A Bit Baffled by CW here in CA!!!!!

[klynn72]

I am new to this forum and while am saddened that so many are struggling like I am, I am encouraged by the support here and thankful to all who take the time to post.

My story in brief.....we owned a small construction company which was dealt a severe blow by the downturn in the economy. However, we have been blessed, as my husband recently was hired by the fire department (job security!!!), but his starting salary is about 40% of that which we enjoyed we times were good in construction and as a rookie, overtime isn't an option for him right now. As CW constantly asked this question....I should add that I don't work as I have 4 young children and the cost of childcare would exceed that which I would make.

We absolutely cannot afford our current mortgage and have not made a payment since 11/2008. I have been talking (or rather banging my head against a wall) with CW since the beginning. CW referred us for help under the HOPE program and we submitted the paperwork immediately. Was advised it could take up to 90 days for a decision....I called weekly to followup, spoke with a different person everytime. Finally on March 12th, my call which was typically transferred to collections went to loan counseling....I was thrilled. Only to receive the news that we were DECLINED. They claimed that no matter how they worked it.....it didn't fall within the 31% range of my husbands salary. They said a Notice of Default would follow shortly.

So after reviewing all options, with the help of my parents, we retained an attorney on 3/18.

Now, coincidence or not......on 3/23 I received a FEDEX package direct from CW (attorney new nothing about this), letter dated 3/20 offering a loan modification agreement.......it is what they call a STEP RATE program and offers an 10 year interest only option, whereby the rate slightly increases over the next 10 years from 4.5% capping out at 7.1% which is our current interest rate. Furthermore, it tacks all past due payments to the back end of the loan and our 1st payment would be June 1st. We have until 4/20 to respond.

Now, knowing that my husband has a secure job, whereby we know that our financial picture will be drastically different in years to come....this is a bandaid solution and one that can keep us in our home and something we can work with (if you forget how upside down we are). On the flip side....a 10 year interest only loan????? I don't get it!!!! Never mind the fact that we owe about $200,000 more than current market value. I am not sure what to make of this at all. Totally baffled......denied one day (and I have the letter to prove it) and 8 days later this!!!!

Anybody else see a STEP RATE modification or have experience with them?

Thank you!!!!

[sandyh]

Originally Posted by klynn72

I am new to this forum and while am saddened that so many are struggling like I am, I am encouraged by the support here and thankful to all who take the time to post.

My story in brief.....we owned a small construction company which was dealt a severe blow by the downturn in the economy. However, we have been blessed, as my husband recently was hired by the fire department (job security!!!), but his starting salary is about 40% of that which we enjoyed we times were good in construction and as a rookie, overtime isn't an option for him right now. As CW constantly asked this question....I should add that I don't work as I have 4 young children and the cost of childcare would exceed that which I would make.

We absolutely cannot afford our current mortgage and have not made a payment since 11/2008. I have been talking (or rather banging my head against a wall) with CW since the beginning. CW referred us for help under the HOPE program and we submitted the paperwork immediately. Was advised it could take up to 90 days for a decision....I called weekly to followup, spoke with a different person everytime. Finally on March 12th, my call which was typically transferred to collections went to loan counseling....I was thrilled. Only to receive the news that we were DECLINED. They claimed that no matter how they worked it.....it didn't fall within the 31% range of my husbands salary. They said a Notice of Default would follow shortly.

So after reviewing all options, with the help of my parents, we retained an attorney on 3/18.

Now, coincidence or not......on 3/23 I received a FEDEX package direct from CW (attorney new nothing about this), letter dated 3/20 offering a loan modification agreement.......it is what they call a STEP RATE program and offers an 10 year interest only option, whereby the rate slightly increases over the next 10 years from 4.5% capping out at 7.1% which is our current interest rate. Furthermore, it tacks all past due payments to the back end of the loan and our 1st payment would be June 1st. We have until 4/20 to respond.

Now, knowing that my husband has a secure job, whereby we know that our financial picture will be drastically different in years to come....this is a bandaid solution and one that can keep us in our home and something we can work with (if you forget how upside down we are). On the flip side....a 10 year interest only loan????? I don't get it!!!! Never mind the fact that we owe about $200,000 more than current market value. I am not sure what to make of this at all. Totally baffled......denied one day (and I have the letter to prove it) and 8 days later this!!!!

Anybody else see a STEP RATE modification or have experience with them?

Thank you!!!!

Where the late fees waived? If so, sounds like the Dec. 1 plan to me - but the experts will jump in and give you more information. I can't tell if this is good news or not for you -it sounds like you were heading for a default notice and now have some time? I'd think that would be good! Good luck with it.

[klynn72]

Thanks Sandyh....I really don't know what to think of it. Haven't seen much about a STEP RATE plan in this forum, so I am hoping for a little guidance. Would like to have a little something in my back pocket when I talk to my attorney about it more.

[klynn72]

Should have added that the late fees were waived, only fee they charged was $60 and no escrow account required.......

[UncleTono]

A band aide is all we’re going to get. It’s unrealistic to believe that all our principles are going to get reduced or we’re going to get a great deal. We have to remember these are the folks that gave out these bad loans in the first place. All of us have to make a choice; do we stay in our homes? Or do we walk away? If you think about it millions of people are basically becoming renters in their own homes with these deals from the lenders. No equity, nothing!! And my guess is it will take decades to recovery our lost equity, but that’s a choice we must make. YA, it’s a band aide for ten years, but it’s better than not having a home.
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Good luck
>>
Tono.

[FLgata]

Good Morning Klynn,

Several members here have received modifications offering a "step-up rate"...including myself. Each person's situation is different. In my case, I refused the modification because I needed a permanent fix to my mortgage problem (interest only ARM). The step-up rate would have only delayed the inevitable for me. The inevitable being foreclosure. I decided to use the NACA because they work to restructure loans to a 30 year fixed at a low rate. Last week, I received an email stating that the proposal submitted by the NACA was approved by CW and my new rate was 2% for the life of the loan (still awaiting paperwork). This will take almost $1,000 off my monthly mortgage payment and keep me in my home.

If this is the only property you own, you may want to check out the link below. The NACA is a Hud approved, non-profit organization that helps responsible homeowners who are struggling with their monthly mortgage payments. Their services are free.

https://www.naca.com/refinance/refinanceTenStep.jsp

Good Luck and please keep us posted!

[tandknix]

I agree with FLgata...we used NACA also. If you haven't contacted them yet I would STRONGLY encourage you to do so. We also got a band aid mod from CW that we almost signed because we panicked. NACA worked with us and CW to get us a 5.25% Fixed rate for the life of our loan. Our previous rate was 10.45% ARM. NACA will take your current income and determine what you can afford based on that. They DO NOT use your credit or anything else to determine what they think you "deserve". PLEASE call them

[teenut]

Tandknix,
Naca is worth a try. CW offered to only put all my missed payments (3 months at the time) on the end of the loan thus making my payments higher. I had a ARM that was 9.45% and due to adjust again in may they refused to do anything about the ARM, so like many, I declined the offer and went through NACA.

[klynn72]

Another question for you.......if I accept an interest rate modification and down the line investors agree to principle reductions, would I be able to qualify for that......I am presently under water by about $200,000. Just trying to figure out if it is better to hold out a little longer or bite at something that will keep me in my home on the monthly affordibility note, but yet may not be the best choice in the long term........

[klynn72]

Well it has been 10 long months and 2 modifications offered by BofA that we rejected, but we finally got a modification that we can work with. 5 year interest only at 3% then it converts to principle & interest at 5.25% for the remaining term of the loan (which will be about 20 years). They also split the late fees with us. I couldn't have rented for cheaper than my mortgage is now......plus we get to stay put.....it works!!! Kind of a little funny thing......when we went to have the documents notorized, the notary looked at us as we walked in and said "loan mod???" to which we replied yes and she said she is notorizing about 20 a week(there are about 10 notories within 10 miles of my house)!!!! So for those of you still trying....be persistent!!!

[CW California]

Originally Posted by klynn72

Well it has been 10 long months and 2 modifications offered by BofA that we rejected, but we finally got a modification that we can work with. 5 year interest only at 3% then it converts to principle & interest at 5.25% for the remaining term of the loan (which will be about 20 years). They also split the late fees with us. I couldn't have rented for cheaper than my mortgage is now......plus we get to stay put.....it works!!! Kind of a little funny thing......when we went to have the documents notorized, the notary looked at us as we walked in and said "loan mod???" to which we replied yes and she said she is notorizing about 20 a week(there are about 10 notories within 10 miles of my house)!!!! So for those of you still trying....be persistent!!!

I had my docs notorized today too and ended up giving the notary NACA info!