Special forebearance vs loan modification

[patnj]

Hi all

I really need some help, I am very confused by Countrywide.

I have a house with approximately 150,000 in equity.

I recently had a reduction in income of 20% which is making it hard to make ends meet. I have a fixed interest only mortgage of 6 1/4 %.

I missed my first payment for June 1st and on July 3rd I was sent a registered letter from countrywide if intent to foreclose. I was only behind 1 payment!!

I made this payment July 10th. I am current but owe July.

I called Countrywide a couple of weeks ago and asked them if I could move a couple of payment's to the back of the loan. The first guy said yes and I would have to be in forebearance. i was assigned a negotioater very quickly, 2 weeks and spoke to her last thursday. She told me loss of income was not a condition for special forebearance and since I was current not to worry about it. Then the next day I get this foreclosure letter.

Immediately I call Countrywide and speak to another lady who tells me the letter is a mistake and to ignore it. She keeps repeating this when I tell her I want a letter telling me this is a mistake. I have a feeling she was in one of their outsource offices in India. She told me I should do special forebearance again!! and she had no record of the other tranaction where I was assigned a negotiator at all. I am really confused.

So many on here are many months behind and are not in foreclosure, so why am I after being 33 day late on one payment? Also, is it because I have equity and they think they can sell my house really easy for the amount of my mortgage? I am going to take in a realtive to live with me who will pay me rent which will make up for lost income. I have not sent my hardship letter yet as I want to make sure I write the correct thing.

I want to keep my house. I have 13 and 15 year old kids and I don't want to move them. They are doing very well, straight A's and will be going to college in 4 and 5 years respectively. I need to keep this going until then.

Any advice would be greatly appreciated.

Thanks

Pat

[Cat Damiano]

Hi patnj,

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

The problem that you are going to run into if you were to get either one of these choices is that the majority of the workouts depending on who is the investor on your loan would require that Principle, Interest, Taxes and Insurance be added into the payment..........therefore raising it...........
It might not workout to where they will leave it interest only and with a fixed rate of 6.14% interest only they might not go any lower...........

A forbearance works similar but they will tack the missed payments on and since you have an interest only loan all that will do is raise your principle balance and in turn raise your payment.............

If the family member moving in will help you to stay current with that low of an interest rate and the interest only payments............you might want to just leave it alone.............

Is it fixed for just a period of time and then will adjust?
or
Is it interest only at 6.14% for the duration of the loan?

[angel83]

I have seen others on this site state that their current rate was just extended or even lowered for another 5 years and then fixed after that. didn't sound like taxes and insurance were addes to the payment. Doesn't seem like there is a whole lot of consistency yet on these situations.

[schwefls]

angel:

No consistency at all, each investor is different, they ultimately call all the shots

[Cat Damiano]

Angel,

My post states depending on who the investor is on your loan..........
With Countrywide some of the investors will add the escrows...........and some will not modify rates under 8%.....many offer the rate freeze.......but there isn't anything to freeze if your rate is already fixed for the life of the loan.................the reason the workouts are not consistent is because there are different investors on the loans.........
so although some workouts are similar............the are not exactly the same....

[patnj]

Right now they ahve me in for forebearance probaly because I had a deficet in my earnings vs expenses. I am just worried that since I ahve 150,000 in equity that they will try to just grab my house and sell it since they know they won't lose anything. I still don't understand why I received a letter of intent to foreclose with only one payement past due. Is this normal???

[Cat Damiano]

It isn't necessarily normal.............but it isn't unheard of..........according to the Deed of Trust and the remedies available to a lender...........you only need to have missed one payment..........before they can proceed with foreclosure.................most do give at least 90 days......

Was the payment that you missed part of the forbearance? and did you receive the forbearance because you were in default at that time?
Can you show a surplus now on the incom/expenses or is it still a deficit?

[patnj]

No this was the first time I was ever late. I paid it before I recieved the letter.

I had called and asked about special forebearance which is what might have promped the letter... Do they try to foreclose on people who have equity?

With all the account which are much more delinquent than mine I am surprised they would send me this letter. They told me yesterday it must have been a mistake but what does this mean. The letter says I have 30 days to reply. What should I do?

[patnj]

Cat

In regards income/expeses I will be able to show a surplus with the rental income i will recieve in occtober. This is why I would like to move 2-3 payments onto my principal so I can have some breathing room and have an emergency fund in case a hardship arises down the road. Do you think this is doable? Thanks

[Cat Damiano]

If you are unsure as to how to reply to a legal notice you would need to ask an attorney to help you or at least advise you on how to respond to it........
we are not attorneys so I would be unable to help you respond to a legal action.............I can only help with the modification process and with a 6.14% interest only loan.......there isn't much to modify............
You will have to see if the Home Retention Team can help you with what you are looking for with some payments being added to the end.............

Workout Department
1-800-669-6087