Question about Hamp mod

[indebtbad]

I am currently 3 months behind on my mortgage and just got a notice of foreclosure today. My current interest rate is 8% My lender sent me a packet for a loan mod and want to meet me in person. I have to file BKK on my credit card debt but haven't done so. They are 3 months in the rears as well. Last year I made 20K (girlfriend and roomate paid most of the bills, but house is in my name, both are gone) this year I stand to make around 30K with a second job I picked up.

Long story short, on my 20k income would it be enough to qualify for a HAMP or other type of mod on a 99,000 loan? If so it would be cheaper than renting! Especially since I just picked up another roomie. Thanks in advance for any responses. Also does anyone know the timeline in Indiana from Notice of default to actual foreclosure?

[HHM]

What is your mortgage payment supposed to be?

With income of $30K, you might have a shot, but at $20K, it will be tight. The basic guidelines of HAMP are that your monthly payment cannot exceed 31% of your gross monthly income, at $20K per year, that is $516 per month. At $30K per year, that is $775. So even if you got a mod that put the loan at 30 year fixed (30 years from today) at 5%, the payment would be north of $530 per month (not including tax and insurance).

The other problem, is you may NEED the BK in order to qualify. As it stands right now, since you have other debt, you won't likely get approved because your front-end debt load is too high.

No harm in applying as it may delay the foreclosure, but you have a chicken/egg problem. You are already in foreclosure but "might" be able to pull off a mod if you had no other deb, but to have no other debt, you need to file BK and do so while your home is in foreclosure and "hope" the bank will work with you after the BK (many will, but there is no guarantee). If the extra income is from having a roomy, I doubt you will get a mod. I think you best start making contingency plans for losing the house WHILE working toward a modification.

[IBroke]

With a HAMP-mod, they would calculate your initial modified monthly payment at 2% interest (not 5%), so you might have a shot - especially since HAMP can run as long as 40 years. If that's still not enough, they can still forbear a part of your loan-amount to make it work with your gross income. The only obstacle left would be the NPV-test (to check if a mod really pays off for the lender/servicer).

It also depends how much tax & insurance you are paying on that property because this amount is included in the 31% as well, reducing the amount available for principal & interest.

[SetMeFree]

Do you think it is best to file BK (In my case chapter 7) first then apply for the HAMP modification? They will look at the BK as positive because of debt reduction correct? I have 50k in credit card debt that will probably blow my chances for a HAMP MOD unless I file BK first.

[helpme2010]

I was successful with 2 HAMP loan mods, which were each a 6 month forbearance plan. They dropped my original 2k a month mortgage down to first around $1000 a month, which included my escrow, then 6 months later bumped it to $1500 a month (the 3rd was going to be $2100 a month and that is when I filed bk). My only income was $1900 a month unemployment insurance and I managed to qualify. But I had to go through an insane amount of repeated paperwork, calls to my mortgage company, and more. I also had 20% down on my home and was a homeowner for nearly 20 years. Not sure if all of this factored in or not.

I am attempting another HAMP 6 month forbearance plan mod again on unemployment and post-bk, not sure my odds are good, but it's worth an attempt.

Good luck.

[HHM]

I was successful with 2 HAMP loan mods, which were each a 6 month forbearance plan. They dropped my original 2k a month mortgage down to first around $1000 a month, which included my escrow, then 6 months later bumped it to $1500 a month (the 3rd was going to be $2100 a month and that is when I filed bk). My only income was $1900 a month unemployment insurance and I managed to qualify. But I had to go through an insane amount of repeated paperwork, calls to my mortgage company, and more. I also had 20% down on my home and was a homeowner for nearly 20 years. Not sure if all of this factored in or not.

I am attempting another HAMP 6 month forbearance plan mod again on unemployment and post-bk, not sure my odds are good, but it's worth an attempt.

Good luck.

I wouldn't call that being successful, the temporary forbearance is just that, temporary. You have yet to get a permanent modification which is the issue here.

If your income is really tight, then yes, getting BK done first helps because it clears up your front end debt load and makes the number work better. However, it is risky because a modification is a privilege not a right. The bank can decide they don't want to give you any modification after a BK (however, HAMP guidelines do requires banks to consider mods even for those that have filed BK).

[helpme2010]

I wouldn't call that being successful, the temporary forbearance is just that, temporary. You have yet to get a permanent modification which is the issue here.

If your income is really tight, then yes, getting BK done first helps because it clears up your front end debt load and makes the number work better. However, it is risky because a modification is a privilege not a right. The bank can decide they don't want to give you any modification after a BK (however, HAMP guidelines do requires banks to consider mods even for those that have filed BK).

HHM, thank you for responding, I appreciate that. I have a question. If I get approved for another 6 month forbearance plan and end up walking away from the house in the middle of the plan or even after the plan, am I responsible in any way for a new mortgage, or does the mortgage company simply continue with the foreclosure and I am done.

I did not reaffirm the mortgage with my chapter 7 discharge. So I am assuming I am free and clear of the mortgage. But if I sign up with a new 6 month forbearance plan, does this obligate me to an entirely new loan responsibility?

I am trying to buy myself more time in this house. I don't mind making rental payments or even a reduced set of mortgage payments to stay here longer, until I can find a job and then find a place to rent.

[HHM]

A temporary forbearance really shouldn't trigger any sort of new liability, any such argument is a stretch. So, you should be okay to walk.