How Do You Negotiate an Interest Only / ARM Modification

[BucketJoe2]

Hi Everyone, I was recently turned down for HAMP. They have different reasons depending on who I talk with, but I have started to inquire about what else might be available at this stage.

I missed 4 or 5 payments before I was pre-qualified for HAMP. I have an Int Only loan (no principle is being paid down) and it's set to adjust in 6 years. From what I can gather, I passed the NPV test (I live in Florida, so value has dropped) and I have a 70K 2nd owned by Citi as well. When I call the 866 number for LoanSafe I haven't been greeted with suggestions or alternatives. I was told today that there really isn't anything available for me if I was declined for HAMP.

What I can't figure out is how to ask for this modification? If the goal is to reduce the monthly payment, more than likely my payments will be higher. The only thing I can think of is to ask for a payment schedule similar to what was outlined in HAMP. Does anyone have a suggestion on how to approach a modification for an Interest only loan? Eventhough I need to obviously get the principle down, I am also very concerned about adjustable part of the loan as well.

Also, my credit is shot, so I can't do a refi..........

Any help would be greatly appreciated!

[heidi79]

HAMP includes only a principal forebearance (if they feel like it) so it won't lower your loan balance, it will basically be an amount put in suspense and it will remain until you re-finance or sell the house.

I don't have any tips for you as far as "negotiation" with them. You are going to have to apply for assistance and hope and fight to get the modification done. Since they are not giving you any options, you should put your package together and send it to the loss mitigation department.

Everyone has a right to apply for assistance if they are experiencing a financial hardship. Citi has to have an internal modification that can help you. Since the HAMP came out, they seem to only want to offer people that one program instead of finding more solutions.

Get your income information clear and organized before you submit it.

[BucketJoe2]

Thanks heidi79. I will ride the last bit of this wave and then reapply for an internal. The tricky part with my income is that I am in sales and was paid a small bonus back in March, so my YTD numbers are higher than my monthly pay stubs. If it wasn't for the bonus I would be in the clear. The problem is I can't count on bonuses from year to year. The last rep I spoke with stated that I need to come up with a letter from my company saying bonus are not going to be paid. My company will never give this to me.

[heidi79]

usually in the calculation they will take the ytd and divide it by the months into the year so far, so, they will come up with an average income, of course, the bonus will inflate your average some.

maybe they can write a letter for you stating that the bonus is not a regularly scheduled check for you and they can note when the last time was that you got one. if the bank sees it's something sporadic you might be able to get over this hurdle, your job really shouldn't have a problem in stating what is true.