Just Received Unfavorable CW Loan Mod

[clkinggraham]

Here is our story:
We applied for a loan mod at the very beginning of April using a HUD counselor. We were "advised" of a few things: stop making payments or they won't look at our paperwork, our income has to exceed our expenses, we need to rid our budget of anything in excess (preschool tuition, healthclub membership, any clothing or extra free spending money)- our budget was tight, but we definitely made it tighter (to an unrealistic point- but supposedly lenders know that and take all that into consideration)- it was basically mortgage, car payment, utilities, insurances, property taxes. So, after 3 months we just received a FedEx envelope on our porch (no call from our HUD lady)- that reduces our interest rate from 6.25% to 5% for 60 months and then it will increase to the original rate. And, we have to pay $3200 before it can go into effect (mortgage and some fees) and they put a couple missed payments back into our loan. We were hoping for more- really this saves us about $300-400 a month.

Why we are getting the loan mod/what we included in our hardship letter:

We have been CW customers for 7 years or so and have always been current on payments... This past summer my husband's company unexpectadly closed, and he was out of a job for 4 months. During that time, we decided we could not afford our mortgage, so we packed up our house, rented it out, and moved our three children and ourselves in with my parents. After 7 months of that, we could no longer stay there- so we moved home (at this time we did the loan mod- at the same time the federal programs were introduced). My husband did get a job making less than he did at his previous job... hence the need for the loan mod.

Now, we just don't know- is this just part of the game? is this really the best they can do? what actions should we take now? etc. etc. how do you know what programs are available through CW/B of A?

[sherman]

clkinggrahm, are you using NACA for your loan modification? If not, that would be the way to go. What does the interest on your loan go up to after the 60 months. All the NACA restructures have been fixed interest rates. Does this mod help you and if it does will it only be temporary and you could be in the same situation again? I strongly suggest you submit with NACA for a mod at www.naca.com

[helpsavemyhome]

clkinggrahm, the only way CW will give you an affordable loan mod is if you go thru NACA, like Sherman said above. Many of us on this board have been dealing with CW for a long time (9 months for me!) and NACA is the only way to go.

Good luck to you!

[clkinggraham]

I used the local HUD agency not NACA. The rate goes up to 6.25%. The decrease to 5% doesn't help us- it only saves us a few hundred dollars a month or so.

[helpsavemyhome]

Depending on who the investor is on your loan, NACA may be able to help you get an interest rate as low as 2%. Many on this board have been approved for 2%.

[clkinggraham]

What sorts of things need to be out of my budget...? Is it ok to just begin the process with another agency? Should I talk to my HUD counselor about it? Should my income be greater than my expenses- that is what HUD told me?

[helpsavemyhome]

NACA has been the most successful at getting payments 'affordable' for homeowners because not only are they a HUD Approved Counseling Agency, they are also an Advocacy Group. NACA can help you if you are in the negative each month, but they don't like you to be too much in the negative. They will go over all your income and expenses and put together a budget for you. NACA uses a different formula for calculation than other agencies, which is why they are able to get affordable payments for homeowners.

Speaking from experience, if I were you, I would not contact another agency or the HUD counselor...I would start with NACA right away. NACA's services are free and they can tell you right away (after seeing your income/expenses) how they can help.

[rozuki]

clkinggraham,

Go with NACA.....that "loan mod" you got from CW/BofA sounds like what they gave me after trying to work with them for 5 months while I was still current! They dropped my existing rate from 10.55 to 8 for 5 years and then tacked on 24k to principal....and I was never ever late at that time!!!

~Rozuki - NACA approved loan mod 2% fixed for life of loan