ARM Freeze - The Mortgage Bailout

Comments (33)

To Harry Balzak posting March 19, 2008- I wish everyone could be as "fixed" in their life as you. Some of us did not choose a 30 year fixed on our homes because the rule of thumb (per our lender) is that if you don't plan to live there longer than 5 years, the 30 year fixed is not the best plan. So, along the way some things change- like in year 2 the market falls out from underneath us. Now we are stuck. Our home is 150K below the value we paid. We tried to work with our lender (Countrywide) but were told that our credit history is too good. We pay for everything on time. We are scared of the impact 2 years from now when our ARM adjusts and we won't be able to sell or pay. Do you have any great words of wisdom now? Does anyone?

Above Posted By: Serena | Sun, 25 May 2008 10:28:39 EST

I called HopeNow with regards to my Mortgage and they were helpful giving me advise on who to contact. So I called my lender, Countrywide and as usual, they were less than helpful. I income has dropped by over 40% from this time 2 years ago and I am having to rob Peter to pay Paul which was never my circumstance prior. Counrtywide tells me that I do not meet the qualifications for mortgage modification because my net to debt ratio is negative but if it was positive they could help me. Well, if my net to debt was positive then I wouldn’t need help now would I. I would have extra money going into savings or extra to pay on my mortgage or just extra money laying around. Why would the mortgage company want to help those that don’t need help? Isn’t this the situation that caused the problem to begin with? Its like giving a tax hike to those that can less afford to pay higher taxes instead of giving them relief. I am llooking for answers to this situation that many of us are in.

Above Posted By: Mike | Wed, 21 May 2008 12:33:13 EST

All we want to do is refinance exactly WHAT WE OWE. We're with Countrywide and basically they said (since we're 40k upside down, in spite of making an 84k downpayment) that unless we're at least 3 months in arrears, their "customer retention" department won't even talk to us. We've never been late and this is our second house with Countrywide (and do they ever have some stupid people there). We're cancelling our bank's automatic payment today and putting our $2,700 away every month now. In 3 months they can either freeze our old house payment or they can have it back...then they can eat the 40k that we were WILLING to pay them when they have to resell at a loss. No wonder they're in such trouble...they're just morons. And actually...we're better off NOT freezing the rate (8.05%), let 'em have it back and going out next year and buying another home at 5.5%. Even renting for a year, we should be ahead about 12-15k and who needs the "tax write-off?" We paid 30k and got back 1k from the IRS.

Above Posted By: Richard | Wed, 21 May 2008 06:50:24 EST

We were due to have our mortgage reset in July. For the last month, I have been trying to either refinance into a rescue package or get a rate freeze. Negative equity etc. We contacted our mortgage company and sent off paperwork to them - hardship letter explaining rate was due to reset - finance worksheet - 2006 taxes etc. This morning I got notification that they are freezing the rate for 5 years. WHEW! Don't give up!

Above Posted By: Tammy | Thu, 1 May 2008 20:44:11 EST

Well after reading all of your comments. I decided to get a jump on my arm situation. My arm won't be up untill January of 2009. I don't qulify for a refy. So I called my lender (Countrywide) to ask about a arm freeze. I meet all the guidelines. I was told I would have to wait untill three months before my arm was up to be reviewed for the rate freeze. Now if I do this and they decide to turn me down. I will have only three months to sell my house. If I cannot sell my house in three months my arm will be up and I won't be able to pay my monthly payments. Then they will foreclose on me. So I am choosing to get out early. I am puting my home on the market ASAP. None of these lenders have any intentions of helping any of us they have hidden agendas. My family will have to start over again but, we will never put our dreams in a ARM again.

Above Posted By: JANE | Tue, 8 Apr 2008 09:22:24 EST

This is all a joke. The fact of the matter is, people bought more than than they knew they could afford, and now they are complaining that the government is not "helping" them.(boo hoo). I qualified for a 225K fixed mortgage in 2000, but realized I could only comfortably afford 140K. Could have bought the bigger house, but didn't. I bought a smaller house, but had the piece of mind. These people need to stop pointing the finger at the mortgage companies, realtors, and the government and place the blame squarely where it belongs- right in their mirror. Home ownership is a privilege, not a right. Everyone feels they deserve to own their dream home- even with their crappy credit scores. I'm all for helping people who truly deserve it. Everyone has bad things happen- sickness, deaths in families, job loss. These people should be given a break. Greedy, irresponsible people who have to have it all now should not. Go back to renting.

Above Posted By: Harry Balzak | Wed, 19 Mar 2008 12:41:02 EST

Wow, what a selfish and frankly dishonest person the author of this article is (and from the looks of it, may of those who posted comments about it). Rather than buying a slightly less expensive house using a fixed mortgage that you could afford, you decided you just had to have the more expensive house. You figured "I'll just get an adjustable mortgage, then I can afford it." Did it ever cross your mind that the rate will go up in 5 years? I'm sure it did. You are in either one of two groups- either you were wrong to buy the house you did, or you are trying to take advantage of the housing "crisis" by locking in your rate even though you really don't need to. Either way, the BORROWER is the despicable person here. I can't stand these arguments "Oh, the lender shouldn't have given me credit because I can't afford it". Are you serious?!?! If you can't afford it, then don't buy the house! Its not the lenders fault for trusting you, and its certainly not the governments fault for creating a marketplace in which lenders can trust borrows to take only what they need AND can afford. This housing crisis makes America look despicable. Apparently we are all foolish like children in a candy store- we'll eat and eat and eat, and when we get sick, we'll blame the store owner for allowing us to eat. Its your mess, don't make me pay for it.

Above Posted By: Smart Enough | Thu, 6 Mar 2008 10:44:55 EST

So what is the best advice to Freeze your rate then? I'm helping a client go through this proccess within the loss and mitigation dpt of the loan co. Can they say no to the request. This client has always paid on time, has no equity, and pre pay penalty. Lastly it is a fact, he will not be able to pay the new reset monthly charge. Any thoughts, thx

Above Posted By: Cesar | Tue, 5 Feb 2008 13:23:52 EST

I work at one of the calls centers that does Mortgage counseling. When you call in ask for the Housing counseling department . That is the special department that was created to help people with mortgage problems. The reason you were told they do credit counseling is because the company regularly does credit counseling and because of that was chosen to hire and create a department to also do housing counseling. When you call in what they will do is get some information from you that they need to forward to the people who service your loan. Like your name ,address, ss, dob. After that they are going to create a budget. What that will do is tell the service company your expenses and income to make a better decisision. After that they will give you the retentions tools that are available. Retention tools are programs available to you to save the house. After that they may make recommendations on what may be best for you in there opnion. After you hang up the phone they will forward your file to the mortgage service people who will call you in 7-14 days they will go over the retention tools once again and with you make the FINAL DECISION . The councilors have no authority to give loans or make final decisions . They are pretty much getting your file ready and you ready for when mortgage company call. To find a local agency go http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?filtersvc=hec&filtermultistate=yes

Above Posted By: J | Mon, 28 Jan 2008 19:55:09 EST

So what are we supposed to do? Why would the President make it mandatory but there is no way to get it done? My mortgage is going to go up in June and we are going to be out shortly there after because there is no way we can afford the new interest rate. Refiancing is not an option for us! HELP!

Above Posted By: Moriah M. | Thu, 24 Jan 2008 11:50:26 EST

i feel so cheated.. trust someone who is a smooth talker.. "oh dont worrie you have plenty of equity left" "this loan is perfect for what you need".. 686 rating at the time of refinance a few years ago. now at a 710 rating. never late. i have two young children and a wonderful wife. now 60k upside down.. how in gods name are we able to refinance.. i just dont understand why one of these banks cant step up in these matters.. we owe the money, we are making payments on time.. we can still pay a fixed rate for the next 30 years.. why cant these companies re-write these loans into fixed.. the ones who lied to us in the first place should be forced to re-write these the correct way.. why in the hell was i put in a subprime loan at a 686 credit rating in the first place..?? live and learn i guess you could say.. i hear these people say its our fault but what about the people who lied to us to get us in these loans..

Above Posted By: kerry mcconnell | Sat, 12 Jan 2008 16:13:32 EST

Yeah, and what about those whose mtg reset before Jan '08, who are already struggling to make the new payment (which is $1200 more than the old payment)!?!?!?!

Above Posted By: Anonymous | Tue, 8 Jan 2008 13:47:54 EST

POLLY??? What ever happened? You said you "called the servicer myself and explained and said frreeze or come get it" and that you would update in two weeks. Just interested as to how it turned out. We are in a similar sit set to adjust April 1. our lender (GMAC) was nice enough to send us a note reminding us that our rate was set to adjust soon and to call them about getting fixed rate. I guess they forgot I tried that last summer and couldn't qualify. Wish us luck.

Above Posted By: A M | Thu, 3 Jan 2008 12:02:26 EST

I just went on line to find some info on the so called freeze loans Thanks I guess now I dont have to waste my time

Above Posted By: same old story | Mon, 31 Dec 2007 23:01:50 EST

GREED,GREED,GREED, when did these words replace location,location.......etc. in the mortgage world? This debacle is just another part of the new America. I get mine first, to hell with the rest. I am only 46 and I can remember when people could trust a hand shake and not have to look over their shoulder at the same time. god help us all....................

Above Posted By: scott gardner | Mon, 31 Dec 2007 14:25:06 EST

I called customer service for my mortgage several times. It took two hours to get someone to even understand what I was calling about after being transferred several time. I did the application to request a freeze. At the end of the call I was advised to send a written request with proof of my income. I'm still not guaranteed. I tried to refi but the value of my property decreased. I also didn't qualify for the FHA loan. We'll see if my rate will freeze. I meet all of the other criteria.

Above Posted By: Tonia | Fri, 28 Dec 2007 18:05:38 EST

I take this as another insult to the american public. This is no longer a government "for the people, by the people". The Bush Heads figure that no one is paying enough attention. That we are just trying to figure out how to get through the week. Media will show a quick blurb about it, and depending on the outlet, not even question it (with a few exception as here). Media will just present it as the Bush Heads hope they will. "See, we are trying to do something to help, aren't we nice". Well NO!

Above Posted By: Peter D | Mon, 17 Dec 2007 12:13:51 EST

Our President and Government needs to acknowledge the fact that Unemployment, reduction or loss in pay and low minimum wage's has made it impossible to keep up with the cost of living in this country. More people are getting layed off. There are no good paying jobs thanks to Globalization/Outsourcing to foreign countries. President Bush has made a mess of this country.

Above Posted By: Anonymous | Thu, 13 Dec 2007 18:16:58 EST

I can check the first two boxes but am having a hard time figuring out if I can check the third box. I am on a fixed income. Our house was paid for when my husband got sick. I had to get an ARM. I live on zero percent credit cards, Social Security and some rent money. So far so good. Freezing my interest rate would help but how should I position myself? Does it have to do with my FICA score? I am awaiting a call back from "HOPE". The lady said I should charge for babysitting grandkids?

Above Posted By: Grandma Joyce | Wed, 12 Dec 2007 05:00:51 EST

Very Interesting. Profound. The article is interesting and straight forward, the Blog Comments, germane. Robert Toll's words are very true. However, over and above this, challenges far transcend "Sub Prime". It has to do with, *Conventional A Category teaser rate mortgages *Equity Lines of Credit *Auto Loans *Consumer Loans *Credit card debt. *Artificial "Growth Locale" inflation (Middle Americans can no longer afford homes in California and other growth areas.)

Above Posted By: Mike Wolpin | Sat, 8 Dec 2007 09:30:48 EST

Let’s prolong the inevitable. If the subprime borrowers are unable to afford the loan today what make the government and the mortgage companies believe that they will be able to afford it five years from now, particularly when the property they held for five years would most likely be worth half of what they owe on it today.

Above Posted By: Jose | Fri, 7 Dec 2007 18:23:09 EST

I knew it too. He knows nothing about this crisis. All the lender's ever do is tell us to wait until we are delinquent becasue that's when they can help us and the bail out is to put us on a plan to make up for the missed payments only to have higher payments. People did these loans thinking they would be in bettwer postions by the time the rates adjusted. Honest mistake. Not sure we all thought the country would be this bad off at this point.

Above Posted By: Tonja | Fri, 7 Dec 2007 16:56:51 EST

Bush is a joke and so is this double talk about help before foreclosure. by the time any program or method is implemented, the banks and lenders all have to want to help. the banks and lenders are waiting for you to start missing your payment so they can say sorry your fico sucks we cant help. come back when you get your score up to 680.by the time elections come around many people wont have addresses to make their vote valid.does bush care? I think not. we are least of his worries.

Above Posted By: richard a. real | Fri, 7 Dec 2007 13:55:18 EST

I guess the Pres. mispelled it. I guess it should be called "hopeno". :-)

Above Posted By: Nate K. | Fri, 7 Dec 2007 13:08:29 EST

Another example of politicians jumping into the middle of something they know nothing about and mucking it up!

Let's think about the choices, Should I refinance my existing loan into a new private mortgage? I'll have to qualify on a new 1003, well I couldn't qualify before why should I be able to qualify now?

I'm already in Foreclosure, or past the Sheriff's sale. My only hope is FHASecure, but at least its a program that has rules and is understandable (and if the broker knows what they are doing, works.)

If I freeze my rate now, and the rates go down I'm stuck at a higher rate! (There's that greed thing again.) and what about the Investors, Seniors, Pension Funds, Etc. who have purchased the bond tranches which were guaranteed a particular return? I'll bet Dollars to Euros the US taxpayer will make up the difference after the attorneys have cleaned up with all the ensuing litigation

Or am I being unrealistic?

Above Posted By: David L. Skibowski | Fri, 7 Dec 2007 12:57:02 EST

So, homeowners like me should do... what exactly?

Above Posted By: Polly L | Fri, 7 Dec 2007 12:37:51 EST

My arm is adjusting in Jan/ all payments on time. we both are inthe mortgage business and we have both lost our jobs (wholesale) and taken new jobs. Our salaries and commission at our old jobs were large enough to carry thene rate. Now Declining values and salaries do not allow us to refi, ,we just could not have ever guessed what was going to happen in two years.I called the servicer myself and explained and said frreeze or come get it,,,, Ill let you know in two weeks what the out come is

Above Posted By: Mark | Fri, 7 Dec 2007 12:36:24 EST

Mike, That's a shame about HopeNow. Just this morning I gave their information to someone. They are in foreclosure now, so it is not an interest rate freeze situation. But it still sounds like they don't have a clue. All this fuss about nothing it appears...

Above Posted By: Cheryl Hale | Fri, 7 Dec 2007 12:32:05 EST

Is any of this a surpise to anybody? (Besides the every day American who has zero clue to whats going on in the every day World unless they hear about it on the evening news or CNN. Please...to even hope for something from a Politician from any part is laughable. What's that old saying? "How can you tell if a Politician is lying?...his lips are moving!!" It's true. This whole thing is election year politics and sweetheart backroom deals. The media is a willing accomplice - Thanks.

Above Posted By: Bo | Fri, 7 Dec 2007 11:49:53 EST

Consumers need to be made aware, just as Hank Paulson said 40 times yesterday "this is not a silver bullet." They will be sadly mistaken if they think this is a guarantee. It will never be easier for them to refinance than it is right now. I agree Rhonda, that this is creating a dangerous misconception among consumers. We must rely on our ability to educate clients to prevent that type of fallout. It will be interesting to see what happens.

Above Posted By: Matt Graham | Fri, 7 Dec 2007 11:45:27 EST

hysterical. Although, it is almost as hysterical as all the people who thought even for a second that this president would actually have a soloution.

Above Posted By: Brian | Fri, 7 Dec 2007 11:41:20 EST

Thanks to the proposed mortgage freeze, I now have consumers who think they should wait to be saved when they should not. I have yet to do a FHASecure mortgage, we can and our lenders are set up for it...however, consumers should not wait until they're delinquent or their ARM resets...refi now. Although this is what consumers in trouble and the stock market wanted to hear, I think this is a mess!

Above Posted By: Rhonda Porter | Fri, 7 Dec 2007 10:46:20 EST

Matt, I tried calling the HopeNow number just out of curiosity and all I received was a busy number. I wonder if it was truly people needing help or if it was reporters and RE bloggers like us? :)

Above Posted By: Rhonda Porter | Fri, 7 Dec 2007 10:45:59 EST

Up In ARMs - The Mortgage Bailout

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