Loan Modification

[porcelina68]

What is the name of your state? Indiana

I just received notification that my application for a loan modification to remove my home from foreclosure status was approved. My monthly payment was modified, and I was told that I would need to pay the attorney fees and the late charges up front.

In doing some research on this subject, I read on HUD's website that these can be paid to the mortgage holder either in one lump sum, or in a repayment plan separate from the modification agreement. When I attempted to point this out to the representative from my mortgage company, he stated that they could only accept it in one lump sum.

Would I need to speak with his supervisor, or would I need to wait for the legal paperwork, and then contact the foreclosure attorney myself with this information?

[HUD-1]

I think it is the lender who decides whether it is collected as a lump sum or under a repayment plan, not the homeowner. If you can get them to agree to a repayment plan, fine. If not, I think you will have to come up with the cash.

[HomeGuru]

Originally Posted by porcelina68

What is the name of your state? Indiana

I just received notification that my application for a loan modification to remove my home from foreclosure status was approved. My monthly payment was modified, and I was told that I would need to pay the attorney fees and the late charges up front.

In doing some research on this subject, I read on HUD's website that these can be paid to the mortgage holder either in one lump sum, or in a repayment plan separate from the modification agreement. When I attempted to point this out to the representative from my mortgage company, he stated that they could only accept it in one lump sum.

Would I need to speak with his supervisor, or would I need to wait for the legal paperwork, and then contact the foreclosure attorney myself with this information?

**A: is this a FNMA, Freddie, VA/FHA or some other similar type loan? Lenders do not have to agree to a payment schedule on legal fees, court costs, late fees, foreclosure fees etc. once the property goes into foreclosure.

[porcelina68]

It is an FHA loan. In order for them to approve a loan modification for me, it had to be taken OUT of foreclosure status, according to HUD, because the modification fully reinstates the loan. Also, according to HUD, it is not at the lender's discretion as to whether or not the late fees and attorney fees are to be paid in one lump sum, or in a separate payment plan.

I think I will get in contact with someone at HUD, or perhaps an attorney for advice on this matter. Thank you.

[HUD-1]

From HUD Mortgagee Letter 200-05:

Foreclosure costs, late fees and other administrative
expenses may not be capitalized. Lenders may collect the
legal and administrative fees (resulting from the canceled
foreclosure action), from mortgagors to the extent not
reimbursed by HUD, either through a lump sum payment or
through a repayment plan separate from, and subordinate to,
the modification agreement.

I dont see how the borrower decides the terms of the repayment of the legal fees/admin fees. Is there some other guidance you are looking at?

[porcelina68]

I've said two times already - this information is on HUD's official website. I didn't just pull it out of my a#% to post here.

[HUD-1]

So you are proficient at surfing the web for regs but are entirely inept at interpreting them.

[porcelina68]

Evidently, I am capable of comprehension. I know what it said, and I know what it meant. If you would take the time to READ the first post, you'd know what I was asking.

All I want to know is - do I speak with the lender about this, or the foreclosure attorney? The customer service rep with my lender didn't seem to know is you know what from a hole in the ground.

Could someone please give me a straight answer instead of insulting my intelligence?

Did you call HUD today?

FHA will not allow these charges added back into the mortgage. They must be worked out with the lender which will require you to pay in one lump sump or through payment arrangements. If the lender will not allow you to make payment arrangements, then get a foreclosure representative on the phone. If this fails to get you monthly arrangements, then go back to HUD, and maybe they will have a contact within the company that will allow this.

HUD 1 is absolutely correct on this matter, and there is absolutely no reason for you to be acting this way.

[porcelina68]

In the future, I'll PM someone who might actually understand what I need, rather than post to people who pretty much quote me, and think they are giving me an answer.

Did you call HUD yet?

While you are at it, look up the word OR in the dictionary.

[HUD-1]

I have been involved with many modifications. I have never seen a lender set up payment arrangements. They always want it in a lump sum. Why? Because the homebuyer can get the modification in place and then not pay on the payment plan set up for legal fees. I have seen one lender set up a 3 month payment plan which is paid PRIOR to the modification going through. Again, this is at the lender's discretion, not the homeowner's.

[porcelina68]

Thank you HUD-1. I have been in contact with my local Housing and Urban Development field rep, and he answered my question. I must have mis-understood what you were trying to tell me. My apologies.

It looks like I will have to persue a Chapter 13, because they do not want to work with me on this matter, and although my foreclosure is supposed to be on hold for 30 days, I was served yesterday with a notice of sheriff sale, to take place in a couple of weeks.