Received Acceleration warning (Notice of Intent)

[ssmdem]

Last payment to Chase was in April. Just received the acceleration warning in the mail today. We're in Florida and was hoping this would really drag out - but is this a serious step on their part that things might actually go faster? I have little hope, but do plan on at least trying for a modification. I feel like we will eventually need to foreclose - but would really like to be able to last here for two years because of school issues with the kids - if it at all possible. If a modification makes that possible, then we'll worry about foreclosing later. I'm almost positive they aren't going to get it down to a payment I can afford though - so was at least hoping the foreclosure process would drag out. Maybe at least applying for the modification will slow them down some anyway.

So - is now the best time to call for the modification? The letter is implying that they are willing to discuss it at this point, as well as short sale, deed-in-lieu, etc.

Any idea how far we may be into the process now with this notice?

[SMinGA]

I know nothing about FL & their processes, but no harm in calling to ask about a mod. Whether it be a stall tactic or something you really want to work hard on - either could be to your advantage. At this point though you are only 'past due' for May & June. I'd wait at least til the July payment is late. They can't do much in 2 weeks afterall.

[ssmdem]

I know nothing about FL & their processes, but no harm in calling to ask about a mod. Whether it be a stall tactic or something you really want to work hard on - either could be to your advantage. At this point though you are only 'past due' for May & June. I'd wait at least til the July payment is late. They can't do much in 2 weeks afterall.

True - it was due on the 1st - late on the 16th I believe.

[Pandora]

wow - they're being aggressive if you're only 2 months behind and they're already sending out the intent to accelerate letter.

I'd apply for the loan mod and get that going now - no need to wait any longer, you're already late on your mortgage as it is and you needn't even be late to qualify for a modification. We werent late, but hubby did lose his job and that in itself was imminent default, so we got lucky there, and were finally approved for HAMP at the end of January/early part of February this year. Nightmare in itself, so be prepared.

I think SMinGA is going for an in-house mod - so she can probably answer questions regarding that process. I know others who have gotten in-house mods, but that too is a nightmare process, just like HAMP. Either way make sure you know the "rules" to the game the lenders play and try to stay one step ahead of them. Its a long, stressful process - but worth it in the end if you can get the mod permanent. Our mod. payment is 50% of what the org. payment used to be for the first 5 years, and come year 8 when it locks in at 5%, it will still be less than what we were paying for the 1st to begin with by nearly 400. a month.

[ssmdem]

Either way make sure you know the "rules" to the game the lenders play and try to stay one step ahead of them. Its a long, stressful process - but worth it in the end if you can get the mod permanent. Our mod. payment is 50% of what the org. payment used to be for the first 5 years, and come year 8 when it locks in at 5%, it will still be less than what we were paying for the 1st to begin with by nearly 400. a month.

Okay - what kinds of things do I need to be on the lookout for? I've read paperwork frequently gets "lost" and they claim they never got it - so I'm prepared to have it scanned and ready to fax on a moment's notice. Anything else I need to be prepared for???

Our payment now is $2800. We need it down to about $1500 in order to make this affordable for us -- even just a few hundred more makes it iffy, so $1500 is really our target. I know that's asking alot - which is why I'm not having alot of positive feelings about this. But I'm willing to try.

We're going to try for an in-house mod first. My husband has actually already talked to them about it several months ago before we were past due, and the guy point blank told him, "If you expect to get approved, you really need to be behind on your payments. They're not seriously going to look at it until you are."

I think this month is our best (if not only) chance of getting approved. I did lose my main job back in October and husband's hours have been cut - which is the reason we just can't swing the mortgage anymore. However, June was the last month I will receive my second job's paycheck for several months - and I think once I am no longer receiving that, they aren't going to touch it because we will have a serious negative amount of our debt to income ratio. Good for our bankruptcy issues -- but not so good for a chance of modification. If we can't get it now, there's no point in us trying for the modification until around Christmas, and by then, it will probably already be too late anyway to save the house.

I'm ready for the hassle -- just want to know where I need to stay one step of ahead of them.

[Pandora]

first - you need to know who owns your loan and who its backed by. Example: our lender was PNC, but our loan was backed by Fannie - so HAMP was first.

second - whats your ratio right now? Are you above 31% of your gross? HAMP requires you to be above 31% of your gross to qualify, and in-house doesnt seem to matter if you're at or below the 31% allowance, as well as they most times, go off of net vs. gross and account for your other debts whereas HAMP does not.

third: and most importantly - know how HAMP works, as in-house usually follows suit with the guidelines. First they try to do the waterfall rate (2%, 3%, 4% and 5% fixed), if that doesnt work, then they extend out the terms of the loan. If neither of the above work then they can add in a forbearance to it all, however - it all rides on if you can afford it long term at the final 8 year mark onward. If you cannot afford it after year 5 when the 2% adjusts to 3%, then there is no sense in even trying to keep the house. Many in-house follow HAMP, but some very lucky people are getting fixed rates immediately with in-house mods - but the terms arent being extended out in some cases, yet are in others. The tricky part is the forbearance. There are some people that are accepting the mods thinking that they're getting a great deal, when in the end, the balloon payment will end up being nearly what the actual mortgage was to begin with! We got lucky - our balloon payment is less than 15K at the end of our loan (at year 40). Some are getting in-house mods that they think are good and extended, but the payment is based on 30-40 year note, but its payable and due within 15 years. Its all very complicated and unless you really understand what you're getting into (or have someone else that does) - be careful before you agree to sign anything.

We knew before we even got approved that if we couldnt afford it at year 8-40, we were walking away because there was no sense in keeping a house for only a few more years just to have to have it foreclosed on anyway. So you need to ensure you know that upfront - can you afford it long term. Also know that the price they give you for payment can and will adjust as the escrow adjusts, that is not fixed so your payment at any time even in the first 5 years can go up if your real estate taxes go up.

Fourth - know that if its more profitable for the banks to foreclose on the house, they will - irregardless if modding the loan is better for you or not and that you can afford it. They arent looking out for your interest, they're looking out for theirs.

Along those same lines - if you have a 2nd mortgage, make sure that you can strip it off in a BK - else you'll end up in a situation where they can foreclose years down the line even if you get the first modified. Once you get equity built up again (even it 25 years later) - the 2nd can still come back and foreclose on you, there is no statue of limitations on a situation like this unfortunately. This is why you strip off a 2nd mortgage if possible.

We did not fax anything - we sent everything Certified Return Receipt Requested and even Overnight Signature in some cases. It paid off in the end because I dont know how many times we were told "We never received it, you never sent it..blah blah blah" and I had signatures and a tracking number and schedule saying they did. So there was no arguing the point - we even recorded conversations (ours is a 1 party state, so they didnt have to know we were recording, but make sure you know your laws before you record anyone). its alot of work, but worth it as I said if you can get it modified.

[ssmdem]

Thank you so much. I appreciate your help.

How do I find out who the loan is backed by? Chase is the lender. We built the house, and the mortgage was converted over from the construction/perm loan at completion.

We're at 55% of our gross right now and for the next several months. Last month, we were at 48% with that last final paycheck I received. If we go in-house, I feel like we need to use this past month's income, so it looks like we can better swing this since I know they factor in expenses. Should we just start there and see what they say and then move to HAMP if declined?

We do not have a 2nd mortgage on the house, so stripping that lien is not an issue.