my predicament - Wells Fargo loan modification

[cantilever]

I wanted to share my situation with that hope that someone out there can help. I was just denied my loan modification for some unclear reasons.

Background:
Home loan amount: $500k (1st mtg), $60K (2nd mtg)
Bank: Wells Fargo (both loans)
Current property value: $350k
Hardship: Loss of ~half income (wife pregnant, expecting first baby in Sept - will stop work for a couple years to raise child)
Debt:Income ratio: -$400-$500/mo (after baby comes)
Loan type: Conventional, not owned by Fannie Mae or Freddie Mac

I submitted my hardship letter, debt to income schedule, and documentation in early March. Received word a couple weeks ago that the modification was denied. The reason: "Against investor guidelines".

Naturally, I called Wells Fargo and spoke with somebody from their loss mitigation dept. The way the first person described it to me was: "Sir, we can't help you because you're current on your payments." So I asked if I were delinquent, would that help and the answer was yes. I asked the person how this can possibly benefit anyone since it seems counterintuitive to make matters worse by missing payments. It seemed like a lose-lose situation for everyone. Be she still told me in order to get things done to start missing payments. I didn't buy it.

I called again and they transferred me to the negotiator who was in charge of my case. He told me that they used a surplus deficit (net income vs. debt) to determine the file. It showed that I was more like $1,500 negative monthly. He said that I can't even show affordability with a modified loan. Then he elaborated on the "against investor guidlines" statement in the denial letter. He said that since my loan isn't owned by Fannie or Freddie and is owned by a private investor, Wells Fargo is not modifying these loans. He said that there are have rumors or talk about the implementation of modifying this soon.

So now I'm stuck. I have a way to show more income to get the debt/income ratio more toward break even but I'm not even sure if what either person has told me is true. They also said my file is closed and that I would have to go through the whole process again. I'm considering seeking professional help - any insight on my situation would be greatly appreciated. Thanks.

[cantilever]

I forgot to mention that I am looking to do. I want to modify the loan so that it becomes more affordable by either reducing the principal or drastically lowering the interest rate. I have a 30-yr fixed at 6 3/8% right now (I know it's not a bad rate).

I'm not looking to ruin my credit or dump the house. I'm going to stick it out because I feel foreclosing will add to the problem, not the solution. Thanks.

[Mandy]

I am very upset with them too.

Look I have been in the process since Feb 2009. I am still waiting, yeah right. I have contacted many departments and nothing. Only thing new what that I got a letter (FEDEX) where they asked for more information before July 3, send it out, haven't heard anything!!!!! I keep on calling the lady that send me the letter, but she does not answer my calls........ I was told by the LOSS MITIGATION dept., that my loan has been escalated, that is about it. I am only one payment behind. NOTHING.

My brother is also with Wells Fargo, he is not behind, he called every week and just today he was told that he will be getting an application for the OBAMA Plan.....

So now what?

I am ready to send an email to one of those executives and tell them about my situation......

I thought that the Loan Modification where for the people that needed help. My husband lost his job since Oct. 2008 and I just had a baby, but I went back to work. Currently, I am not working since I am a teacher....

[mimat2]

I have not seen a homeowner who got a favorable result trying to negotiate with loss mitigation department by themselves. Like everything else, and especially with Loan Modification, there are guidelines, and numbers, that must all fit together (so that the most favorable outcome is for .....the INVESTORS). Giving all your numbers (income, expenses.......) to the banks without careful massaging them, make your file not fitting those guidelines..... True....there are no winner in a forclosure, but the latest statistic is that 70% of homeowners who got their loan modified, fall back into defaulting their loans, costing INVESTORS more money. So even with all the pressures from President Obama and Congress so that banks need to accelerate their progress with the Home Affordable Program and banks which modify their loans so homeowners can save their homes do get incentives from the federal goverment.....somehow they still are not pushing for success on this program. Therefore I suggest you get a good Loan Mod company which can go back and MODIFY your application FIRST, and resubmit. Since your house is upside down so much, have you consider short sale or short pay yet. Also a good Loan Mod company will try to get a principle reduction also, though statisticly, according to Treasury Dept., only 2 or 3% got both. Good luck to you and I will be more than happy to share with you what I know.

[SillyWorld]

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