COMMON REASONS FOR LOAN MODIFICATION DENIAL:
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Successful SunTrust Loan Modification Obtained in Oxnard, CA
The Law Offices of Michael Gaddis, APC recently obtained a loan modification from SunTrust for homeowners located in Oxnard, CA. This loan modification was EXTREMELY difficult due to the fact that the loan was in a Mortgage Backed Securities ( MBS ) pool. The problem was not SunTrust, in fact, SunTrust worked diligently with Michael Gaddis to find a proposed solution. MBS loans are one of the most difficult types of loans to modify. The underwriting guidelines that provide the rules for how the loan servicer can modify a loan in the pool are very limited. MBS loan pools do not typically participate in HAMP/MHA so borrowers attempting to obtain MBS loans are limited to the investor based underwriting guidelines. Sometimes borrowers like to blame the servicers for the issues that they incur during the loan modification process, and although the servicers do deserve much of the blame heaped upon them, sometimes they are not responsible for the issues that are preventing a loan modification approval. In this case, the underwriting guidelines would not allow a decrease in interest rate or an amortization extension. The guidelines were very restrictive and SunTrust was just as frustrated as Michael Gaddis. However, SunTrust told Michael Gaddis that they were going to have a new Net Present Value ( NPV ) tool and that, although the investor had not approved use of the tool yet, that they would run this borrower s financials through the new NPV and then, if it passes, try to get the investor to approve the results. When SunTrust ran the borrower s financials through the new NPV it passed and created a step-rate modification with an initial interest rate of 2.65%, well below the 6.75% note rate. SunTrust then attempted to get approval from the investor who they claimed was Wells Fargo. After weeks and weeks of trying SunTrust notified Michael Gaddis that the proposal from the new NPV had been denied because it did not comply with the underwriting guidelines. Meanwhile the borrower received a notice from SunTrust identifying not Wells Fargo, but US BANK as the investor. Michael Gaddis found this odd so he approached US BANK about the potential of making an exception for this borrower and allowing it to be modified or Michael Gaddis requested that US BANK move this particular loan out of this MBS pool into a different pool that would allow for the SunTrust NPV tool results. US BANK responded that they were not the investor on the loan, that SunTrust s paperwork was incorrect. Michael Gaddis then advised SunTrust of the issue and, at the same time, approached Wells Fargo about the issue. Subsequently, US BANK followed up with Michael Gaddis and explained that they had been incorrect, that they were the Trustee of the MBS pool and that Wells Fargo was the Master Servicer. US Bank said that ultimately it was Wells Fargo that made the call regarding the MBS pool. Michael Gaddis then approached Wells Fargo AGAIN and explained what had happened and appealed to them to allow the loan modification pursuant to the terms of the SunTrust NPV. Believe it or not, they did!
So this was a case where everyone involved worked together to get the right result. SunTrust, Wells Fargo and US BANK all deserve credit for thinking outside the box and doing the right thing. This loan modification was not easy but the result was the correct result.
The clients are ecstatic to say the least. They were able to save their home. Michael Gaddis takes a lot of pride in helping homeoweners save their homes and he is very proud of this case.
Michael Gaddis is a licensed California attorney based in Carlsbad, CA. His practice is limited to assisting distressed homeowners resolve their home loan situations with their lenders. Since 2008 Michael Gaddis has helped nearly 2,000 people modify their home loans.
To view a copy of the SunTrust Loan Modification please click the following: Suntrust Loan Modification