Posted on: 12th Apr, 2009 10:56 pm
Hi there! I sent in my Hardship package and when following up was told they had no information for me for 5 months. Recently a counselor called me to review my debt. Once we reviewed the numbers she stated I did't qualify due to excessive debt to income ratio and stated that "I should walk away from the home" I then called back to reduce the bills by eliminating the car payments. I was told I now DID qualifi. I received the docs in the mail however the interest was reduced one point bringing it to 6% and the principal has increased by adding in the past due amount accrued the last 5 months. I will basicially be locking into more negative equity. The home is appraising for 75k less. I asked the counselor if she could re-run my MOD and she stated it is possible that it could come down another point however there is no guarantee and if she re-runs the app the other offer is void. It is risky she stated. Any suggestions?
Hi Torres,
In the loan modification process, the lender reduces the interest rate but the term of the loan may increase. This is done in order to recover the total loan amount. It is true that the lender will add the past due amounts to your monthly payments in order to recover the debts. As your counselor has said that there's no guarantee whether you would get further reduced rates, I would suggest you to go for the one you are getting right now.
In the loan modification process, the lender reduces the interest rate but the term of the loan may increase. This is done in order to recover the total loan amount. It is true that the lender will add the past due amounts to your monthly payments in order to recover the debts. As your counselor has said that there's no guarantee whether you would get further reduced rates, I would suggest you to go for the one you are getting right now.