Unraveling Money – My Exploration of Personal Finance and Productivity

June 1, 2009

Digging into Mortgage Deferment with Union Bank

Filed under: Mortgage — unravelingmoney @ 10:33 pm

One of my new rules when dealing with financial issues is to make sure that I have asked all the questions necessary to get the full picture of anything I’m signing up for. I think that in the past I have been somewhat deficient in this area, and it needs to change. So with that in mind, I worked up a comprehensive list of questions for Union Bank regarding the potential deferment of my mortgage for some months.

Here’s the list:

1. Are there any negative repercussions to my FICO score or to the interest rate(s) of my loans at any point in the process?

2. Is there a lump sum payment due at any point after the deferral?

3. What is the maximum deferral period allowed? Any minimum?

4. Will taking part in this program affect my chances of being eligible for a loan modification or refinance later on in the life of the loan?

5. What are my chances of being approved? I haven’t missed any payments on my loan yet, nor do I want to.

6. Are there any other hidden costs or negatives that I’m missing?

With this list in hand, I called up Union Bank again and asked away – to their credit the agent on the phone was very nice although as with everyone in this industry right now – she didn’t have many answers.

The bottom line is this: I have no idea who mortgage deferment would be right for. The kicker for me was that if I was able to get my mortgage payments deferred, it would probably make me ineligible for a future loan modification, but *not* a refinance. Since I’d really just like to get my loan modified, that wouldn’t really make any sense for me.

That all being said, there is currently no loan modification at Union Bank of California, since they did not take TARP funds and are not required to offer the Making Home Affordable program. So I’m essentially going off something that the agent at Union Bank said – they might offer something similar later this summer. We’ll see.

Back to the Mortgage Deferment program – they said that it would not harm my credit/FICO score, and they said that there were no extra or hidden charges or rate increases associated with it. When i pressed the agent to explain to me who exactly would be eligible for this program, she guessed that perhaps someone with temporary high medical bills might be – but they would still have to show ability to pay in the near future.

Summary: Not for me – I’ll hold out for a loan modification or some kind of refinance – which will hopefully be coming sometime soon. It’s just a shame that no one can tell me when.

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2 Comments »

  1. Several months agao I called Union Bank and asked if I could get my interest rate reduced. My payments were current, I had a 5 yr interest only rate of 6.375. They said that yes since the current rate that particular day for that program was 5.75, which is must be atleast 1/2 pt difference that they would modify my rate for a fee of $1199. The modification would be good as soon as they got the check. Since my payment would be dropping over $300 per month, in 4 months, the lower payment would make up the cost, so I did it. It was effective the very next payment.

    Comment by Linda Brehm — June 9, 2009 @ 4:16 pm

    • Thanks Linda, that’s a good tip. I’ll definitely try it – they didn’t mention any availability of a modification when I called – guess it helps to keep asking until you get something!

      Comment by unravelingmoney — June 9, 2009 @ 5:00 pm


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