Inland Empire California

[sdsumann]

I thought, before either I attempt to speak with my lender on my own or obtain representation for loan modification I would ask on this forum what are my realistic opportunities for loan modification and at what terms.

Background I purchased a house 2 ½ years ago for $675,000 with a loan balance of around $540,000 30 year fixed at 6.25%. We have had some hardship as I am since purchase of this house I have taken an exempt (meaning no overtime) job at my employer. This was fine the first year as the bonus paid to employees was very good. This year no bonus and raise freeze went into effect. We just had our second child (my wife works as well but has been off for the prior 3 months on disability) we pay into disability for her (not state or federal run) and are being paid at a lesser rate (60-70%) last month was the last month of this then regular pay will begin again.
My lender is suntrust and I have not seen much success with them on this forum. Starting next month my childcare expenses will double (which was all right with the bonus and raise but will be very difficult to make the mortgage now).
My house value per zillow.com is 433k (they are selling a house on short sale for 350k across the street don’t think the bank will approve that amount).
Here is my income for family:

Around 5k gross per month
My wife 5,400 gross at full pay.

Current mortgage is 3300 for the mortgage and 700 for property taxes and insurance (not an impound account).

What expectations should I have from suntrust to work with me to keep my home and work on the terms of my loan. (3% rate? Principal reduction). Would a 2300 mortgage + property taxes and insurance be out of the question?

Any thought or insight would be greatly appreciated.

[Paul Molinaro Esq.]

NO LEGAL ADVICE HERE - JUST GENERAL INFORMATION - ANY SIMILARITIES TO ANYONE'S ACTUAL SITUATION IS JUST ONE HECK OF A COINCIDENCE.

"purchased... 2 ½ years ago for $675,000 with a loan balance of around $540,000 30 year fixed at 6.25%"

Bought at height of the market and put down a down payment, and even got a decent loan... although the tried and true way to buy real estate that has now proved to be quite costly. The down payment is gone.

"We have had some hardship"

A hardship is needed for loan resolution.

"lender is suntrust"

Okay. Not great but not bad.

"value per zillow.com is 433k"

Try cyberhomes.com for a lower estimate... Zillow runs high and Cyberhomes may be low, but B of A runs Cyberhomes, so more and more people see it as more accurate.


"What expectations should I have"

A reasonable expectation is NO balance reduction.
A reasonable expectation is a much better interest rate.

- Paul

[sdsumann]

Thank you for the insight. Would an increase in expense (ie childcare) or a temporoary decrease in salrary be considered enough hardship for consideration of an interest rate reduction say down to 3.0%?

I work in the insurance industry (claims) and deal with defense counsel all the time so I understand your only speaking in general terms and are not speaking with respect to my exact situation.

[faith]

Welcome to this forum,
You need to write them a letter and let them know tha you are in financial hardship and explain what your hardship is loss of income, disability, family etc.
Please click the link below for examples of financial hardship letters.

Examples of a Hardship Letter

Some more tips:
1) Write down every idea that pops in your head about why you can't afford your house. Why are you having financial difficulties. Loss of job, medical bills, increased property taxes, child's college education tuition, divorce, credit card debt, etc. Write every possible thought that has any affect on your financial situation or your wanting to get a loan workout. It doesn't matter what you write down. Don't think too much, just write whatever pops in your head. Sit and write until you have at least 5 ideas. If you don't have 5, you're thinking too much. Just write whatever pops in your head.

2) pick the most obvious ones that have the most affect on your financial situation and ability to make payments on the home. Look at the list as if you were Countrywide, or Washington Mutual, or your specific bank. Which hardships would you look at as the most crucial? Once you select 3 or 4 hardships, focus on them and explain exactly why they are affecting your ability to make payments on the loan. (For example: I was laid off on Sept. 27 and as a result, my monthly income has decreased by $2,100.)

3)Rule # 1, make your hardship letter less than one page paragraph form. Loan workout department reps look through many letters. They don't want to be reading a novel to find out why you can't afford your mortgage payments.

4) Line 1: At the top of the hardship letter type your bank's name that you are requesting the loan workout from. Line 2: put their address. Line 3: type their phone number and fax number. Skip a space. Line 4: type the date. Line 5: type "RE: Request for Loan Workout - (Your Loan # and Property address). Skip a line and start your letter with: "Dear (Bank's Name) Representative

5) Mention what change took place why you can no longer afford your payments. Keep it brief and simply let them know that some change happened between the time you bought the home and now which has affected your ability to pay your mortgage loan. Ex: "There has been significant changes in in my financial situation since I purchased my home in October 2001

6) 2nd paragraph: State why your area is bad. Ex: "My property is located in ______ town. The taxes have increased, property values have declined, there are 5 foreclosures on my street, etc." List any bad circumstances for your specific location that support your case for a loan wor

7) List any of the following and explain using details and specific numbers as best as you can.
• wrong doing by mortgage loan broker, bad adjustable mortgage loan on the property.
• hardships (income I depended on is no longer available, increased bills, inability to work due to health or disability, etc. - from your brainstorm list).


8)Final paragraph: Clearly state that you "cannot pay" and need to negotiate a loan workout. You don't have any other options available. Leave your contact info or your agent's contact info if they require further information.

Sign, date, and give to your lender or bank.

Hope this helps