After applyining to the Home Affordable plan to decrease the interest rate in our mortgage, we discovered that our credit rating had been adversely impacted although we had not been in default and had been paying according to the pre-approval terms. We were never told that the sole application for the program and while the evaluation was taking place will be reported as defaulting on the mortgage payment.
Default on a mortgage backed obligation is seen more severly by financial entities than other type of default; hence, credit limits were decreased and interest rates in non secured obligations and payments of obligations affected by the rating review increased so the effect of the applying to the plan may have brought some relief from the cash flow perspective but the effect was nil when compared to the increase in annual payments in insurance premiums, for instance.
After four weeks of talking to 10 customer service representatives in New Delhi, we were able to talk to someone at the Loss Mitigation department who stated that the mortage company had not made a mistake and that this was just the way it was so we will remain reported as delinquent while the evaluation of the application was taking place. Despite having applied by mid March, to date we have not received any request for documentation nor have been approached with what needs to be done for our situation to be clarified. This situation has reminded me that indeed no aid comes ever for free. I wonder what the small print or the operational hurdles of implementing a health care reform will burden us with....
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