Newbie/CW Loan Modification

[niki4h]

We purchased our home in 2007. Our mortgage is an $80,000 30-yr ARM with a starting interest rate of 10.8%. We live in MN and this is our only home. We have never missed a payment nor have we made any late payments. We always thought we would refinance after two years, but now we don't know if it would be possible. Our interest rate was supposed to increase this year, but we got a statement from Countrywide and our interest rate is not going to increase at this time. This must have been done automatically since we did not request it or anything.

We recently decided to start the loan modification process and thought it was going well until we saw the posts on this forum. Here is where we are as of now...

We called Countrywide and told them that we would like to modify our loan since we wouldn't be able to afford the payments when our interest rate goes up. We were only asked two questions. How much we make each month and how much we spend each month. We make and spend close to the same. I was then told to fax in our proof of income and to continue to check the Website for updates. The Website updated after we submitted our documents and our status states processing and asks us not to contact them regarding the modification until April.

I was just wondering if anyone had a similar situation and what we should expect next. Thank you.

[Moe Bedard]

HI niki4h,


Welcome to the forum and thank you for joining..........


Just call at first for an update and to make sure that they receive everything o.k............even thought it says that....sometimes you still need to call periodically for updates.
1-800-669-0102

[niki4h]

So, it's been four months and I just notice on the BOA Website that our modification has been canceled. Up to this point, they had me convinced that I would be getting a modification offer soon. I am so upset. I called and was told the reason it was canceled is because our current payment is just under 31% of our income. Well, our ARM is going up (and will make it over 31%) in November and then we won't be able to make our payments. We have never missed one. They knew all of this the entire time, it's been four months. Total BS. She told me that we could reapply after our payment goes up. She told me hat she could request an interest rate reduction that normally lasts for five years. But, we may not get approved for that either. What should we do? Should we try for the interest rate adjustment or should we try going through one of the organizations for modification? I'm pretty sure we couldn't refinance since we only lived here a couple years and the home prices have gone down some and we certainly don't have any money to pay closing costs or anything out of pocket. Any help/advice would be greatly appreciated. Thank you!

[Moe Bedard]

I think you were denied for being current. That seems to be the reoccurring theme with the Obama loan mod program. The facts are that I have only seen a few people get help who were not late and you are number approximate 200 plus who has said they were denied.

Those numbers tell me what I suspected, lenders will not modify these loans until your are delinquent or in default.

Now, you will have to make a choice on what to do about your mortgage and credit. How much longer can you live like this just to protect your credit score?