Posted on: 19th May, 2009 09:39 pm
Hello all,
What criteria has changed recently that has cause my loan modification to be bounced back?...In april of 2008 I become unemployed. I have a first and a second with EMC mortgage. Paying both loans wiped off my savings and in December I fell a month behind. I contacted them to put me in a repayment plan, however, they would only negotiate on the primary loan. I was told to submit for a loan mod prior to my 4 month repayment date, at which case I would either be approved for the modification or be responsible for the balloon payment for being placed on repayment plan.
Unfortunately, the EMC dragged their feet in sending me the required documents to my home so I can submit my loan modification prior to April 1. I then contacted them again so that they can extend the repayment plan until my loan modification papers can be analyzed. When I submitted my loan modification, I recently got a new job, however, it pays me about a $1000 less a month. During this time, my second was behind one month until recently and I am all caught up there.
Today, I contacted my lender to see what the story is on my loan mod. I was referred to the person handling my case, however, they weren't available. I ended up talking to the supervisor who told me some disturbing things:
1. My loan mod request is being sent back to collections for clarification due to new criteria by the government under the Obama plan. No specifics were given to me.
2. When I asked what the next steps are, I was told either to short sale the home, or pay back remaining balance.
3. I was told that ONLY gross income would be used to determine a loan modification and no other criteria, including other debts would play a role in whether my loan would be modified.
After discussing this at length, this supervisor told me my loan modification would be about $75 monthly to make up for ballon payment. He did not give me an interest rate, or tell me the terms of the modification. I was on a 5 yr interest only fixed( with 2 yrs before the ARM adjusts) so not telling me if this loan becomes fixed or not is very important. On the second loan, he was able to reduce my payment by about $150 and tell me my interest would be 6.1%, however, not disclose the terms.
At the end of the conversation, I was told that those were my options and I could either agree with this terms or prepare for a short sale. It appears that my options are dwindling, since my home is worth 110,000 less than when I bought it in CA. I spoke to a HUD rep and she is directing me to some legal aid, however, I had some questions to ask of this process.
1. When loans are modified to keep the homeowner in the loan from an ARM, does that loan get fixed to a normal 30 yr fixed? Who decides this? What input do I have in this process?
2. In the repayment process(or loan forebearance stage), every attempt was made to ask about where every last dollar was being spent in order to qualify me for a temporary restructuring. Why is that not the case in a loan modification? Was he giving me bad info?
3. If the mortgage company owns the first and second, do I have a better chance in consolidating these loans together in a loan modification, or are they handled separately?
4. Prior to agreeing to payment terms, like in the phone call today shouldn't I received in writing the exact loan terms? Why would I feel like this convo was a take it or leave negotiation ?
5. What incentive does the home lender have in keeping me in my home when my home is worth so little since I purchased it? Wouldn't it make sense to work with me instead of against me?
I came away feeling very helpless from this convo, and the one I had with the HUD rep. I am not asking for $700 off my loan....just a few hundred. In talking to my wife today, we are both close to just walking away and taking the hit on our credit, but feel enraged that my loss of employment put me in this situation, and now that I have a job, no attempt is being made to help us on their behalf.
Any feedback is great...thanks
What criteria has changed recently that has cause my loan modification to be bounced back?...In april of 2008 I become unemployed. I have a first and a second with EMC mortgage. Paying both loans wiped off my savings and in December I fell a month behind. I contacted them to put me in a repayment plan, however, they would only negotiate on the primary loan. I was told to submit for a loan mod prior to my 4 month repayment date, at which case I would either be approved for the modification or be responsible for the balloon payment for being placed on repayment plan.
Unfortunately, the EMC dragged their feet in sending me the required documents to my home so I can submit my loan modification prior to April 1. I then contacted them again so that they can extend the repayment plan until my loan modification papers can be analyzed. When I submitted my loan modification, I recently got a new job, however, it pays me about a $1000 less a month. During this time, my second was behind one month until recently and I am all caught up there.
Today, I contacted my lender to see what the story is on my loan mod. I was referred to the person handling my case, however, they weren't available. I ended up talking to the supervisor who told me some disturbing things:
1. My loan mod request is being sent back to collections for clarification due to new criteria by the government under the Obama plan. No specifics were given to me.
2. When I asked what the next steps are, I was told either to short sale the home, or pay back remaining balance.
3. I was told that ONLY gross income would be used to determine a loan modification and no other criteria, including other debts would play a role in whether my loan would be modified.
After discussing this at length, this supervisor told me my loan modification would be about $75 monthly to make up for ballon payment. He did not give me an interest rate, or tell me the terms of the modification. I was on a 5 yr interest only fixed( with 2 yrs before the ARM adjusts) so not telling me if this loan becomes fixed or not is very important. On the second loan, he was able to reduce my payment by about $150 and tell me my interest would be 6.1%, however, not disclose the terms.
At the end of the conversation, I was told that those were my options and I could either agree with this terms or prepare for a short sale. It appears that my options are dwindling, since my home is worth 110,000 less than when I bought it in CA. I spoke to a HUD rep and she is directing me to some legal aid, however, I had some questions to ask of this process.
1. When loans are modified to keep the homeowner in the loan from an ARM, does that loan get fixed to a normal 30 yr fixed? Who decides this? What input do I have in this process?
2. In the repayment process(or loan forebearance stage), every attempt was made to ask about where every last dollar was being spent in order to qualify me for a temporary restructuring. Why is that not the case in a loan modification? Was he giving me bad info?
3. If the mortgage company owns the first and second, do I have a better chance in consolidating these loans together in a loan modification, or are they handled separately?
4. Prior to agreeing to payment terms, like in the phone call today shouldn't I received in writing the exact loan terms? Why would I feel like this convo was a take it or leave negotiation ?
5. What incentive does the home lender have in keeping me in my home when my home is worth so little since I purchased it? Wouldn't it make sense to work with me instead of against me?
I came away feeling very helpless from this convo, and the one I had with the HUD rep. I am not asking for $700 off my loan....just a few hundred. In talking to my wife today, we are both close to just walking away and taking the hit on our credit, but feel enraged that my loss of employment put me in this situation, and now that I have a job, no attempt is being made to help us on their behalf.
Any feedback is great...thanks
Hi cmezoom!
Welcome to forums!
It is not necessary that your loan will be modified and terms would be extended to 30 years. It is the lender who decides this. The lender will judge your financial situation to know how much he can modify the loan for you.
If you are making the payments according to the payment plan, then the lender will give you the documents to show that you have paid the mortgage dues. Lenders generally do not consolidate both the loans into one and give a modification. They are dealt separately. There are high chances that your lender can send your second loan to collections.
Yes, you should make it a point to receive all the loan terms in writing including your mortgage interest rate. I guess, once you agree to the plan, they'll send you the documents.
Foreclosures have increased in most of the states and most of the homes are not selling. If the lender forecloses the property, he will have to arrange for a sale and there is no surety that the property would be sold off. But if you stay in the property and pay the mortgage dues, then the lender will be able to recover some of his dues.
Walking away from the property is not a good option. This would lead to foreclosure which will lower your credit score badly. If you can't agree to loan modification plan, it's better to go for a short sale.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
It is not necessary that your loan will be modified and terms would be extended to 30 years. It is the lender who decides this. The lender will judge your financial situation to know how much he can modify the loan for you.
If you are making the payments according to the payment plan, then the lender will give you the documents to show that you have paid the mortgage dues. Lenders generally do not consolidate both the loans into one and give a modification. They are dealt separately. There are high chances that your lender can send your second loan to collections.
Yes, you should make it a point to receive all the loan terms in writing including your mortgage interest rate. I guess, once you agree to the plan, they'll send you the documents.
Foreclosures have increased in most of the states and most of the homes are not selling. If the lender forecloses the property, he will have to arrange for a sale and there is no surety that the property would be sold off. But if you stay in the property and pay the mortgage dues, then the lender will be able to recover some of his dues.
Walking away from the property is not a good option. This would lead to foreclosure which will lower your credit score badly. If you can't agree to loan modification plan, it's better to go for a short sale.
Feel free to ask if you have further queries.
Sussane