Finally Heard From WAMU

[napamac]

Finally after 4..5 months, we received an offer from WAMU without any phone conversations to clarify any possible qualifying issues ...

It consisted of the classic 3 month reduced Trial Plan (@ 51% of income including Unemployment Insurance - which will not continue much longer).
If after 3 months of current payments they will reevaluate for a workout solution to bring the loan current ??? That's big of them . . . And, this agreement would probably have some impact on our future responsibility for the loan ???

Since we are under water by 150K I am not sure this makes any sense whatsoever. Our home is valued at 400K+/- with a WAMU/Chase 1st of 502K and a private purchase money 2nd of 54K. We have refinanced our 1st with no cash out 2 years ago. Realtor stated that it's not likely to sell above 400K and we would need at least 600K+.

I will contact them on Monday and discuss a principle reduction which they will more than likely refuse, leaving us with an eminent foreclosure, unless you can shed some light on an alternative.

Thank you for any assistance

[cliffdweller]

Hi Napamac,
It sounds like you have a WaMu-owned loan (not fannie or freddie backed) like I do because I received the same or similar letter. The only encouragement for me was a line that said, "If all payments are made as scheduled, we will reevaluate your application for assistance and determine if we are able to offer you a permanent workout solution to bring your loan current." I took this to mean putting the arrears on the back of the loan, and coming up with a lowered interest rate, but am not sure. I am making my last trial payment next week, and will then begin the process of re-submitting paperwork to be considered for a permanent mod.

There is a Net value test or something posted on this forum that is helpful. Have you seen that? It is supposed to give you an idea if you "pass the test' as being a modification candidate vs. a foreclosure candidate. I believe Maxie19 posted it.

Wish you the best. I will keep everyone posted on what happens with our journey.

[napamac]

Thanks cliffdweller for the response . . . I would be interested to see what they do for you next week so do keep us posted.

In my situation, the payment plan is not much less than the payment and as I do not have a job yet, it will still be difficult to make the payments. So, they may just disqualify me right from the start if I do not agree.

And then there is the question if we do go with the Trial Plan Agreement will it disqualify us for any exemptions ... because there is a clause that states in part "WAMU may elect to take any and all actions necessary, including but not limited to voiding this agreement, filing a motion for relief from the automatic stay or motion to dismiss or any permitted state law remedies" ... ??? If anyone has any input regarding this it would be appreciated before I decide to accept their agreement.

Lastly, I understand that in CA, the foreclosing bank is allowed to only take the property and not go after the borrower/s. And the 2nd lien holder eats their loan, especially if it's a purchase money 2nd. Then there is the question of the 1099 and taxes ... again my understanding for CA. is that taxes are waived if it's purchase money and/or any refi's without taking cash out. Any confirmation on these issues would also be appreciated.

Thanks and best of luck

napamac