Thursday, February 19, 2009

I Don't Mean To Brag...

But we got our mortgage modified back in January. Actually is was the day before the time I got stuck in the driveway and then the wireless keyboard died. Really, I wondered if some karmic balancing was going on.
I'm not sure whether our modification relates to the original stimulus package that passed last year. Countrywide did not initiate our mortgage, but they hold it now.
If that name sounds familiar, Countrywide was one of the company names being tossed around when the sub-prime meltdown started. They have since been bought by Bank of America (who I'm pretty sure is buying the world). But they also got smacked by the federal government and according to this article from The New York Times some state attorney's general went after them, Connecticut being one of the states involved in the settlement.
I say this might be bragging because all the news stories I've been seeing seem to be about people who can't get their mortgage modified. But it was a breeze for us.
Now we are responsible home owners who pay all our bills on time and have good credit scores, so I don't know how much that is a factor.

What Prompted the Call?
When the sub-prime meltdown started I began wondering whether we had one of those pesky loans because we had a 5-year arm. Hubby and I had already been discussing looking into refinancing or something, since the arm was expiring next year.
Well, that snow day he was in the house unattended and opened a letter from "The Loan Modification Team."
(Hubby being unattended is a key plot point. If I had been there I would have thrown the letter out a junk mail.)
Since the topic was already on his mind, Hubby called to find out more. The guy told Hubby "the lenders" hire his company to find and modify sub-prime mortgages. Hubby said some of the stuff the guy said sounded ok, but other stuff sounded fishy (like mentioning several times that they are "a legitimate business." Hellooo, if you are that legitimate, why mention it?). I wandered in just at the point when the guy wanted $1,200 so they could start processing our paperwork.
Fortunately, Hubby is smart enough that he had given the guy NO information and when the guy said that Hubby said he had to discuss it with his wife and call him back. (hint, we didn't call them back.)

Let's Make a Deal
So we called Countrywide's refinancing department. The guy said our house probably didn't have enough value to refinance, considering the fees, and gave us the number to their internal modification department.
Did you catch that? Their internal department. So why would they hire an outside company?
(Oh, and just for the record, our house has held it value pretty well all things considered.)
We called the other number and the nice lady pulled up our record, which she had on hand because we do business with them, she asked permission to pull our credit reports (and said we have great scores), and she had us read her some figures off our W2s.
Then she said she could offer us a fixed 2.25% for 10 years and interest only payments for 5 years. And we said "Hallelujah, thank you Jesus" because that basically cuts our monthly payments (including escrow—ins, tax) in half! (Oh, after 10 years the rate goes variable, but it only changes once a year and won't go below 2.25% or above 7%.)
I literally fell on the floor when I heard the figure, but I did it on purpose for comic effect.

Sign Here
She told us we had to make our next two payments at the current rate and on time, which we've been doing for four years now so it isn't a problem, and the new terms would kick in in April.
I had to fax her our W2s. And she arranged for a notary public to meet us to sign the paperwork, at no cost to us. They even included the envelope for my favorite overnight delivery company. Oh, and this modification doesn't have any fees. Everything has been at no cost to us.
Our parents thought it was cool, but my mom expressed concern about the interest only payment bit. Because, as we all know, when dealing with debt if you aren't paying down the principal you aren't making progress.
I assured her we are aware of that, but considering we replaced the roof and the central air over the summer, we have some other debt to redirect the freed up funds toward. And there aren't penalties for prepayment.
Hopefully, once things settle down a bit, we can also consider funneling some of those funds into buying wine and yarn, because we all must do our part to stimulate the economy.

1 comment:

  1. Sounds like you got a good deal sweet pea! We have a fixed 30 year rate somewhere around 5.6%. I think we still owe 12 years of the 30. I think in the market right now it is 4.9% for the 30 year fixed. If it gets down to 4.6%, I'm picking up the phone!!! We have to look out after ourselves, ya know! :)