Received Mod docs from Chase to-day!!!BAD!!!BAD need help desparate

[kassa07097]

I am 57- after 6 trial payments received mod docs today need to rely by Oct 31st. Orig loan amt $365,000 @ 5.75% 20 yr amort. Mod terms, 2% on $260,000 for 5 yrs and 3 and 4 and 5% from 20 to 40 yrs so amort increased to 40 yrs. Yes payments have reduced but the catch $90,000 bal payable at the end of 40yrs with accrued interest. Mortgage is not assumable. I will die way before all this is said and done. I cannot afford to lose this house I have 3 girls who were born and raised here and come visit us frequently and no way I can tell them or even ???? house is worth 250 to 275,000. I need solid sound advise Please time is of the essence

Thanks
Kassa

[heidi79]

The reality is that you will probably not get any better offer, interest rate or terms on the loan, any other in-house modification will not give you those terms.

they put the 90k baloon payment at the end in order to lower the monthly payment so you could afford it. you are one of the lucky few in thousands of people that are fighting for that permanent modification to come!

[Stuart C]

Was this an HAMP mod? Sounds like it except for the balloon payment. That's not how they are suppose to work.

[Stuart C]

Originally Posted by kassa07097

I am 57- after 6 trial payments received mod docs today need to rely by Oct 31st. Orig loan amt $365,000 @ 5.75% 20 yr amort. Mod terms, 2% on $260,000 for 5 yrs and 3 and 4 and 5% from 20 to 40 yrs so amort increased to 40 yrs. Yes payments have reduced but the catch $90,000 bal payable at the end of 40yrs with accrued interest. Mortgage is not assumable. I will die way before all this is said and done. I cannot afford to lose this house I have 3 girls who were born and raised here and come visit us frequently and no way I can tell them or even ???? house is worth 250 to 275,000. I need solid sound advise Please time is of the essence

Thanks
Kassa

Kassa, please, I really would like to know. The way it's supposed to work is like this. To get you 31% of gross pay, take it as low as 2%, if that doesn't get it there then take the mortgage out to as much as 40 years, and if that STILL doesn't get it to 31%, then they can do a forbearance on part of the principle for the life of the loan.

In other words it means that you still owe the original amount of the loan, but on 90k you pay no interest for as long as you live in the house and don't do a re-fi or sell it. When you do one of those two things, then the 90k from the original loan comes due, but it isn't interest - it's part of your principle you have always owed.


At least that's how it's SUPPOSE to work if it's HAMP.

[exhausted girlfriend]

Wow, that's interesting. You know, if you decide to take the deal you could always send an extra payment every year to knock down that principle balance. (perhaps part of the tax return). If this is the kind of deal they give me, that is what I will do. I am 38 and plan to keep this home in the family, so I am in for the long haul.

[Stuart C]

#10 from Fannie Mae site (don't know about others):

1. What happens if that is not enough to get to an affordable payment?If a 2 percent interest rate does not result in a payment that is affordable (no more than 31 percent of your gross monthly income), your servicer may:
   • First try to extend your payment term. At the servicer's option the term of the loan could be extended up to 40 years.
   • If that is still not sufficient, your servicer may defer a portion of the principal amount you owe until the maturity of the loan. This is called a principal forbearance. However please note that with a forbearance, you will still owe the principal; but repayment is deferred until a later date. See Question 11 for more information on principal forbearance.
   • A portion of the principal could be also be forgiven. This is optional on the part of the servicer. However there is no requirement for principal forgiveness and there is no guarantee that your servicer will offer principal forgiveness
   Could I end up with a balloon payment?Yes. If your servicer determines that a principal forbearance is required to get your monthly mortgage payment to an affordable level, the principal forbearance amount, say for example this was $20,000, would be subtracted from the amount used to calculate your monthly mortgage payment, but you would still owe the money. You would have a $20,000 balloon payment that accrues no interest and was not due until you paid off your loan, refinanced or sold your house
   
   • Making Home Affordable - FAQs

[darkdays]

It doesn't get any better than that in terms of a mod.

[davephx]

Note everything is "MAY" not "has to"

Later updates I believe make the down to 2%/40 yrs required if the NPV test is positive. But any forbearance is still optional and rare.

[Stuart C]

Yes, but I'm just trying to find out if the " but the catch $90,000 bal payable at the end of 40yrs with accrued interest" is right or not. I don't believe it is "interest". It is simply principle that he hasn't been paying on for 40 years at the end of the loan. There is no accrued interest at the end of the loan. I mean it's a &@%$ great deal if they are following the guidelines. If they aren't following the guidelines it would be good thing to know. Kassa?

[briknope]

Take the deal and refinance later. If you are not 100% clear on all the details then take the documents to a lawyer and have him or her explain it to you in plain english. The interest on the 90k surprises me, but if thats what they are offering then take it and stay in the house. You're only 57 so you will have time to stay in the home and redo the mortgage within the next 10-15 years

[Chased around and around]

Originally Posted by briknope

Take the deal and refinance later. If you are not 100% clear on all the details then take the documents to a lawyer and have him or her explain it to you in plain english. The interest on the 90k surprises me, but if thats what they are offering then take it and stay in the house. You're only 57 so you will have time to stay in the home and redo the mortgage within the next 10-15 years

I agree. Take it now and work on it later, we have only seen half of the housing recession to come.

I talked with a guy yesterday who got a 50 year loan. Banks are scrambling to do whatever they can with residential as the commercial real estate collapse is just around the corner. June next year will be a pivotal point with banks and failure...

[smit5454]

I'll swap with you.

Take the mod, and throw a few extra hundred bucks a month towards principal and there won't be any $90k. Or, ylook at it this way. If your home is worth $260k today, with appreciation of 3% per year over the next 40 years it will be worth about $875k. At that time, your daughters won;t mind dividing $875k-90K between themselves.

[shade]

You need to get them to remove the portion that accrues interest on the balloon amount. But the balloon amount is fine, its expected and IMO you should be willing to work with that.

[nativelasvegan]

In my opinion, this is a good deal. The difference between your original loan amount of $365,000 and the new balance of $260,000 is $105,000. I agree with Davephx that the regulations state "may" instead of "must". Let's face it, modifications are hard to come by or most of us wouldn't be here if we already got one. Even though the servicers MAY (1) reduce interest rate to 31% of income; (2) extend the term up to 40 years; (3) forgive principal balance, etc. I do not believe I have ever seen a forgiveness of principal balance. If your main goal is to stay in your home by reducing your monthly payments, that has been accomplished. Most of us here won't get that far. The $90,000 balloon is a loan with interest. Most mortgages these days are not assumable so that is not something I would be worried about. Good luck to you. I am happy you were able to get your loan modified.

[kassa07097]

Originally Posted by heidi79

The reality is that you will probably not get any better offer, interest rate or terms on the loan, any other in-house modification will not give you those terms.

they put the 90k baloon payment at the end in order to lower the monthly payment so you could afford it. you are one of the lucky few in thousands of people that are fighting for that permanent modification to come!

Yes its a HAMP and appolgies no int on the 90 my bad thanks

[evo13]

You got a modification! Go with it! Thats more that we got in 7 months. I envy you. I would take the terms. This is coming from a homeowner who loves their house. GOOD LUCK.

[kassa07097]

Thank you all for the posts, it helped me make up my mind, can't ask for too much more they are taking a short term loss but helps us out, but in the long term they come out to be smiling I guess.
Thanks again to all who replied
Kass

[kassa07097]

sorry forgot to mention there was no int on the 90 "my bad"
Kassa

[Stuart C]

Sounds like you got one heck of a great deal. Glad they did your loan according to the rules for a change. Merry Christmas early!

[briknope]

So was this a partial claim then? Was the loan a FHA loan?

You got a smoking deal with the 90k interest free, IMO.

[snapple candy]

cassa,
I expect also you wont getter a better deal than this. I can only hope I get the same and get a no-interest balloon for a portion. Im 100K underwater and it makes me sick to think of this and accepting a loan mod that includes it all. I still think about walking away as I am awaiting final HAMP loan mod approval and the terms. No matter how you shake it, it will take 5-7 years, maybe more to ever break even and go back into the plus. If I have to move for better employment, I still may end up walking away (or renting it) cuz nothing will change the fact Im underwater. Its a bitter pill to swallow but the price we have to pay to hold on to our homes. The only alternative is finding a shark attorney to get principal reductions which I do hear is occurring but you have to have money to do this and it seems savvu investors accomplishing this.

[gordilox86]

Kassa,

This is an excellent deal.

Not sure who your Investor is? Freddie Mac has instructed their Servicers to "forbear" not "forgive" principal, if after applying 2% then 40 yr term, payment does not reach target payment (Target Payment = 31% x Gross Income).

Your Servicer applied the lowest possible rate of 2%. The Servicer then took your loan all the way to 40 years. These two steps still weren't enough to reduce your payment to Target Payment. So the Servicer "forbear" your pincipal by taking $90k off to tack at end of loan.

In my opinion you should sign the Modification Agreement. After 8 years evaluate your alternatives.

[smit5454]

You lucky Bas$%W#%trd. I am jealous, and will be staring out the window all day every day hoping to see a Fed-Ex guy with an envelope.


Did you get a call from the Executive team right before you got the permanent mod? I got called this week and was told they would look into "why it is taking so long".

[IRAKENJI]

Our permanent mod is a with a balloon payment of $297K - if it was only $90K i'll probably take the final mod but we're not since the balloon payment is so high. We owe $645K and the house is worth $400-420K so we're going to walk away from the terms that Chase offered. We put our house on short sale last week and have a few offers on hand to be presented to Chase.

Goodluck

[snapple candy]

IRAKENJI,

Can you give us more detail on this such as specific terms offered?
It appears the balloon is equal or close to the "underwater" portion of your home. Correct?

I am assuming the balloon is set aside for the lifetime of the loan interest free or until the house would be sold....I know it would be years until that equity would ever be gained.

I am waiting for final terms myself and torn about walking away. It really depends on several factors...how underwater are you and how long to you want to hold onto the house. I am weighing all my options at this point.