Most of the decline was in refinances, which fell 16.2 percent and the purchase index declined 4.8 percent. Except for 15-year rates, mortgage rates were down slightly:

• 30-year fixed-rate mortgages decreased to 5.04 percent from 5.07 percent.
• 15-year fixed-rate mortgages increased to 4.53 percent from 4.51 percent.
• 1-year ARMs decreased to 6.79 percent from 6.86 percent.

You might have heard the frequent ads out there about loan modifications. But for someone who isn’t behind in their payments and can’t sell their home, are the lenders really willing to work with borrowers? What does a consumer do if their somewhere in the middle?

One story to tell….

Some clients of mine were trying to sell their home last summer. Because of plummeting values, they ended up having to wait. They decided to apply for a modification with their lender. The package included a hardship letter explaining why they needed a modification. These clients could still afford their payments, but due to unexpected medical cost and other unexpected expenses, a little relief was needed. These clients have great credit, and very little debt as far as their credit report goes. The only issue was that they didn’t have sufficient value any longer, and coming up with the difference was impossible.

To make a long story short..

My clients were sent a loan application to apply for a refinance. No one called them to discuss their specific situation. A few weeks went by and then they received a denial statement for excessive obligations. The kicker was that the denial notice didn’t have a phone number or even the information on what credit agency was used when their credit was pulled. They tried to contact the resolution department to see if they could find out what their ratios were and perhaps pay down a debt to make the numbers work. They were told what the basic ratios were (28/38) and that was it. The CSR couldn’t transfer them because the department wasn’t taking any calls. They couldn’t speak to an underwriter or a credit manager. I thought that was interesting that if they were approved they would be contacted. 

What can be done if you are trying to get assistance?

Well if you have the cash to pay an attorney or a Real Estate professional then contact a qualified and licensed attorney through the California State Bar or compare the services and fees offered by other licensed brokers from the Department of Real Estate. If you don’t have the money to pay for this type of service then contact a non-profit agency that offers home loan programs such as:

• Home Ownership Preservation Foundation
• Department of Real Estate 
• California Consumer Home Loan Information Program

If lenders are going to modify a loan, shouldn’t it be done pro actively and not just after payments have been missed? Why are those who are current with their payments but in a tight situation not rewarded, and those whom are missing payments are rewarded?