Pay Option ARM loan-questions....

[lynne]

Hi-

I will make my story short. I have a pay option arm and have accrued about $15,000 in negative amortization. My rate is at 3.65% right now and I am paying the minimum payment. I am expected to pay the full P&I payment starting in August (which I won't be able to afford). My husband is unemployed and collecting UI benefits.

If anyone has any answers, my questions are these:

1) I am the sole borrower on the mortgage, if I do a modification, will my husband have to sign as well? Will they take his UI benefits in to account even though they are temporary?

2) Has anyone has any success with getting their neg am amount forgiven?

3) What are my chances of getting a decent modification offer since my rate is already so low? I mean, how much lower can they really drop it to make the full PITI payment affordable in the long term?

4) I am set to call CW today since the new Obama plan is starting. Does anyone have any pointers for my situation when I call?

Thanks for any advice or insight you can give!

[Dan Bailey]

lynne,
Glad you found the forum and posted.

Since your husband is part of the household, they will include his income (which you would probably want to do anyway to show more ability to pay)
Lenders have not been forgiving any amounts owed.

I'll be honest here...if you cannot make the interest only payments at such a low interest rate...well, I dont think anyone has seen rates lower than 3.65%. Tacking on p&I will only increase the payment more. I'm sorry to say that, but it is the truth. If you are in arrears with any payments, they will add that to the principle also, thus increasing your payments even more.

[lynne]

Thanks.

I can make the interest only payment but am concerned because it is set to go up the full P&I payment in August.

I thought there were some stories of people having success with getting neg am amount forgiven. Maybe I am wrong.

What I really am looking for is a way for them to fix the low interest rate. I have a credit score in the high 700's. and have never been late. I have no arrears.

[mgallant]

Originally Posted by lynne

Thanks.

I can make the interest only payment but am concerned because it is set to go up the full P&I payment in August.

I thought there were some stories of people having success with getting neg am amount forgiven. Maybe I am wrong.

What I really am looking for is a way for them to fix the low interest rate. I have a credit score in the high 700's. and have never been late. I have no arrears.

I think what Dan was trying to say is even if you get them to go fixed at your current rate you still need to show them you have the ability to pay the "New" principle and interest rate payment that will be higher than your current interest only payment. You say you have until August before your loan comes due and adjusts, first thing you must do is get your husband employed and earning an income. Once he has a job and can show a steady income, then you will have a case to apply for a MOD to your loan to make it more affordable. Good Luck and keep reading here you will learn so much!

[lynne]

I think I have a case if they take my husbands unemployment benefits in to account.

I am optimistic about the President's new plan that begins today. I hope it can help me restructure the loan in some way.

thanks for this forum. It has been interesting to read everyone's stories.

[Dan Bailey]

Lynne,

Thats a bit different. I thought you wanted a lower rate.
Getting them to make it a fixed rate is possible, if the invester agrees. The 15000 negative would still be rolled into the principle. (thats whats been happening so far) which would raise your payments slightly.

The first step would be contacting them , drafting a hardship letter. Example:Examples of a Hardship Letter and sending it in.

As far as pointers, be prepared for alot of run-around, mis-information from wrong depts., and alot of time on the phone.

Remember, the "obama plan" is not mandatory. Many lenders are waiting to see how it is tweaked (same as we are waiting) to decide if they will participate.

To see if you would fit into the "plan" you can go here and check if you meet the criteria:http://www.loansafe.org/forum/stop-f...html#post63591

[lynne]

In February I received an official letter from CW via UPS soliciting me for a a free modification if I qualify. I have a pay option ARM and I think this must be their effort to reach out to me to modify. I haven't called yet.

I have read somewhere that others have received this letter. What was your outcome? I also read some people speaking of a 3% mortgage for 40 years, which sounds awesome if no prepayment penalty. Does anyone have any thoughts on this deal? How hard would it be to get that?

[mgallant]

BTW, you can use your husbands income regardless of if it is UI or not. You can also contact NACA and get the ball rolling with them if you meet their criteria. Good Luck

[Dan Bailey]

Lynne,
It is helpful to keep your situation in the same original thread.
That letter was mass mailed to everyone with CW pretty much.

Alot of people get different modifications depending on who the lender is, the serviser and the invester behind the loan. There are many variables, and outcomes depending on individual situations (financials, state of housing nearby, etc..etc...) predicting outcomes based on others situations and stories heard is about immpossible.

[mgallant]

I would have my doubts that CW would ever agree to such a deal. I would guess that type of MOD woud be a step plan starting with interest only and then maturing on the fifth year at a much higher P&I payment. We were sent a MOD from CW last month that started with a 5% int only going up each year and ending at 8% fixed P&I for the remainder. We declined CW's jesture to help us to say the least and am now working with NACA.

[Woodland Hills Worrier]

Does anyone have any information about the AG settlement in several states with CW regarding Pay Option ARMs? I read the settlement particulars and it seems to me if you are qualified, i.e. deliquent by 60 days then you are eligible for various modifications including a principal reduction to 95% of current value. I got a loan re-fi in 2006 and went minimum to build up my credit for a re-fi in 2009 after 3 year pre-payment penalty elapsed. So now I am underwater with additional prinicpal of $36,000 added on a looking at hitting the 115% recast in about 21/2 years. What should I do. I am currently able to pay first and second by scrounging and getting late on other debts. But I need to know. Does a legal settlement mean that CW and BofA are required to follow through on the terms of the stipulated agreement? They have set aside $8.5 billion. Is this just a lot of hot air and PR or is it the real deal?

[lynne]

Originally Posted by mgallant

I would have my doubts that CW would ever agree to such a deal. I would guess that type of MOD woud be a step plan starting with interest only and then maturing on the fifth year at a much higher P&I payment. We were sent a MOD from CW last month that started with a 5% int only going up each year and ending at 8% fixed P&I for the remainder. We declined CW's jesture to help us to say the least and am now working with NACA.

MGallant, I am curious. Were you sent the loan modification offer letter I was sent too (see above)? I am trying to figure out if there is a difference between the deals that solicited versus unsolicited modifications are getting...

If anyone has any stories knowledge about this topic, please share.

I called CW and the modification consultant took some minimal information from me, was going to pull my credit and check with the bank to see what they could do (he guaranteed they could do something). He called back two days later (as he promised) with details. I have yet to get in contact with him.

[lynne]

Current:

-$295,000 pay option ARM (includes 15k of neg am)
-adj rate at 3.625%
-paying lowest monthly payment of $1,533.00
-26.5 years left on 30 year mtg
-I am not late on any payments

2 Offers:

1) 4.875%, 40 year loan, new payment of $1896

2) 5%, interest only for 10 years with steps after that, new pmt of $1641

I was able to provide the negotiator with more info about additional debt I have which he said would lower my rate (he is going back to the bank to resubmit). I really need my payment to be around $1,500.00. I can't afford much more.

Which deal should I take? I think I want to try to get them to forgive some negative am. I have to try and ask...

[MP927]

Lynne that is almost exactly the same amount that we owe, and we need our payment to be the same as you (around 1500.) Neither one of them sound very appealing really. Are your taxes and insurance on top of that? Or included?
Have you applied to NACA? They are trying for a 1257.00 PITI and then taxes and insurance will be $290.00 on top. That is the only way for us to stay in this home @1547.00 per month total.

[Schnelle]

Congrats! Those are two great offers in my opinion; I would be jumping with joy if I get a similar offer. So far I have been denied twice.

I am curious under what mortgage rescue plan were you considered for?

Thanks.

[lynne]

MP927-

those payments do include the taxes and insurance. I am ruling out the interest only one since I need to begin paying for this house in it's entirety. I am really anxious to hear back to see what he can lower it to. I will post results.

[MP927]

Everyone's needs are different but those payments still seem out of your comfort zone...be cautious with it.

[lynne]

Thanks Schnelle-

I am not sure what the program is entitled. They sent me an offer letter in February with an offer number (I am assuming because I am in that high risk group with the pay option ARM). I will ask my modifier/negotiator what program it is and post back. I think they are fair deals, but still more than I can afford at this time.

I am grateful that they will work with me though and am curious how this figures in to the new Obama plan. Does anyone know how that is working with Countrywide? I don't know who the investor is on my loan but I am goin to ask.

[lynne]

The second offer they gave me now is 3.5% fixed for 40. This brings the PITI payment down to $1610. I am thrilled. I asked what the program was called that I qualified for and they said it was just a general first mortgage modification-no program title. there are no fees or costs associated with this and they even send a notary to my house to witness the signing of the doc's. There is no prepayment penalty, so I can always pay it off earlier. I couldn't be happier. It is a little more than I can afford, but I am very grateful.

[lynne]

Received an offer for a modification from CW.

current:

$295,000 balance on a pay option ARM
3.625% ARM right now
30 year term
never late
paying minimum payment of $1,533

offer:

3.5% fixed
40 year term
$1,610 PITI payment
no prepayment penalty
no fees or costs to do this

I couldn't be happier!

[Moe Bedard]

congratulations!



Please let us know when you receive the docs.

[Schnelle]

lynne,

That is awesome news! It is great to see that someone is getting a reasonable mod offer

I am absolutely thrilled for you.

[lynne]

Originally Posted by Schnelle

lynne,

That is awesome news! It is great to see that someone is getting a reasonable mod offer

I am absolutely thrilled for you.

Thanks for your support Schnelle.

It is so emotionall exhausting worrying about this all of the time, isn't it.

Where are you at in your request? Have your circumstances changed at all for them to re-evaluate?

[lynne]

I am supposed to receive my loan mod paperwork to sign any day now. I am concerned though because I feel that I qualify for Obama's Home Affordibility Plan. Once CW releases the guidelines and formalizes the eligibility, have I given up my chance for getting an even better deal under this program?

My loan is owned by CW.