loan modification...

[mickeysfriend]

I'm getting ready to send in my mod paperwork. I have some concerns though. From what I understand, most modification agreements are for 5 years and then your loan goes back to it's original agreement...is that right?

what happens if in 5 years, you still cant afford your original payment?

we 'could' live here for 3 years during the modification until we would qualify for a new mortgage loan (we're filing a chapter 7), and hope to sell it during year 4, but what if it still wont sell for what we owe? Right now we owe $331,000 to Wells Fargo for our first and $42,000 for our second, with the current value at $375,000. so, no equity.

I'm just not sure it makes sense to even try to get a modification, but then a lot of this doesnt make much sense to me anyhow.

if modifications are for 5 years, what on earth is going to happen to everyone that is getting them at the end of the 5 year period? is anyone else seeing a major problem with that in the future?

[hereforinfo]

From what I understand, there really are no standard terms for the modifications and whether or not the rate will reset and when. It really depends on the lender.

I think you may be referring to the guidelines of Obama's plan, where you may get a really low rate for the first year. The rate increases slightly each year until the 5th year, where it caps out at something like 5% for the rest of the loan term. In that program the loan doesn't necessarily get reset to your original rate.

Some lenders are doing their own modification programs, as they are not required to participate in the government's plan. They can offer you any terms they want, there is no standard. I have heard of people getting a lower fixed interest rate for the life of the loan. Some lenders may offer a temporary rate reduction that would reset to the original rate in 5 years, or even to a lower rate. Others aren't offering much more than to defer the past due amount on to the end of the loan.

All you can do is try and see what they offer you. You could be one of the lucky ones who ends up with a low fixed rate. But even if it's only temporary, if the new payment is the same or less than what you'd pay to rent another house, then you have nothing to lose. You are fortunate to not really be under water by much.

[eddiep]

I guess Obama doesn't plan on being president in 5 years when all these loans reset Just kiddin! Are you done with your bk?