March 19, 2013
FOR IMMEDIATE RELEASE
HONOLULU, HI - Ligaya Badua came to Hawaiian Community Assets (HCA) in May 2012 to receive free HUD-approved foreclosure prevention assistance.
A single parent of 1 child, Ms. Badua had exhausted all of her savings to make on-time mortgage payments after her brother and his wife had abruptly moved from her home. At $3,925/month, Ms. Badua was paying 79% of her monthly income toward her mortgage loan leaving little at the end of the month to pay for food and other needs for her and her son.
As soon as she knew she would not be able to make a payment, Ms. Badua contacted her lender, Chase Bank, and started the process to secure a loan modification. She completed an intake form, demographics survey, household budget, authorization forms, and provided copies of tax returns, bank statements, pay stubs, and bills to verify her monthly income and expenses.
Ms. Badua was denied twice.
"I couldn't understand what the bank was asking for," confessed Ms. Badua. "It seemed very confusing."
She made a third attempt at a modification and was approved for a reduction in her 8.9% interest rate.
Unfortunately the success was short lived.
Soon after the modification was approved, Chase Bank sold Ms. Badua's loan to Ocwen Loan Servicing before the modification could be finalized. When Ms. Badua contacted Ocwen Loan Servicing as her new servicer, the modification agreement terms previously secured with Chase were no longer in place.
"We are seeing a trend among the 5 largest mortgage servicers where our homeowners are being approved for modification agreements only to have their loans sold to a smaller servicer before the agreements are finalized," says HCA Foreclosure Program Coordinator, Sonja Gonzaga. "Unfortunately this practice results in our homeowners being placed with servicers that do not have to abide by the National Mortgage Settlement servicing standards leading to a repeat of 2008 when paperwork was being lost and servicers were non-responsive to their borrowers."
Determined she would succeed again, Ms. Badua completed the necessary forms and gathered copies of her financial documents to submit for a loan modification with Ocwen Loan Servicing hoping to bring her high interest rate down.
Shortly thereafter Ms. Ms. Badua was contacted by Ocwen. She had been denied.
Worn out by the process, she heard about HUD-approved housing counseling from a family friend and enrolled in HCA's foreclosure prevention program in May 2012. Immediately, she started working with Ms. Gonzaga who assisted her in gathering her necessary paperwork, establishing an affordable household budget, and maintaining communication with Ocwen to secure a work out plan.
6 months after submitting for a loan modification and conducting conference calls with Ocwen, Ms. Badua secured a loan modification. Her 8.9% interest rate was reduced to 2% dropping her monthly mortgage payment by $2,425 to $1,500.
"I am so grateful for HCA and Sonja! It made such a difference to have someone who would listen, and not ignore me," shared Ms. Badua.
"Without the option for mediation, HUD housing counselors can provide the opportunity for borrowers to engage with their servicer in order to secure mutually beneficial workout plans," finished Gonzaga noting that a December 2011 National Foreclosure Mitigation Program Report by Urban Institute reported that homeowners who received HUD-approved housing counseling through the NFMC Program were 60% more likely to avoid losing their home to foreclosure than homeowners who do not seek counseling.
For more information on how to address foreclosures in Hawaii call the State Department of Commerce and Consumer Affairs' Hawaii Foreclosure Information Center at 808.587.3222 or visit the Hawaii Foreclosure Information Center.
Hawaiian Community Assets is a nonprofit, HUD-approved housing counseling agency that builds the capacity of low- and moderate-income communities to acheive and sustain economic self-sufficiency with a particular focus on Native Hawaiians. Our philosophy supports permanent housing, culturally-relevant financial education, and asset building programs to acheive our mission.