Final US Bank Loan Modification Obtained For Homeowner Located in Carlsbad, CA

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The Law Offices of Michael Gaddis recently obtained a final US Bank loan modification for a homeowner located in Carlsbad, CA.  Prior to contacting Michael Gaddis for a free consultation, this client had tried to modify his loan several times with no luck.  If fact, after reviewing the homeowner’s situation Michael Gaddis was even a little skeptical as to whether or not the homeowner would be able to obtain a loan modification from US Bank.  Michael Gaddis identified 2 problems.  First, the borrower’s financial package included income from both the borrower and a non-borrower contributor.  The homeowner’s non-borrower contribution income was difficult to document.  Likewise, the homeowner’s income also presented potential underwriting issues.  However, Michael Gaddis felt that he could assist the homeowner in properly presenting his financial package.  In other words, the income issues were overcome-able.  Michael Gaddis was more concerned with the second issue, the LTV.  LTV is an acronym that stands for Loan-to-Value.  LTV refers to the amount of equity that a homeowner has in their house.  If a homeowner has a 100% LTV that means that the value of their house is equal to the amount they owe on the loan, in short, they have $0 in equity.  If a homeowner’s LTV is 125% that means that the homeowner owes more on their house than it is worth, in short, the homeowner is underwater.  The higher the LTV, the less equity the homeowner has, the lower the LTV, the more equity the homeowner has. In this situation the homeowner’s LTV was conservatively 73%.  In the loan modification world the higher the LTV the better.  The higher the LTV the greater the risk of loss to the investor on the loan and the more incentive there is for the investor to work with the homeowner.  Although LTV is not the determining factor in the Net Present Value test, LTV is a weighted factor.  In essence, the lower the LTV the more difficult passing the NPV test will be.

At first, Michael Gaddis was hesitant to take on the homeowner’s case due to the potential LTV issue, however, the homeowner was extremely persistent and eventually Michael Gaddis capitulated and agreed to assist the homeowner.  Against the odds, Michael Gaddis was able to procure a final US Bank loan modification for the client.  The investor on the loan was Fannie Mae and the resulting final US Bank Loan modification was a definite win for the homeowner.  The final US Bank loan modification was a HAMP step-rate loan modification.  The initial interest rate for the first 5 years is 2% followed by 3% in year 6, 4% in year 7 and capping out at 4.25% in year 8.  The initial principal, interest, taxes and insurance (“PITI”) payment of $979.83 represents an over $600 reduction from the homeowner was paying per month PITI prior to the US Bank loan modification.

As always Michael Gaddis and his staff will continue to monitor the homeowners’ file in order to ensure that US Bank receives the executed final loan modification documents; that the terms of the US Bank loan modification are properly uploaded into US Bank’s system; and that US Bank returns the homeowners’ file to regular servicing.  To view a copy of the US Bank loan modification referenced in this blog as well as other loan modifications obtained by Michael Gaddis please click the following links: and

US Bank Freddie Mac Trial Loan Modification Obtained for Homeowner in Chula Vista, CA

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The Law Offices of Michael Gaddis recently obtained a trial loan modification from US Bank for a homeowner located in Chula Vista, CA.  While US Bank was the servicer on the loan the loan was actually owned by Freddie Mac.  The homeowners had tried and failed to obtain a loan modification prior to retaining Michael Gaddis.  The Freddie Mac waterfall starts with a HAMP review and then progresses down to investor based modification offers.  Michael Gaddis knew that HAMP was not going to be an option as the homeowner’s current HTI was already below 31%.  He advised the homeowners that their best and most realistic option was to obtain a Freddie Mac “in-house” modification.  The Freddie Mac “in-house” modifications are not nearly as lucrative as the HAMP modifications but they are still a good way to modify a loan for homeowners that would otherwise not qualify for HAMP.  Typically, the modification will reduce the interest rate to around 4% or so and extend the term of the loan to 40 years.  In this case it worked perfectly and the homeowners were presented with a trial loan modification with a trial payment of $2,404.86 that was nearly $200 less than the previous monthly payment.  The savings is actually greater than that because the previous loan was an interest only loan so converting the loan to a principal and interest means that a portion of their payment is now going to go toward their unpaid principal balance.  Another factor which added to the difficulty level of this loan modification application was the fact that the loan had borrower paid mortgage insurance.  When a borrower has mortgage insurance it makes it more difficult to modify because the mortgage insurance affects the NPV test.

As always, Michael Gaddis and his staff will continue to monitor the situation in order to ensure that the borrower receives the final loan modification documents.

US Bank Final HAMP Loan Modification Obtained for Homeowner Located in Vista, CA

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The Law Offices of Michael Gaddis recently obtained a US Bank final HAMP loan modification for a homeowner located in Vista, CA. As usual, the HAMP loan modification is a step-rate modification having an initial interest rate of 2% for the first 5 years followed by a 3% in year 6 and a 3.5% fixed for the remainder of the term.  US Bank extended the maturity date of the loan to reflect a 40 year note and deferred $58,700 to the end of the note as a non-interest bearing deferred principal balance.  The payment of $1,698.81 reflects a nearly $900 a month reduction from what the homeowner was paying prior to the loan modification.

Michael Gaddis and his staff will continue to monitor the homeowner’s file until US Bank has returned the homeowner’s account to regular servicing.

To view a copy of the US Bank HAMP loan modification please click the following link: