Help---do i pay or walk in cal -sale date 10 28 09

[shaytala]

Here's the facts: Had a loan on property purchase in 2004. Papers as to adjustment date were wrong...instead of pmt going up $300 per mo I was notified pmt jumping $1,000 per month. I did a new loan but only one I could get was a neg am loan.

Property now worth about $340,000 and bank says I owe 450,000. They've offered me trial mod at $1430 per mo beginning 11/1/09. The loan is a HAMP loan...investor is WaMu.

(I called to verify this today as one of the many calls I made to "loan modification" people outside Chase told me to ask that since they say many that are not HAMP loans (and not Fnma or Freddiemac) don't have any chance of getting a mod approved by the investor who owns the loan...even if the bank says yes.)

In trying to find out "my chances" at the 4th month of getting approved when I talked to a local Chase rep here in San Diego on Friday....his comment as to my getting the final loan mod was "it's a roll of the dice"!

So I'm trying to decide if I want to spend $4500 to take that chance and wind up owing on such an amount over what the property is worth? Also, even though the bank will obviously be putting me at a lower payment initially I would think there has to be some type of graduation in the payment but they won't say.

And lastly, Chase and anyone I've talked to says they WILL NOT LOWER the principal amount due UNLESS they have 1. lowered the interest to 2% 2. extended the time to 40 years and you are still not under the 31%...only then will they adjust the balance.

My reason for hanging on to the house would be future appreciation down the road...way down the road. I am over 55 and moved my tax base to this house so taxes are only $2000 per year. If I got the loan mod as soon as I was approved I'd move out and rent the house and go find a roommate and a rental at much less monthly payment. I can easily rent the house for 1800 per month...it's 3/2...3 car gar....upscale neighborhood..

I've got just a couple of days to make my decision so all thoughts would be appreciated.

Also, if I do let it go to sale.....do I have some time to get out? I've been told 30 and max of 60.

[exhausted girlfriend]

shaytala,

It just depends on how much you want to keep the home. I will caution that it is likely the trial payments could last a lot longer than 3 months. I am about to pay 7th month on Nov 1. Personally, I think those on this forum who have gotten verbal modification approvals and are awaiting paperwork, will eventually get the paperwork. It just takes time.

[shaytala]

Is your loan also with Wamu (Chase)? And are you saying that you are paying in the 7th month...4 months beyond your 3 month trial? Do you question whether you will ultimately be approved or not? One of my major concerns was whether I wanted to pour money into something I wasn't going to get to keep.

From the standpoint of letting it go to foreclosure...it was the only way I could force the issue of a new loan and getting out from under the neg am.....my financial picture has changed so I could not walk in a bank and qualify for a new loan under regular rules.

I guess I was looking for input as to whether keeping the house made "dollars" sense or not. Aside from that I'm not attached to the house and have actually decided I'll enjoy being closer to the hub of San Diego activities if I relocate.

[exhausted girlfriend]

Shaytala,

It doesnt make financial sense to go throught the trial mod process if you arent planning to keep the home. I have decided to keep my home in spite of the loss in equity because I realize that real estate is cyclical. I can't predict the future, but I do know that if i keep the home in my name, whether we live in it or rent it out in the future, one day it will be paid for and to me that is a value. As for paying for the trial payments and risking not being approved, We have gone 16 months in our home without paying a mortgage. I think the least we can do is give this a shot and hope and pray for the best outcome.

Also, I dont want the bank to come after me later in life for hundreds of thousands of dollars and do not have a home to show for it.

Lastly, we do have children and feel that it is more stable to live in a home you are owning rather than renting. For us taking the chance to have a mortgage modified at a great low payment and interest is worth it. (i see it as a once in a lifetime opportunity, as we made mistake refinancing and may get an opportunity to be pardoned).

Once you put your pros and cons on paper, that may help you make that decision. Even if you decide to do the trial, and decide later, you would rather walk away, you should be able to stall foreclosure for a while, so that you can pocket some cash to make your next move.

[shaytala]

You didn't say...who is your mortgage with? I have only gone 8 months no payment and as I said sale is next week.

What you touched on was the fact that re is always going to go up and down and that is probably the one reason I'm trying to decide should I hang onto the house?

[exhausted girlfriend]

My mortgage is with Chase. The way i see it, my values cant go much lower, then it can only go up. I am in Florida. Wow, next week huh, i say you accept the trial so that you can still have options, if you decide to walk away now, you cant change your mind down the road. Besides, with the way things are going, who knows what other "programs" may come down the pipe. Look at my story on the thread "Working on Mod since April 2008".

[shaytala]

Do you have any idea what your payments would be...mine on the trial are 431....however it's on a mtg bal of 450000....so they have to build in a graduated payment or something. I talked to someone yesterday that said her mom got payments set for 3 years and then will adjust up.

Just and FYI: It is my understanding that in the state of California if the bank does a non judicial sale (not through the court) they CANNOT come after you for any deficiency.