Mortgage Modifications?

[ansky0007]

Has anyone been successful is obtaining a mortage loan modification to lower the interest rate? If so where were you at and what were you able to get?

[sivuh5]

I Did

I got a modification from Wells Fargo. I had to fall behind three months in order to get them to talk to me. They initially sent me an agreement to sign stating that I was behind three months, that I would pay 1/2 payments for the next three months and that I would owe the balance (over $11,000) in full on the first day of the seventh month.

I knew I couldn't make that last payment, but I signed the agreement and sent it back anyway because they said they would continue to try to modify my loan.

Finally after another month went by, I got a letter stating they were lowering my interest rate from 7.625 to 5.625 and they would put all of the arrears at the end of the loan, and extend to 40 years. I signed it and sent it back as they requested, that was in September. Then they didn't need a payment for October or November, and just a couple hundred dollars for December. I made my first new payment (which was reduced by about $400) on 1/1/09.

I have not filed BK7 yet, but plan to this year. Have not paid any credit cards since April 08. My credit is trashed, but I had never been late with a mortgage payment and was with WF for about 5 years. I think they required at least 2 years of on time payments to work with you.

HTH.
S.

[saintjohn]

good for you! though extending the time to 40years would mean that you still pay the same, although not as heavy per payment.

still good though

[Trixie007]

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...

[Flamingo]

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...

Morgage Loans like you describe above are what brought down things to where there are right now. Your last sentence describes things for everybody from that fallout.

[Trixie007]

exactly -

[Tromploi]

I found a GREAT site/forum for loan mods. It's just like this one for BK's. I am glued to both now. Hope this helps.

http://www.loansafe.org/forum/

[Hrdluck1]

I work for a law firm which does loan mod's.
We have been very successful in helping 100's of clients.
If you have any specific questions I would be more then happy to help. PM me.

[albacore44]

The mods being offered by and large are not really effective, as I have read of very few successes of anyone getting a principal write down. My residence has declined in value 50% since 2007. when a home becomes upside down Ltv, as many are in this country, you can't qualify for any type of mod. there are several well known economists reccomending government programs to write down/defer principal and the government gets paid back when the property is sold. They must come up with a comprehensive plan to significantly reduce forclosures, or property values will continue to sink.

[Hrdluck1]

Albacore,
We have seen principal reduction from 5K to 165K and have seen lenders completely wipe out deffered interest.
You are right though, There are many times where the lender wont do a thing.
Some times people have to realize they either
A. Made a bad investment
or
B. Need to wait it out

If they can get an affordable payment they can most likely wait it out for 4-7 years and hope the value comes back.

Value really has nothing to do with a modification. It is income driven 90% of the time.

[ansky0007]

All I am looking for in my case is a rate decrese, I have a 30 Year Fixed at 6.75%, I have seen some mods go below 5% and on a $400k mortgage that can save $6000 a year which would be very helpful to me. Unfortunately they will not talk about a mod because I am still current and I cant fall behind because I am in the middle of BK, I need to wait until I get the BK over with before I can start missing payments.

[Hrdluck1]

Ansky,
It can be done. You need to be persistant and paint the picture that you are struggling. You need to show a legitimate hardship as well. Talk with your BK attorney. The best time to get a modification doen is in a BK. You have more "ammo" to use against the lender.

[Tromploi]

Read the stories on the forum link I posted above, there are ALOT of success stories as well as examples of hardship letters, who to contact etc. I don't think principal reductions are a big part of it, and IMO people shouldn't be expecting that anyway. But interest rate reductions, longer # of years, and some negotations with the 2nd mortgages (some are paying pennies on the dollar). Alot of people have been helped, but you have to be realistic about it.

[Hrdluck1]

Tromploi is correct. Principal reduction is an "added bonus" of any modification.
ost seconds can be settled around 8% of the principal balance.

[ansky0007]

Ansky,
It can be done. You need to be persistant and paint the picture that you are struggling. You need to show a legitimate hardship as well. Talk with your BK attorney. The best time to get a modification doen is in a BK. You have more "ammo" to use against the lender.

Unfortunately right now we are trying to save the house since the trustee was trying to take it from us. If I stopped paying on the house right now it would be much easier for the trustee to take it from us so my lawyer has advised us to make sure our payment on the house stay current so it looks like we will have to wait 1-2 more months before we stop making payments.

We have not re-affirmed the loan but we are making the payments. Its included in the bankruptcy so we could walk away at any time but we have around $70k equity and we have lived here for 10 years and dont want to move.