Mortgage Modifications?

[hereforinfo]

I am happy for you that you did not make any mistakes that led to you being in bankruptcy, and that you have arrived in your present situation through absolutely no fault of your own.

I'm not in bankruptcy, not at all. You have to understand how people like us are angry about paying for everyone else's mistakes. Of course you are human and in hindsight made the wrong choices, but it is still very frustrating to keep getting kicked in the ass when we didn't make those choices. We didn't take the same risks, we were careful and still ended up losing half the value of our home because of what others did. Because we didn't take risks and didn't screw up, we have to continue to pay a higher interest rate on an upside down home, while people who did the wrong thing get a lower rate.

IMO, if they are going to write down anyone's principal they need to do it for every mortgage borrower in the country. We put 20% down and are upside down on our home, yet someone who put down nothing could possibly get a principal writedown and end up with equity? That is so wrong.

[eddiep]

Recently I have been second guessing the decisions that have lead me to bankruptcy, but after reading that post I feel better. While my hubby was out of work I paid the mortgage and thats all. Honestly self-preservation was my main concern, I made sure we have a place to live, but I honestly thought the credit cards would be more willing to work with me since their money was not secured by property. I also thought the mortgage company would be less willing because they could take my house. Doesn't that sound logical? I guess I should have know better. I contacted one of my cc after he went back to work to see what my repayment options would be. They offered to accept my past due payment in full or I could pay them the full $13000 in one payment and would consider my account settled, I laughed a little and said if I had $13000 I wouldn't be asking for repayment options. She asked if I could sell my car to come up the the money! Sure then I can walk to work.

[eddiep]

BnkrptcyLwyr
That was some great info, I hadn't even thought about it like that. That is the truth, the banks are not really "modifying mortgages" and I feel like they are encouraging me to fall behind. I won't play chicken with my home. I won't stop paying so they will listen to me. What will I do if they say no, they will have the upper hand. I just want the term of the loan stretched out to 30 years, which would cut my payment in half and they won't do it. They act like I am asking too much. I wonder if they even have a calculator at my bank. I mean it doesn't take a genius to figure out that if they stretch my 15 year mortgage out to 30 years they will get MORE money from me! Not asking for a bail out, just more time!

[rjl0206]

Think twice before you take that loan modification ...

http://www.msnbc.msn.com/id/28645505/

The typical thing from my clients is that the bank requires you to fall three months behind before they offer a loan modification. Frankly, that is bullsh_t! That is not a loan modification, that is falling behind, and then catching up. They don't modify anything. They give you a few months with a little bit lower payment before a huge lump sum (that you likely will not be able to pay). It's downright deceptive, and often pushes people into Chapter 13 in an attempt to save their house.

What you want is a voluntary write down of principal, or interest, or both. If that's not coming about, then say no thank you. But whatever you do, do not voluntarily miss payments and fall FARTHER behind just so you can repay it based on unreasonable terms.

Hearing stories like this makes me want even more the Obama administration to pass the freagin move for mortgage cram downs already. This industry needs to be shaken down and ****ed LITERALLY.... people always ***** about debtors who bought in more than they can afford, but rarely do they ***** about the other side of it where the money hungry jerk-offs like these ceo's etc that push crap like this which I think outweighs IN THE end all those who bought more than they can afford. Its a capitalist world out there and everyman wants to make the BOOKOO bucks which in turn screws someone else over, so I think its fair to say morality has left the building when the shit comes back to bite you in the ass!! afford to pay or not, bought into a house they can afford or not I say its the debtors turn to go and **** THE GREEDY!!..


sorry to vent all!!!...

ray

[BnkrptcyLwyr]

Think twice before you take that loan modification ...

http://www.msnbc.msn.com/id/28645505/

The typical thing from my clients is that the bank requires you to fall three months behind before they offer a loan modification. Frankly, that is bullsh_t! That is not a loan modification, that is falling behind, and then catching up. They don't modify anything. They give you a few months with a little bit lower payment before a huge lump sum (that you likely will not be able to pay). It's downright deceptive, and often pushes people into Chapter 13 in an attempt to save their house.

What you want is a voluntary write down of principal, or interest, or both. If that's not coming about, then say no thank you. But whatever you do, do not voluntarily miss payments and fall FARTHER behind just so you can repay it based on unreasonable terms.

[Mi Bankruptcy]

What are the chances they would modify the mortgage without you specifically asking? I told the trustee we would reaffirm our auto(s) and home. I just received the reaffirm agreement for one of my autos( Wells Fargo) They dropped the interest rate down and the monthly payment without us asking in the reaffirm agreement. We will have our tax return and plan on paying the loan off next month. So, I don't plan on reaffirming.

I have not received the reaffirm for our home ( also Wells Fargo). I would like my int rate to be reduced currently at 7.5% I have never been late on my home. I have automated deductions for our house payment. Our home is worth what we owe with a little bit of equity. I am so glad.. I told I insisted on a higher fixed rate, than falling for the low adj when buying our first home.

[Trixie007]

This is what is so troubling. They give loan mods to you, who made bad choices and "cheated" in the first place, then get the loan mod and bail on the house anyway. While people like us, who bought responsibly, pay the mortgage on time and will never foreclose, can't get our 30 year fixed rate reduced to save money and can't refinance because of foreclosures like yours killing our home values. This is why I am so against loan mods, at least in those situations anyway. The government's money would be better spent refinancing respsonible people who want to stay in the homes and won't contribute to the meltdown. And every modification should require a full audit on those "no doc" loans to go back and verify that everything on the application was true. Because I find it sickening that they are modifying loans obtained fraudulently.

Thank you for your judgemental reply, not knowing the full story of our situation. I am happy for you that you did not make any mistakes that led to you being in bankruptcy, and that you have arrived in your present situation through absolutely no fault of your own. That must feel really good. I wish I was you. (tongue in cheek)

A little clarification that my shed some light on how we got our loan (just for the fun of it):

As stated previously, we did a NINA (No Income No Asset documentation) We actually did document DH's income and his employment of about 15 years with the same employer "off the books" loan where they ignored our existing home We had a current appraisal and a CMA done on that home, it was on the market at the time, and both showed that we had about 150k in equity, and at that point, the current marketing time at our list price was estimated to be 90-120 days - which was supported by both the appraiser and the realtor using current marketing/sales data - this too was supplied "off the books" and used my undocumented income I actually provided my income documentation, but I was a 1099 contractor and had only been doing it for around 15-18 mos - not the 24 months required to apply full doc self employed -again supplied "off the books" as a compensating factor.

So, all the "off the books" info was supplied to the broker, who did manual underwriting, and the actual lender on the loan did a review of all of it before giving us the special approval under the NINA loan guidelines. Essentially, had I been self employed for the full two years, we could have done a full doc loan. At the time, we had very little debt, other than mortgages, and our income was sufficient to meet the DTI requirements, even when including the mortgages on both houses. Also, the LTV of both loans was originally less than 80% on the second home - we supposedly had over 100k equity when we first bought it. So this wasn't even one of those 100% financing deals.

Unfortunately, right after we got the loan for the second home, the real estate market crashed, and both houses became upside down (we didn't find that out until later), and, being employed in the real estate industry (not doing loans or selling at that point, but still related), my job went South. I went from earning enough to cover everything to where in 2008 I only grossed 8.2k for the year in that business.

We carried the 4 mortgages on both houses for over a year. I worked 3 jobs - at one point traveling away from DH and two teenagers 3-5 days a week overnight- and we still were sinking further and further behind every single month. We finally hit the point where family had to come first, I was missing our kids last years at home with us, and we gave up. Prior to mid 2008, we never had a single late payment on our credit history. Also, even if were still holding on by then, we would've sunk last fall when I started getting sick, culminating in my surgery last week. Man, I could write a book! Too bad the title "A Series of Unfortunate Events" is already taken.

I welcome your full audit. Could we have done things differently? Sure. We could've waited to sell the first house to buy the second. Did we make mistakes? Absolutely. I'm not perfect, just forgiven.

And BTW, just because this is how it worked in our case, doesn't mean that I'm judging any of you reading this who stretched things in your financing, lol. Live and learn.

Sorry for the long post, this kind of judgemental, vitriolic posting really chaps my hide, and seems to pop up fairly frequently from the one who claims to be "here for the info". Back to our regularly scheduled programming.

[eddiep]

I know, just jumping in, just stating my own situation, sorry didn't mean to offend.

[hereforinfo]

Eddiep, my response was to Trixie07 whom I quoted in the reply.

[eddiep]

I'm not late YET, never have been. Was "responsible" have fixed rate. Not upside down either, I actually have 30k equity.... Why mod? Because we had hoped to retire one day! We wanted to bite the bullet when we refinanced 5 years ago and did not go for 30 years. We didn't anticipate our income going down so much and the cost of living going up so much! Guess that bullet bit me in the butt!

[hereforinfo]

We did a loan mod on one of our homes last summer. I think we missed 3 or 4 payments before they offered it. I'm a little hazy on the details right now, but I think they reduced the rate from 7.75% down to like 3.5% for 3 years, then it goes back to the original fixed rate. The also forgave the past due interest & fees - wiped them off completely rather than tacking them onto the end of the loan. It was actually a pretty decent deal, and we may have followed through with it, but then DH got transferred to another state, and we were upside down.

Interestingly enough, as part of the mod we had to sign an agreement that we wouldn't sue the lender for any violations that occurred in the origination of the loan- looked like they were covering their butts! We were happy enough to sign that - I don't think that we can hold them responsible for our bad choices - LOL - they did some pretty interesting stuff in approving our original loan. It was a NINA (commonly called liar's loans in the industry) using only DH's income, ignoring the first home, using my income as an "undocumented" compensating factor. Sheesh, no wonder we're in trouble...

This is what is so troubling. They give loan mods to you, who made bad choices and "cheated" in the first place, then get the loan mod and bail on the house anyway. While people like us, who bought responsibly, pay the mortgage on time and will never foreclose, can't get our 30 year fixed rate reduced to save money and can't refinance because of foreclosures like yours killing our home values. This is why I am so against loan mods, at least in those situations anyway. The government's money would be better spent refinancing respsonible people who want to stay in the homes and won't contribute to the meltdown. And every modification should require a full audit on those "no doc" loans to go back and verify that everything on the application was true. Because I find it sickening that they are modifying loans obtained fraudulently.

[albacore44]

Oh sorry, I was thinking OTHER creditors, not your mortgage co. Do you agree with that after reading so much on loansafe? I think it really depends on your bank. Seems like folks are doing it before, during and after BK. And before, during and after being late on payments etc. And I think things are changing so often that it's really tough to say. Be careful about doing a mod prior to filing a 7 too, could affect your means test significantly.

this is just my gut feeling, and I have no examples to back it up, but I would think you would have better leverage after Bk and doing a ride through, if your property is upside down. particularly with your second. one would think the bank would be anxious to write down principal and re-negotiate to salvage some of their investment, rather than forcing forclosure, and losing it all to the 1st mortgage holder who gets paid off first. it makes perfect sense.

Wonder if any members here have tried this ??

[eddiep]

I haven't seen many mention bk at loansafe.

[eddiep]

No I am sure the mod won't affect the ch 7. Unfortunately we are WAY under on the income. Over past 6 months we have made less than half of the state median income. Hubby was out of work for three months. I am afraid that the judge will say you can't afford your mortgage (and we really cant). With his new job we come up $200 short each month with bare bones expenses!

[Tromploi]

Oh sorry, I was thinking OTHER creditors, not your mortgage co. Do you agree with that after reading so much on loansafe? I think it really depends on your bank. Seems like folks are doing it before, during and after BK. And before, during and after being late on payments etc. And I think things are changing so often that it's really tough to say. Be careful about doing a mod prior to filing a 7 too, could affect your means test significantly.