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brooklyn_bridgePG and HG, husband and wife, own a view house in a good neighborhood in Tacoma. They owed around $495,000 on a home worth maybe around $450,000. It had been worth $750,000 before the Great Recession, and maybe when the economy recovers, it will be worth that much again. They strongly wanted to hold onto their home.

Their problem was that their interest rate was 7.0% and their monthly payments were $3,326 for principal and interest and $653 for taxes and insurance, for a total of $3,979.

Their business had declined. They were  on the verge of losing their home.

When you look up PNC in the list of lenders who have agreed to cooperate with Making Home Affordable, you will find PNC on the list. However, PNC was only the servicer. The investor had not taken the TARP money and had not agreed to cooperate with Making Home Affordable program.

Although PNC is signed up with Making Home Affordable, the investor does not participate in HAMP.

Nevertheless we were able to negotiate a 2.0% rate for PG and HG, with the rate escalating to 3.275% after seven years. The new payment was $2,204 plus $653 for taxes and insurance, for a total of $2,857.

If the investor had agreed to a 40-year amortization, the payment would have been $1,496 for principal and interest plus $653 for taxes and insurance, for a total of $2,149. The investor held the amortization to the original 23 years, which kept the payment up.

Read the terms of the modification here.

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