My CW Story -- Frustrating at best

[DDGator]

Hello all,

We purchased in 2006, near the height of the boom in our area. We were thrilled to get in when we did, thinking we would be shut out if we didn't buy quickly the way prices were going up. We financed about 95% for reasons too lengthy to mention. We had a 2 year ARM with pre-payment penalty that started just over 7% APR, plus a second mortgage fixed at 10% APR.

When I asked about the adjustment (based on 6-month LIBOR), I was told -- "don't worry, we will refinance you at two years and you will probably have sufficient equity to get a conventional mortgage." Yeah, right.

My value has dropped about 25% (West Central Florida area). I am way upside down and have no hope of a conventional re-fi. My rate has adjusted up twice to over 9% now. My payment has gone up by $700 per month.

I make good money, although my income is going down, like everyone. I don't think I would qualify yet for your typical "hardship" analysis because we didn't over-extend ourselves to buy this house. Nevertheless, this is putting a strain on our finances and it makes me sick knowing that we are paying a high rate on a house we are $150-200k upside down on. And, I know LIBOR will go up considerably, long before the market value comes back, and at some point I won't be able to afford the payment, long before it caps at 18%. I don't know how much money I want to throw into a losing proposition.

My first loan mod attempt was denied -- I was current and had too much income.

My second loan mod attempt was granted -- sort of? They offered to wrap two months payments into the principal (odd since I was not behind at all) and increase my montly payment at the same adjustable rate. No one has yet been able to explain to me the logic behind what they offerred. I am awaiting a clarification on that point, but I am not expecting much.

I am not asking for principle reduction, or even a competitive market rate. I would like a reasonable fixed rate to keep me in the house. My credit score is nearly 800 (so far), if that matters.

Do I have any hope of getting a mod from them if I am paying? I guess the new Obama program might help, if I am with Fannie or Freddie?

Mostly venting, but any advice would be appreciated. I know that I am not yet in the dire position that many of you are in, and I feel badly for everyone caught in this mess.

Thanks.

[Dan Bailey]

DDgator,
The decision to modify is up to the investors. Without a hardship, falling into the investors guidelines, etc...it may be hard. From what I understand on the Obama plan, it may fit you well if Fannie or Freddie are your investors.

If this is your only property, you might could try NACA:https://www.naca.com/refinance/refinanceSubmission.jsp
or make an attempt using a qualified attorney.