A Tale From the Front Line of Mortgage Loan Modification
by Michelle on November 17th, 2009
As unemployment, the leading cause of foreclosure, continues to soar above 10%, ShoreBank’s work helping homeowners to refinance and modify their mortgages continues to intensify. In addition to implementing the ShoreBank Rescue Loan program, which is helping homeowners to refinance their original loans from other institutions, we are among the few banks aggressively working with our own borrowers in President Obama’s Home Affordability Modification Program (HAMP) to provide new affordable mortgages.
Pundits say: “The bigger the story, the smaller the focus;” so let’s focus on how one of our mortgage lenders is tackling the challenge of saving a home.
Jabari Watson, an experienced loan officer who joined ShoreBank nearly two years ago, never imagined his responsibilities would be turned upside down. Far from his previous ShoreBank role assisting first-time homebuyers and residents with new home purchases, today he has become a mortgage modifier extraordinaire. While the duties have changed dramatically, one constant has remained—the amount of satisfaction he derives from helping an individual or a family have a home.
Each morning, Jabari receives a handful of troubled loan applications from our Asset Protection Department. He then identifies the appropriate, available rescue program that will best help the borrower catch up on his or her mortgage payment and save the home from foreclosure. But time is not on his side. The process usually takes up to 30 days and often the homeowner does not have that kind of time to get the issue resolved.
Once he identifies the appropriate program, Jabari hits the ground running, verifying the program’s criteria for application. To qualify for the HAMP program the borrower must:
- Have originated his or her home loan before January 1, 2009
- Be living in the home as his or her primary residence
- Have an unpaid balance of not more than $729,750 (for a single-family home)
- Have an income (this can include federal assistance or a part-time job)
- Have a monthly mortgage payment that exceeds 31% of their monthly income
In addition, Jabari must obtain certain financial information from his borrowers, including a signed tax return transcript form, their most recent tax return on file, their two most recent pay stubs, and an “affidavit of financial hardship” that, with the exchange of voice and email messages, often takes an inordinate amount of time to collect.
“Despite sifting through the endless mountains of paperwork, my pressure is nothing compared to what our customers are going through,” said Jabari at a recent team meeting. “These people are staring at the possibility of losing their homes and having nowhere to go. Now that is real pressure, so I try and handle their situation with the utmost sensitivity which can be hard to do when I have to ‘beat the clock’ to get the application process in time to save the home.”
Despite this and other current challenges, ShoreBank loan officers like Jabari have successfully completed 53 modifications since the launch of the program with many more in the pipeline. While we look forward to the day in the (hopefully) very near future when we can get back to exclusively making loans for new home purchases, we are committed to helping our customers and our communities through the economic crisis and to helping as many people as we possibly can.
Tags: community development, HAMP, mortgage modification, Rescue Loan program, ShoreBank, triple bottom line
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Wow so happy I stumbled upon this today. I’ve been hunting for this type of information while preparing my hardship letter for my home loan modification. It’s somewhat of a daunting task and I want to make sure that everything I do on my end is in order.