Mortgage Modification Question:Need Advice Please

[Ann]

I decided to go ahead and inquire about getting a modification on my first mortgage (not reaffirmed) and today was emailed the package to be filled out. I have a few questions about some of the docs that were sent and a question about the standard 31% mortgage debt to income ratio.
1. If our mortgage is within the 31% of our income will we automatically be denied?
2. If they are requesting us to sign to release of a transcript of our 2008-2010 tax returns why must we still fax our last 2 years of returns with all schedules? Am I missing something here? This makes no sense to me.
3. Since I have not paid my 2nd mortgage in over a year will this have any affect on their decision to approve us?
4. Am I correct in not worrying about any reaffirmation wording since it was never reaffirmed before our discharge?

I was told today that if we are denied the HAMP (I'm certain we will not be approved) we will be considered an "in house" mod. Does this sound right? I'm so tired of trying to get a settlement from our second I really dont want to fight with our first. Any advice and answers to my questions would be very much appreciated! Thank you so much!

[sh9730]

Although there is not a lot of information out there on modification success for those of us that have been through BK (I just was discharged and trying for a mod now) there is another LARGE forum that really has a lot of specialty about modifications whereas this board has many more BK experts.

Do a google search for "loansafe" since Im not sure about the policy of posting links here.

[Pandora]

1. If our mortgage is within the 31% of our income will we automatically be denied?

2. If they are requesting us to sign to release of a transcript of our 2008-2010 tax returns why must we still fax our last 2 years of returns with all schedules?

3. Since I have not paid my 2nd mortgage in over a year will this have any affect on their decision to approve us?

4. Am I correct in not worrying about any reaffirmation wording since it was never reaffirmed before our discharge?

I was told today that if we are denied the HAMP (I'm certain we will not be approved) we will be considered an "in house" mod. Does this sound right?

Answering in order:

1. Yes - you have to be over the 31% threshold and that is gross, not net.

2. Could be lender's policy to ensure they get them - also to jump start some things. I however, would not fax my tax returns for the simple common reason that faxes arent secure enough for my taste. YMMV...

3. No - just because your 1st offers to modify doesnt mean the 2nd will nor do they have to.

4. That's tricky - generally a mod does not bind you to the loan if its been discharged - however it really will depend on the documents they send. Some lenders get tricky and avoid putting the "discharge BK" statement on their mods. Double check with your lawyer prior to signing anything if you dont see the standard BK blurb (i.e,. does not constitute reaffirmation).

5. Depends on the lender - again generally if not approved for HAMP the next step would be in-house mod. BE CAREFUL with in-house mods though, many carry fees / penalties that are not allowed in HAMP. Also, if you're not behind on your 1st they will more than likely tell you to need to be behind in payments to get approved. The question then becomes why would you take the risk of a foreclosure just to modify your 1st mortgage by falling behind to get a mod? Simple answer is..You dont.

if you're trying to mod the 1st due to it being unaffordable, you didnt reaffirm it, so there is your out. On the other hand, if you're trying to mod your 1st in order to push your 2nd into settling or modding their terms - again, there is no law that states they must do so. From what I remember of your case, you have PNC as your 2nd lender and they are very very hard to work with (we are with PNC as well)

[Pandora]

there is another LARGE forum that really has a lot of specialty about modifications whereas this board has many more BK experts.

Do a google search for "loansafe" since Im not sure about the policy of posting links here.

Word of caution - if you google around there is more than enough info to give one reason to pause before posting / taking any advice from there - including anything that has to do with something called a REST report being a possible scam "allegedly" *gotta put that for obvious reasons). Read, read, then read further...

Dont say you werent warned...

[tightrope]

1. If your 1st mortgage is already below the 31% of your gross income then you do not qualify for HAMP, and any chance for an in-house mod is slim.

2. You fax your last 2 years of returns so they can look at your financials and possibly start the mod process if you qualify. You sign the 4506-T request for tax transcript form in order for them to check and make sure that what you faxed to them was correct and true, and for future audits.

3. No.

4. The likelihood of a lender modifying your loan without a reaffirmation is slim.