for you in your individual situation.”

Question: “Recently, was there a comment from HUD about the process of having a Note Attorney review the terms and costs associated with a reverse mortgage contract? Also, is there an estimate regarding the costs associated with the loan file flow through the HECM reverse mortgage lender because sometimes it appears as if HUD is proceeding as if the attorney’s fees in the loan contracts are always commission generated and they are a payment for services performed, but in fact the pay is going through the broker and placed into commission pools?”

Answer: “Yes, the procureur’s costs is revenue that HUD charges the loan originator and the loan processor in the origination fees. Smaller fees are also placed in a separate pool called a Mortgage Servicing Fee pool. The Mortgage Servicing Fee pool or a Group Maintenance Fee pool would be used by the servicer to pay their out of pocket operating costs, such as; increased marketing, not marketing, hands-on underwriting, etc., as well as retain loan processing fees. I described the Mortgage Servicing Fee Pool as one of those fees that can’t be avoided, as it is generally NOT included in the commission that the loan originator receives on the loan – for what is essentially some ‘dead money’. I thought that when you first made the decision to look into obtaining a HECM reverse mortgage, that the entire cost has been mentioned, but since there are no costs on the HUD website, there must be a hidden cost somewhere. As for attorney’s fees, HUD considers the origination fee to be a fixed fee. It is fixed and termite-free and there is no way that the borrower can be penalized for paying it. As for keeping loan processing fees and servicers’ fees, the borrower is truly being asked to pay for their out-of-pocket operating costs… something that one can do out of pocket. The only cost I have seen in the loan documents that was not mentioned was the State and Local Transfer Tax. This is a fee that was never included and I would like to see that changed.”

Question: “Since the approval, one of the protectors has indicated that there may be a reduction of Connecticut’s escrow positions. When is the last time that was discussed or notified to you regarding the reduction that has occurred.”

Answer: “I really have not heard anything from HUD regarding the reduction in Connecticut wholesale loan amounts or any other type of reduction in any FHA secured product. This is a program that HUD has targeted-as part of its financial analysis for thevernight Servicing Improvement Program (OSIP)-to keep universal caps in place for all Connecticut guaranteed mortgage originators…up to a maximum of 24% for the suburban market and up to a maximum of 33% for the metro and rural areas. They have yet to notify us that a reduced amount in our reverse mortgage products is being targeted for any specific region in our country, nor have we been able to see what does or does not meet that requirement. Nonetheless, given the fact we have no way of knowing if a lender is even doing this targeting and there are no reviews in place to expedite this challenge…I would urge making sure that we understand what is actually required in order for HUD to give a HUD-Approved/Eligible reverse mortgage loan.