What do you think our mod chances are?

[md37793]

We currently have a 80/20 ARM originated in 2006. The home was originally worth around $300,000 but I would estimate it at around 230k now. The second mortgage is with HSBC. At the time we bought the house, our debt to income was around 28 percent, but with the tumbling economy we have each taken substantial paycuts. Now it is unmanagable. We are not late yet but are on the verge. Currently, we have sent everything to countrywide and they froze our account online and told us to wait until today for a decision and that a modification should be reflected online (which I know was total crap). Well, today passes and the customer service rep stated that she did not know if the loan would be modified, but that if it was to be that we would recieve a package via fedex in a week or so. It sounds to me as if we are being strung along. Does anyone have any insight into how to get them to get moving a little faster. We are pulling payments out of thin air and are almost out of breath!

[Moe Bedard]

Hi md37793,

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

Try calling
Home Retention
1-800-669-0102

and see what they say versus a csr.........

Please keep us updated on your progress.......

[md37793]

Just got a letter in the mail today stating that our modification was rejected! I have no idea why? yesterday we also got a letter stating that our propertywas tax assessed for 70k less than last year. We owe 290k on a house that is probably worth 210k ans our next ARM adjustment is in april. It adjusts every six months! We don't have any lates, but want a mod to avoid our credit going in the crapper. Do you have to have lates to get a mod now?!?! That seems to completly contrast with the point of a mod in the first place!?! Help, what do we do now!?!?!

[Moe Bedard]

There have been modifications given on loans that were not late......but it is up to the investor on the loan............if the investor is FannieMae or FreddieMac.........their new streamlined modification is looking at loans that are 90+ days in default. A modification is given in hardship situations and they are worked like an emergency room mentality.......the most severe hardship cases in foreclosure are going to be looked at first...........these are what the lenders look at as a hardship...........

Adjustable Rate Mortgage Reset causing much higher payments
Illness
Loss of Job
Reduced Income
Failed Business
Job Relocation
Death of Spouse or C0-Borrower
Death
Incarceration
Divorce
Marital Separation
Military Duty
Medical Bills
Damage to Property (natural disaster or unnatural)



Some members that are turned down by CW have been trying again for a modification through NACA.........if you meet the criteria they can put together a modification proposal to present to CW and your investor.
click on the link for the info if you would like to give it a try..............
https://www.naca.com/refinance/refinanceTenStep.jsp

[md37793]

What would happen to our 2nd lien in the event of a foreclosure? There is no way countrywide would recover the loan balance on the first if the house was sold at foreclosure. Would the 2nd lien result in a judgement?

[Moe Bedard]

That woud depend on your state's foreclosure laws..........are you in Maryland?

[md37793]

yep. i am in md

[Moe Bedard]

Here are the guidelines for your state............they have three years to file a deficiency..........but if you were to try to short sale the property with an agent that is well versed in short sale negotiation.......they can negotiate the deficiency.
Maryland Foreclosure Law

[md37793]

do you know if HSBC typically files deficiency judgements? The reason I ask is that I can probably recover from the foreclosure faster then I can see the value of my home rise 30%. If I could avoid the judgement, than I would be hard pressed to not let the house go.

[Moe Bedard]

HSBC might.........even with modifications......their investors offer only a 6 month program on a fist lien.

[md37793]

i just got off the phone with countrywide and they said that the mod was never considered for the national homeowners retention program! They just considered it for a regular mod! We had no late payments so we were of course rejected! The lady said they flagged the loan and had ten days to get our docs in (again!). They gave us the same fax number to send the docs in to as last time. What should we do now? Also...thanks for your help! You have been a great resource!

[Moe Bedard]

only you can decide whether you want to go through that again or not................some members have submitted the docs to go through the process of both the CW program and NACA.............but have ended up staying with NACA because all that CW was offering was a 5 yr. rate reduction and NACA offered a low fixed rate for the life of the loan.

[md37793]

Is there any disadvatage to trying to apply for both of these simultaniously?

[Moe Bedard]

I have not seen any disadvantage posted from members that are going through both.

[md37793]

Thanks, I will certainly try both avenues than!

[bossguy66]

NACA might be a better way to go because of more personalized treatment. If both requests come in at the same time, one will be rejected. CW will only work on one mod at a time.

[Moe Bedard]

there were a few members already that got the two workouts to choose from..........CW and NACA's............in one case one of the members was able to wait to see the CW mod from their investor before deciding........whether that is the norm or not I am not sure....... but it had happened in those cases............maybe those CW reps were not supposed to do that.......it was nice that they did.

[sandyh]

At first, CW had on their website that they were offering fixed low rate for the payoption (if you search the first press release, it is there). Now it states that it is only offering the interest only for a period of time, or fixed with annual increases...I wonder why it changed? We are on the fence about contacting NACA. It seems like a pretty political organization....is that true? One of our jobs makes it difficult to get involved with a political stance so we are nervous about even going to a workshop.

Anyway, I wanted to post that CW obviously had some sort of major mix-up as on these forums alone there are about, I think, 4 or 5 of us that did everything and said everything to be considered for the "national homeownership" program but wasn't. Something must have happened in the system b/c I had several conversations with many agents prior to getting the denial for a regular modification that told me we were being considered for that program.

I got the letter today - it stated we were denied b/c we didn't have "default"....show significant hardship. SOOOO frustrating as we have NOT paid the IRS just to make sure to pay our mortgage. We didn't pay our real estate taxes....so we could pay our mortgage. And now to know we should have not paid our mortgage????

Argg...thanks again for this forum. It does help to know we aren't alone with our very stressful situation.

[kateistired]

I was shocked to just now go on their website and find the "press release" statement completely different than the one they originally had. I also cannot believe that they are just canceling people's modification requests in spite of the fact that they are following every directive specified.

I am more than a little worried that they will say I don't qualify, too. They keep telling me to wait just a little bit longer, the docs will be coming, they are swamped, etc. In the meantime, my status on the website has said active processing since 10/30. They are gambling with people's homes here, the most important purchase many of us have ever made. To get flippant, vague responses to my requests for more information makes me so frustrated and angry

[Moe Bedard]

kateistired and sandy,

I think I had a copy of the original press release somewhere saved........I am not sure why they would change it mid stream like that.......

Is that the only part they changed?

[gray517]

I have a copy of the old press release, the old one said specifically subprime fixed would get streamlined rate mods, the new fact sheet doesn't say that, also it says modifications are determined based on the affordability equation

Affordability Equation
		Foreclosure Avoidance Budget: The difference between the likelihood and severity of the investor’s projected loss in a foreclosure sale and the likelihood and severity of the investor’s projected loss in the event the borrower were to receive a loan modification and later experience a foreclosure sale. Affordability Criteria: To the extent permitted by the Foreclosure Avoidance Budget, borrowers will be offered a loan modification that produces a first-year payment of principal (if applicable), interest, taxes and insurance equal to 34% of the borrower’s income or as close to 34% of the borrower’s income as the Foreclosure Avoidance Budget permits without exceeding 42% of the borrower’s income. For those borrowers who do not escrow taxes and insurance, we will offer a loan modification that produces a first-year payment of principal (if applicable) and interest equal to 25% of the borrower’s income, or as close to 25% of the borrower’s income as the Foreclosure Avoidance Budget permits without exceeding 34% of the borrower’s income. Failure to Qualify under the Affordability Criteria: Borrowers in participating states who do not qualify under the Affordability Equation may be eligible for a payment under the foreclosure relief program and/or relocation assistance.

they also got more specific with these requirements:

The borrower is 60 days or more delinquent and the current loan-to-value ratio is 75% or above;
The borrower becomes seriously delinquent at any time prior to June 30, 2012, and the loan-to-value ratio at the time of the modification is 75% or above;
The borrower is current on the mortgage but is likely to become seriously delinquent as a consequence of a rate reset or contractual payment recast based on negative amortization triggers, and the loan-to-value ratio at the time of the modification is 75% or above

what a joke, they are NOT actively contacting anyone. Thank God for NACA!!
Countrywide Financial - Real Estate Mortgage Lender - Home Loans - Equity Loan Mortgages

[Moe Bedard]

thanks gray......

[md37793]

Not to get away from countrywide, but I have an HSBC second on the house. I am not late on that either, but I was wondering if this approach would work. Since the house is worth less than the first loan amount with countrywide, HSBC basically has an unsecured lien (not in the legal sense, but for practical purposes). The amount is around $58000. I was thinking of offering them about 10-15% of the balance to settle the loan and tell them that I am close to not being able to pay. I can borrow some money from family to pay it and use part of my tax return as well. It would drop my total outlay by $548 which would be a huge help. Since my credit is still pretty good, I was thinking that I could refi the countrywide loan and get rid of it with rates being so low. Does anyone think HSBC (who is the investor on most of their servicing portfolio) would go for that?

[md37793]

Does anyone think it will work?

[md37793]

Good news! Logged into HSBC last night and our second was reduced from 10.5% to 5.25%!!!! Payment dropped from $550 to $330!!!! Also got our new tax assessment and our taxes will go down another $140 this year. I don't care about the lost value as much as the reduced payment. Half way there...now if we can get countrywide to move!