I am new to this forum and while am saddened that so many are struggling like I am, I am encouraged by the support here and thankful to all who take the time to post.
My story in brief.....we owned a small construction company which was dealt a severe blow by the downturn in the economy. However, we have been blessed, as my husband recently was hired by the fire department (job security!!!), but his starting salary is about 40% of that which we enjoyed we times were good in construction and as a rookie, overtime isn't an option for him right now. As
CW constantly asked this question....I should add that I don't work as I have 4 young children and the cost of childcare would exceed that which I would make.
We absolutely cannot afford our current mortgage and have not made a payment since 11/2008. I have been talking (or rather banging my head against a wall) with
CW since the beginning.
CW referred us for help under the HOPE program and we submitted the paperwork immediately. Was advised it could take up to 90 days for a decision....I called weekly to followup, spoke with a different person everytime. Finally on March 12th, my call which was typically transferred to collections went to loan counseling....I was thrilled. Only to receive the news that we were DECLINED. They claimed that no matter how they worked it.....it didn't fall within the 31% range of my husbands salary. They said a Notice of Default would follow shortly.
So after reviewing all options, with the help of my parents, we retained an attorney on 3/18.
Now, coincidence or not......on 3/23 I received a FEDEX package direct from
CW (attorney new nothing about this), letter dated 3/20 offering a loan modification agreement.......it is what they call a STEP RATE program and offers an 10 year interest only option, whereby the rate slightly increases over the next 10 years from 4.5% capping out at 7.1% which is our current interest rate. Furthermore, it tacks all past due payments to the back end of the loan and our 1st payment would be June 1st. We have until 4/20 to respond.
Now, knowing that my husband has a secure job, whereby we know that our financial picture will be drastically different in years to come....this is a bandaid solution and one that can keep us in our home and something we can work with (if you forget how upside down we are). On the flip side....a 10 year interest only loan????? I don't get it!!!! Never mind the fact that we owe about $200,000 more than current market value. I am not sure what to make of this at all. Totally baffled......denied one day (and I have the letter to prove it) and 8 days later this!!!!
Anybody else see a STEP RATE modification or have experience with them?
Thank you!!!!