Modification question

[Pandora]

The other half of the 31% question is whether that payment can actually service the loan.

If you have $400,000, with PITI, that payment is probably pushing $3000 per month. However, if 31% of your gross income is now only $1,400, that is simply not enough to service that loan even at 30 years at 1%. So, there would be no way to modify.

This is true - which means foreclosure is the banks benefit as it wouldnt justify a modification as even with all the stops, bells and whistles, there is no way to modify to get it down low enough. ETA: We were lucky enough to be able to get everything done and not have a huge balloon (under 15K) when our note becomes due at year 40, so it was in the banks interest to modify and not foreclose - and we can afford the mortgage the entire life of the loan.

Thanks for pointing that out HHM ;)

[ssmdem]

The other half of the 31% question is whether that payment can actually service the loan.

If you have $400,000, with PITI, that payment is probably pushing $3000 per month. However, if 31% of your gross income is now only $1,400, that is simply not enough to service that loan even at 30 years at 1%. So, there would be no way to modify.

I agree - which is exactly why I have said all along that I don't know that it's even worth the effort to try as I don't know that it's going to help. And again, exactly why I don't want to go the HAMP route. The trial payments are my issue -- I refuse to throw anymore money at this loan if we're probably going to lose the house anyway.

I've run the numbers and percentages already -- actually used to be a loan officer myself in a former life -- it's HIGHLY questionable whether they're going to be able to pull this off.

Don't mind giving it a shot -- but not willing to fork out trial payments for months to have them say no or adjust the payment to something even higher to bring the loan current. If they'll do an in-house so I know what we're looking it, I can discuss it -- but since I know the chances are slim.......just would rather let them take it and be done with it.

My husband actually talked to the DOL department yesterday. Of course they suggested short sale, which I'm just not dealing with -- houses aren't selling around here anyway - AT ALL -- consequently the reason for the excessive amount of rentals available. They didn't sound completely negative and were actually pretty nice. Suggested going the modification route first just to see what they could offer before throwing in the towel. But said they were certainly willing to discuss it with us if that's the route we decided we wanted to go.