Posted on 01/02/2010 10:31:13 AM PST by Bluestateredman
Mortgage help lacking Natick woman frustrated with Obama program to modify loans By Thomas Grillo Saturday, January 2, 2010 - Updated 5h ago
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When the Obama administration launched a mortgage modification program for distressed homeowners, it sounded like the perfect solution for Cheryl Freier.
But the 65-year-old Natick resident, who is struggling to make payments on an $185,000 loan, has been unable to convince JPMorgan Chase to lower the 7 percent interest rate on her loan or forgive some of the principal.
“My husband died suddenly in 2006 from pancreatic cancer and I have been devastated without him, but I will not give up my home,” she said. “I’m still making the payments, but I’m begging Chase for the modification.”
Freier has been working with a counselor from the South Middlesex Opportunity Council, a Framingham anti-poverty agency, since last fall to negotiate a better rate and a possible reduction of the principal with Chase. But so far they have been unable to come to terms.
Christine Holevas, a Chase spokeswoman, said the mortgage company is trying to reach a solution, but the case has been complicated by the fact that Freier is unemployed. “Income is necessary for a modification,” she said in an e-mailed statement.
Freier is not alone. While the $75 billion federal Making Home Affordable program unveiled last year was designed to keep as many as 4 million Americans in their homes by reducing monthly mortgage payments, the program has been a disappointment to many.
In April, the U.S. Treasury Department said six financial institutions signed up for the plan, including lending giants JPMorgan Chase, Wells Fargo and Citigroup. The modification requires the loan servicer to reduce interest rates so that the monthly obligation is no more than 38 percent of a borrower’s pre-tax income, and then the government would contribute cash to bring payments down to 31 percent of income. Servicers can also cut the loan balance to achieve affordability levels.
But at the close of November, just over 31,000, or 4.3 percent, of loan modifications granted by lenders under the program had been made permanent.
Freier and her husband, Martin, moved into a new seven-room raised ranch house in Natick shortly after they married in 1972.
But as the couple was nearing the end of the 30-year note, they refinanced three times from 2002 to 2007 to help pay for Martin’s parents’ medical bills, major home repairs and college tuition for the couple’s two daughters.
Today, Freier is paying $1,500 monthly on an interest-only loan for 10 years at which time the principal will be due.
“I’m out there plugging, but I need a little assistance,” she said. tgrillo@bostonherald.com Comments(58) Comments | Post / Read Comments Next Article in Business & Markets: Boston becoming Sovereign Bank’s ‘real’ headquarters Advertisement IN TROUBLE: Cheryl Freier stands in... Photo by Angela Rowlings IN TROUBLE: Cheryl Freier stands in the doorway of her Natick home, which she fears losing because of her inability to get a modification of her home loan through a federal program. Related Articles Feds vow air security check Feds vow air security check By Associated Press WASHINGTON - A brazen attempt by a Nigerian with ties to Islamic extremists to smuggle... More on: + Obama administration + mortgage modification program + Cheryl Freier Top articles in Business
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I've read this article's title twice now.
All I've figured out is that I probably need more coffee.
Be very careful how you use your house as a bank.
How can she not have income and still pay the “interest only” payments.
WEIRD
Actually I am confused because if she had an FHA loan (she should) modification doesn't requite income, just showing that the monthly payment will be lowered for a person who has a track record of making payments
If she can make $1500 a month payments and has a history of doing so (big IF) they should be happy to lower her interest rate to the prevailing 4.5 % and give her a 30 yr loan that includes payments against the principle
SS income is “income”. She could also take in a roommate or set up a home business like babysitting or pet sitting
I agree about the 2 college educated daughters, they should be willing and able to chip in something. I would bet they spend a couple hundred a month on cell phones, manicures and cable and drive new cars
Is she the right color for a loan modification?
The banks WILL NOT HELP YOU to do this- if you don’t do all the work yourself you cannot expect them to
So much for freedom to do business however...
Today, Freier is paying $1,500 monthly on an interest-only loan for 10 years at which time the principal will be due.
This woman needs to just get an apartment or maybe move in with one of the two daughters. Zero sympathy here.
The woman has two college educated daughters but she wants Obama (translated: us) to pay her mortgage.
Good luck with that principal.
There is also mortgage insurance that settles situations such as these perfectly.
Well, better than a wide screen television with surround sound or a new vehicle anyway.
(GASP)
You EVIIIIL conservative you!
You probably breathe and own an SUV to destroy the planet too. / ~ ; ) /MS
Link: http://www.natickma.org/assess/detail.asp?ACCOUNT_NO=39%2D0000033D
Does that hold true in the case of modification? If it is true, then the 7% mentioned in the story seems like a pretty good rate to me. Little reason for the bank to accept 5%.
Hoax and Chains in full operation...
***Freier and her husband, Martin, moved into a new seven-room raised ranch house in Natick shortly after they married in 1972.****
What is this? They should have paid it off long ago! Once out of debt on a house, NEVER ever go back into debt with it!
I bought my first house in 1977 with 7.9% interest, sold it 17 years later, took the money and and bought a run down farm house free and clear.
My worthless brother-in-law (if you know him he probbly owes you money) bought a fixer upper in 1995, no down. Refinanced it and spent the gain. Refinanced it again and spent the gain, and again and again. Now he owes much more than it is worth and is considering bankruptcy or walking away from it.
My uncle said it years ago. The best raise in income you will get is when you pay off your car and house! He was right!
If you look more closely at the article, you will find that she refinanced it twice in this decade for a variety of uses none of which had anything to do with homeownership or paying off her own debt.
The whole situation is insane but even more insane is the author's attempt to suggest that this is anything but irresponsible money management on the part of the home owner.
The lady goes on to say that she WON'T leave HER house.
Somebody forgot to tell her that it isn't hers.
That could be.
My property (presently in another state)I purchased 01/90 at 9% and I didn't refinance until 5% in '04.
I however know what I can afford, prepare for what I can't if needed, and have insurance and a nest egg just in case I screw up.
Most don't follow my formula in life however.
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