Anyone done a Loan Modification

[my1stgn]

I talked to my mortgage company today and they told me I need to be 4 months behind before they will even do a loan modification. Has anyone done this before? How bad does it affect your credit and how much did your payment drop? i just want to make sure I dont miss like 4 payments and then Im screwed house wise and credit wise. Only facts please, I dont want to get bad advice like your sisters-cousins-neighbors-dog told you that it will mess up your credit for like 300 years or something. Im sure someone here has to be in the same boat. Thanks!

 

[Xflatrater]

For the last 10 years my wife has worked in forclosure (paralegal) the bank will not talk to you unless you are behind in the payments, also if you do not file chapter 7 there is a chance of the bank sueing you for the difference between your new payment and the actual payment at a later date....same with a short sale, they can sue you for the difference ,,, chapter 7 releases you from your personal obligation to the property and you can still mod the loan ..some wait until the day of the sheriffs sale to file chapter 7 and live for free for 2 or more years until the sale because of the backlog of the system. Best advice is get a good BK laywer and follow his advice!!
Hope this helped!
Tony

 

[JoeNational]

I know a few people very close to me that have done this...

Facts:
You need to be behind in payments I think it is at least 3
You need to show good reason why your behind (injury, health reasons, etc...)
You need to have a hardship letter stating why your behind and potentially show monthly expenses... showing that over extended is very bad and they will not help you if you have this
It will go a negotiator if you pass all of their checks and give the all the info and send in all the paper work they require
Then you have will be put on a trial period of about 3 months with the new amount showing that you can actually show good solid payment history
If that is good you will be put on a 5 year loan mod and they will re-evaluate after that
The floor is around 2.1% for the loan mod and can go up from there
Depending on your house and current mortgage you can save a few hundred a month by doing this
It will of course affect your credit but it is not going to kill it forever... Once you get back on track it will go up in time.

Hope this helps...

 

[chadly]

Me personally no, but I’ve worked with several who have tried. I've bought many houses from people who are behind on the mortgage and were trying to do a loan modification. They were told the same thing as you. The problem they had is once you are four months behind they will look at a loan modification but they also start the foreclosure process. This is the point where people call me to do a short sale. Each state is different but I personally would do all that you can to stay current. Here is Iowa you cannot be sued for the loss the bank takes from the primary mortgage holder. Any second liens/mortgages can sue for their loss. Good luck and god bless.

 

[RobsIron]

Miss 1 payment and it will screw your credit. Much less 4. Your score will drop and you won't get anymore loans on anything for a long time. If you do get a loan the interest rate will be very high.

All my mortgages have a low fixed rate except one. I received a letter stating the payment was to increase. I called and told them that it was a investment property and its worth less than the loan and if they increase my payment they were going to get 'jingle' mail(keys to the property):biggrin:.

I received a loan modification in the mail about 3 weeks later.

2.077% fixed for the next 3 years. Then increases 1% for 2 years then another 1% for the next 2. Never to go over 4.9% for the life of the loan.

I'll sell it within 3 years. Hehe

Tough it out and make your payments on time. Just complain often...maybe they'll do something.

 

[tomsws6]

my wife was unemployed for 3yrs and 2 of them cause of kids and times got really tight recently. she asked about it because her best friend did it and saved them 400bucks but they also had a 2300 mortgage. she called when she was u nemployed and they said she wouldnt qualify because she didnt make enough money. she is now employed with the state police and she called again and now there excuse is her bills exceed her income(house only in her name, she got it before we were married) She told them "well thats why I need help!" they said sorry...... usaa did a loan modifacation on our truck and our home equity loan with no issues at all. we just told them that it was getting ruff and they totaly rewrite the truck loan and called us the next day and said we also rewrote your equity loan for a yr. screw the mortgage companies!

 

[turbo39151]

Don't do it Vic! Loan mods are garbage. They're non-existant. Miss a payment your credit will drop miss three or 90 days late and you might as well have filed a BK. Lenders don't want to work with you if you're upside down (ie: owe more than it's worth) unless you can make up the difference in cash at the time of closing. Additionally, if you are behind, you will need a hardship letter and even then it's not guaranteed that they'll work with you AND even if they did work with you it's more of a joke than you'd believe, I had one lender tell me that the difference in payment would be something like $100 or so. It was a waste of time and a useless risk of good credit.

As for a short sale, not a good idea. Only people that make money are the brokers. You might walk away but, IIRC - CA is a state that allows for deficiency judgments... And it also ruins your credit. It would suck to not only loose the house and the credit but to also owe money for something that you don't own. If you can't pay today- that's ok they'll put a lien on file and you WILL pay one day...

If the house is way upside down you might be able to file a bk. Be advised that if your credit tanks, it will be a few years before your credit will recover enough so that you will be able to get a decent rate for a new home loan.

Additionally, you may not qualify for a liquidation chapter 7 but rather a chapter 13 which would have you making payments for the next 3-4 years...
All of that will depend on your assets, liabilities and any additional financial issues you might have. It is recommended you hire legal counsel for this so you don't mess it up. It's not cheap. If it is, be careful...

There are various options depending on your situation. Most of them are not ideal considering the current economic climate but, at least there are options...

 

[Quick6'n'-K.C.]

How far upside down are you on the house? Are you behind already? Or is it that the house is not worth the actual cash value?

BW

 

[my1stgn]

Well so far I only been like 1-10 days late (2-3 times) just so it looks like its hard to make ends meet.... but I havent been late enough were they charge me a late fee or anything. but from what I heard there is no help for people who are upside down or need a loan mode. I payed $465K for the house about 4 years ago and now its worth about $280k. My interest rate is 8% and 6% (have to loans on the house) and I already went through the makinghomesaffordable website to fill out the questionnaire. It said I was eligible and then I did everything else (the hardship letter, the bank statements, budget analysis, listed assets, etc) and they sent me a letter saying my current status is "temporary" and I didnt qualify. So I called them a talked to the EMC Rep and he said I will only be looked at for a loan mod (interest rate mod) if I was 4 months behind in payments. Fvck that, I dont want to mess up my credit if they aint gonna modify my loan anyways. So I guess Im stuck with the payments.

Other questions, does loan mods mess up both the borrower and co-borrowers credit? Im assuming yes. What other options do I have. We could make payments like normal but with the house being worth so little is it really worth it?

 

[turbo39151]

Both parties on the loan will suffer if the payments fall behind. You're gonna be upside down in that house for quite a while... SD will go up in value eventually but I'm sure Santee will be one of the last areas to benefit...

I'll shoot you a pm...

 

[my1stgn]

Hey bro, thanks for the advice. I think Imma call my bank (USAA) and see if they can refinance even if I am upside down, but if they give me less than 5% interest, then Im keeping da house.

 

[chopped39]

A good friend jumped on the obama plan.You have to be very carefull. He has a finance guy he knows very well.He stopped making payments and 65 days later they placed a sticker on his front window.His finance guy had him put a bid on the house the same day .He explained it to me but if it does not have tires I dont listen.Anyways his mortage amount was $175,000 now he owes 76,000 at 3%. the only problem is someone can buy your house out from under you.He was tring to get me to do this but my luck my ex-wife would buy it out from under me. This sounds to good to be true but it worked for him. If I knew I was going to loose my house I would try it as a last resort.

 

[turbo39151]

Vic: no bank will refi if you're upside down. They'll want you to have the difference- The loan is secured by the value of the property. If there is nothing to secure the loan there is no reason for them to finance.

Unfortunately these banks will cut off their noses to spite their faces... Even if it makes more sense to help you and keep you in the house, all they do is read the script and will not work with you.

If you need help down there shoot me a pm.