Has anyone been approved for a perm mod with close to 100% debt to income

[shade]

Curious if those of you with perm mods are close to 100% debt to income
Basically if all your income is going out the window to credit debt (cars, mortgage, credit cards, etc) and still got approved.

[MyHAMP]

Not yet approved - but certainly past the initial NPV where the DTI is part of. Not sure how much of the actual debt (which is old) is still reported witha balance rather than a $0 charge-off - otherwise, DTI probably 300%...

[shade]

Seriously?
Im talking about your income vs expense each month

So you bring in 1000 and do you have more than 1000 in credit debt?

[litehouse01]

I am hoping that perhaps the in house mod have a little more loose restrictions concerning back end dti? I read a thread on here yesterday where someone going thru the process with bofa was denied because of cc debt and thats the first on I have seen look for that thread and read it.....but we all should have passed the first npv if we are in this trial correct?

[MyHAMP]

Originally Posted by shade

Seriously?
Im talking about your income vs expense each month

So you bring in 1000 and do you have more than 1000 in credit debt?

While it's not just $1000 we have in income, we certainly had a lot more in monthly payments towards other debt (not only CC) than the current income. We use to have fancy cars, many CCs, and our second mortgage is $1150/month alone.

Our gross income is slightly below $4000/month now. Before we lost our old jobs 2 1/2 years ago, it was close to $25000/month, so you can imagine that everything was on a different level in the past. Income went down, debt...well, you know the answer..

But as I said - since many of the debts are old and already charged-off, they can't use them to determine the DTI because they don't show a monthly payment on the credit-report.

[MyHAMP]

Originally Posted by litehouse01

I am hoping that perhaps the in house mod have a little more loose restrictions concerning back end dti? I read a thread on here yesterday where someone going thru the process with bofa was denied because of cc debt and thats the first on I have seen look for that thread and read it.....but we all should have passed the first npv if we are in this trial correct?

That's correct. The initial NPV is one of the first things they need to do.

[lennox]

MyHamp, how long does it take for defaulted CC debt to not show on your credit report? Is it as soon as they sell off the debt to a 3rd party collection agency? Does the 3rd party list it? What kind of black mark is there for a defaulted debt that is so to a 3rd party agency?

I can't bare to look at my credit report right now....

Thanks in advance.

L

[MyHAMP]

Originally Posted by lennox

MyHamp, how long does it take for defaulted CC debt to not show on your credit report? Is it as soon as they sell off the debt to a 3rd party collection agency? Does the 3rd party list it? What kind of black mark is there for a defaulted debt that is so to a 3rd party agency?

I can't bare to look at my credit report right now....

Thanks in advance.

L

It totally depends on the CC. Some charge-off earlier, some later. Some show the "charge-off"-mark after 180 days, others still show a balance and payments due even after 2 years.

It's also important to know the difference between selling off to a CA and just hiring a CA to collect. If they only hire, your balance is still reported. If they sell, the OC can't report a balance because you don't owe them anything anymore. They sold their rights on the debt. In that case, they have to report a $0 balance.

And here comes the DTI into play: On debt you owe a CA, there are no monthly payments. In addition, not every debt you have with a CA is reported. And the OC who sold the debt is considered paid - $0 balance.

In my case, I simply kept 2 little CCs with little monthly payments (one is a secured CC, minimum payment $20, the other one $25) to keep my credit running. I also obtained a secured loan at my local CU along an old car from a buy here, pay here lot (fortunately, they report as well).

I will sit the debt out. I was thinking about BK but since I don't have anything to protect, why should I?

Now to answer the question about a debt that is transfered. Again, the impact certainly depends on the question if this third party (CA) is reporting as well. There is simply no general rule what impact such an account will have because there are so many other factors in play - like the question how the rest of the CR looks. If you defaulted on several accounts - don't be too concerned. One negative account more or less won't matter. I'm talking from experience here.

BTW, my bad credit forced me to rely on cash. And I tell you what: It's not bad at all!

[lennox]

We had (have) $50,000 in CC debt. We quit paying last December. We were pulling from savings every month just to make minimum payments. When my husband was diagnosed with prostate cancer in December, and because of the radical surgury he was going to undergo; we knew he'd have a significant time off work with no pay.

It was a no brainer.....either use our emergency cash funds to stay on mortgage and daily (yet slight now) living expenses while he was off work for 12 weeks...or continue to draw down to pay our CC debts. I am certain all of them are charged off by now, because I am not getting statements from any of them.

We too, are letting the CC situation just ride out right now. After groveling, my parents said they "might" be willing to loan us the money to settle the debt. That's a last resort (before BK though), and only if we are slapped a subpeona from any of them.

You are very correct about paying with cash. I don't miss lack of credit. We lived so high beyond our means with the credit cards. I get sort of sick thinking about it. Using cash (our's is so limited) makes you question how necessary anything is before you purchase it. If we had lived with the same thoughtfulness in the past as we are now....we would have saved up thousands...I mean 10s...or even 100s of thousands in our life.

Oh well..."should have," "could have," "would have."

[Marie T]

I have been wondering about this too...we have three credit cards with about $65,000 total plus a Line of Credit on our checking account where we owe about $26,000 plus after paying the IRS $20,000 this year, we still owe the IRS about $28,000.

I have not made a payment on the three cc cards for 5 months...two have offered to settle - one for 50% and one by 35% but I do not have the money to do that. Once I get this mod figured out, I was wondering if they ever let you make payments on a reduced settlement amount?? It seems they would rather do that than the threat of bankruptcy and get zero but as someone who used to be meticulous about paying bills, this is all new territory to me!

The cc collection people (I talk to all three card people a couple times a week, one card is always the same lady) are telling me that they will write it off at 7 months and a third party will take it over which I guess is the CA (collection agency). We're underwater on the house by at least $100,000 so I guess if worse comes to worse we could file bankruptcy which we will probably do if we don't get an affordable mod worked out soon. BK will not help with the IRS debt so hate to do that.

I do have a question...when Chase pulls our credit report to see the minimum payment...do they look at the minimum payment the cc company is currently billing (they have added up the last 5 months so the 3 cc minimum payments total more than $10,000 or so now!) or do they look at what the minimum payment should be on the balance you owe...bad enough at about $1500 total.

I have never been late with my LOC payment that is tied to my checking account but they just this week raised my interest from 7.99% to 15% so not sure what I am going to do with that. I am going to try to call first since I have been with that bank for over 20 years.

MyHAMP....did the cc companies try to garnish your wages or attach checking accounts or anything?

lennox....I can totally identify with you. We did not live extravagently when we were making about 2 1/2 times more than we are now but we could have definitely saved more. As it is, the money we had in savings has gone to extend our ability to pay the mortgage much longer than otherwise. We are now 5 months behind and I cannot even comprehend that! The reason we owe so much on the line of credit is because I was using that to pay the cc bills and whatever I was short on mortgage after our savings ran out....the old robbing Peter to pay Paul. I hope your husband is doing okay... when something like that happens, you really see what is inmportant. I thought I was going to die after complications from surgery this year and it really changes your perspective!

I agree that cash or a debit card is the way to go. I feel that I have this mountain of stress on me that I cannot put down. I feel we are so blessed that my husband is still employed even though it is far less money than we were used to!

[MyHAMP]

Originally Posted by Marie T

MyHAMP....did the cc companies try to garnish your wages or attach checking accounts or anything?

Of the 30 CCs and creditors I couldn't pay anymore, only ONE thought it would be necessary to obtain a judgement against me - yeah, you guessed right: It was CHASE!

When they obtained the judgement, I didn't even have a checking account and certainly no wages or assets. So far, their judgement is a worthless piece of paper.

They even ordered me to a local attorney where I was bombarded with questions about my finances..and at the end, they also came to the conclusion that there is nothing to collect...

[davephx]

Yes I am getting chased by Chase for various cc going to collection very quickly.

Discovery immediately filed suit at 180 days. I answered but not very good excuses.

Once they get a judgment which seems fairly easy if you have any assets like bank account, wages, etc they can garnish. BKK the only option at that point if have assets.

[MyHAMP]

Originally Posted by davephx

BKK the only option at that point if have assets.

Being dead broke sometimes comes in handy..

[Marie T]

well that is a problem then as my husband definitely has an income to garnish! sadly no savings at all and they would have to get in line behind the IRS to put a lien on the house as the IRS told me they automatically put a lien on. Pretty worthless anyway since there would not even be enough for the payoff to Chase if it were sold.

So...does anybody know if these cc companies ever settle for a reduced amount then let you make payments on that? It seems they would since they have already offered to settle for way less and they would eventually get more that way then selling it to some bottom feeder CA but nothing about these banks is logical...

That stupid "Debt Validation Notice" we all seemed to have received from Chase in the mail today is freaking me out!! it is that line "the purpose of this communication is to collect the indeptedness due, or, in the alternative, to repossess the property that is the security of such debt".

[davephx]

IRS is the easiest and the worst. Easy to get a payment plan I am set up with about $300/month on about $24,000 back taxes starting in January 2010.

If you don't respond they can lien and levy. And your exempt assets in BKK are not exempt for IRS so 401k, IRA etc can be levied. You don't get rid of the IRS like a second in foreclosure if underwater.

Yes cc companies will settle and make payment arrangements for hardships. The further behind but not beyond 180 typically the better deal but varies with company.

[Marie T]

Originally Posted by davephx

IRS is the easiest and the worst. Easy to get a payment plan I am set up with about $300/month on about $24,000 back taxes starting in January 2010.

If you don't respond they can lien and levy. And your exempt assets in BKK are not exempt for IRS so 401k, IRA etc can be levied. You don't get rid of the IRS like a second in foreclosure if underwater.

Yes cc companies will settle and make payment arrangements for hardships. The further behind but not beyond 180 typically the better deal but varies with company.

I just set up a payment plan with the IRS - about $400 a month - they would not let me go below that and I had to pay them a huge chunk over the last few months (my house payment money!) to get it down enough that they would put it on a payment plan, so now I am 5 months late on the mortgage. The alternative would have been that they would garnish my husbands wages and then for sure there would not have been enough to pay Chase.

I do not think I am at 180 days with the cc's yet but getting close.