HELOC modification

[Neeceetee]

Good morning. I've been a member of this forum for a few months, but have always stayed lurking (I so dislike that word LOL) in the background, reading and commiserating with others with stories similar to my own. I just attended the Congressional Hearings held in Cleveland, Ohio on Monday and they had work-out sessions held concurrently. I was just wonder if anyone had ever attended the work-out forums held around the country and if you'd had success with the 1:1 and face-to-face contact? I purchased my home in April 2005 80/20 Loan with an interest only adjustable ARM at 7% and a HELOC. I worked with a local non-profit organization to get the one loan modified, but was denied a work-out for the Heloc (illogical, of course). So I decided to attend the hearing and then talk to a Countrywide representative in person to explain my situation. Of course, things seemed promising at the time, but now I'm just wondering if anyone else has ever had any luck at these forums. Thank you.

[Neeceetee]

Hello all,

First of all, let me say although I'm sad to see so many people struggling to save their homes, I take comfort knowing that I'm not in the fight alone. Okay, here I go. I have an 80/20 loan with Countrywide...I received modification on the first loan in June 2008...fixed rate of 5.25 for 30 years. I was told that once the first was modified, it would be easier to modify the 2nd. Well, I was denied modification for the second. It is a variable rate HELOC, used as down-payment for home bought in 2005. Because of a series of misunderstandings (Chp 13 - where I was given a new amount and I thought I was paying for both 1st and 2nd loans and during that time I received HELOC statements with no payment due) after my Chp 13 was dismissed, I discover that I have a past due balance of 10,000! Of course, there's no way I can pay that off and get back on track, I decided to send $100 in this month, with a hardship letter requesting a second look at modification for this second loan. Well, I happened to look at the web-site and my work-out status and it said approved and on Thursday, I received the modification papers.

Although I know you all can't give me legal advice, I'd like some advice. Here's their offer: Because the HELOC was still in the draw period, the past due amount is Finance charges. They want to add this past due amount to the original principal balance of 45,000...decrease my margin from 3.50 to 1.50 and continue on my merry way. My question is "Is this a good thing to happen?" Will I be digging myself further into the negative hole here? I know that once I'm in repayment status, I'll be paying not only the interest but the principal. Thanks for reading my thread.

[Cat Damiano]

Neeceetee,

Is isn't necessarily a bad thing to have principle going down.......if you feel that the offer will help you financially in the long run and it makes sense then go for it. This could be the only option available to you...........

[Neeceetee]

Thanks for the response. The first loan was modified from 5 year Option ARM at 7% to a 5-year fixed rate P&I (5.00% year 1; 3.00% year 2; 4.00% year 3; 5.00% year 4; and 5.25% from year 5 until year 30). Of course, it could be better, but I too have to sacrifice something for not being more vigilant when signing those papers way back in 2005. So all in all, I'm grateful that they're willing to do something for the HELOC. Thanks