Deal or No Deal? - Loan Modification Forum

Button · 03-13-2009, 07:56 PM

Finally after 14 months of the round and round game with CW, it actually took a filing of Ch. 13 to avoid my sale date. Now that I have filled Ch. 13 they have sent me a notice, "congratulating me" on my loan modification approval. They offered a 100% pay back, 480 month mod at 3.625% fixed. I currently was with a consolidated bill company for debts other than my mortgage. So, do I continue with them and take CW's deal, or continue with the Ch. 13?

Yanqui · 03-13-2009, 09:15 PM

Button congratulations. 14 months, wow. What does your attorney say? I am doing the same thing. I will be filing in July.

Button · 03-14-2009, 11:20 AM

My attorney and I both love the drop in the interest rate (6.5% to 3.625%). Not loving the 480 months, but the payment is low enough for us that we can make additional principle payments and shorten the term. I think the only difference is that my other obligations in CH 13 will be paid off over 5 years with no interest. Staying with the consolidated credit service is a 3 year plan. I am already 7 months into the 3 years. My interest rates have been reduced as well as my late charges. And with the Ch. 13 my $38,000 in arrearges with CW will be removed. I'm just thinking it really isn't a huge amount of money to go through with the Ch. 13. I would rather avoid it, It was just my only option to stop the sale date literally 3 minutes before my home went up for auction. Funny how I had to force CW to let me pay my mortgage. My attorney just wants me to bring all the paperwork with me on the 25th to court. I think if I show up to court for the hearing, then he is assured the remainder of the $4500. for the BK. My gut tells me to take CW's deal and continue with the credit consolidated company. It is a bit confusing and I don't want to make a wrong decision for my final one. I suppose I should find out if the Calif. BK judge makes any adjustments in interest rates, principle balances or terms.

Yanqui · 03-14-2009, 01:33 PM

Well, good luck in whatever you decide.

serenevenice · 03-14-2009, 02:06 PM

Button,
Did you say that they are not even adding the 38K that you're behind? They are just calculating the payments over your existing principal? That sounds like a very good deal since they aren't doing any principal reductions at this time. With the BK, is the mod going directly thru cw's legal department and not the departments that we've all been dealing with? Thanks

tandm · 03-14-2009, 04:31 PM

Button

Did you know the cram down bankruptcy bill has passed through the house and is in the Senate now? If it passes the Senate (and I think it'll be heard this month), that will enable a judge to set the interest rate and principal reduce if necessary. I would read through that legislation and talk to your attorney about this. There is a clause in the bill called the "safe harbor" that protects the bank from a lawsuit from the investor should the investor modify the loan in a way that is unacceptable to the investor. Such a protection for the bank does not exist at this time.

gray517 · 03-14-2009, 07:53 PM

unfortunately alot of the teeth of the bill has been taken out and judges will not be reducing principal simply because you are underwater or have a high rate. there will be restrictions on the why and how it is done such as the debtor must have tried negotiations with the lender first and the lender refused to offer an affordable modification, the piti ratios will follow the new govt plan of mortgage payment being 31% of gross income. Which means if your lender offers you a modification down to say a fixed rate of 8% and that would make your mortgage payment at or below the 31% guideline and you decline it, hoping a bankruptcy judge will lower the rate further or reduce the principal, they won't be allowed to! and the first line of the judicial bankrupcty mod will be the same as the govt program reduce the interest rate and extend the term to obtain the required 31% before considering principal reduction. The goal is to help borrowers whose lenders are not working with them to make the loan affordable, and limit the mass influx of people who want to file simply to get their principal reduced because their home lost value, probably 2/3 of the american population has lost a signifigant amount of value and owe more than what their house is worth.

gray517 · 03-14-2009, 07:58 PM

Quote:

Originally Posted by Button

And with the Ch. 13 my $38,000 in arrearges with CW will be removed.

Just curious, where is it going? the standard procedure in any modification is the arrearages or past due interest is tacked back on to the loan balance.

03-13-2009, 07:56 PM	#1 (permalink)
Button Junior Member Join Date: Mar 2009 Posts: 2 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Deal or No Deal? Finally after 14 months of the round and round game with CW, it actually took a filing of Ch. 13 to avoid my sale date. Now that I have filled Ch. 13 they have sent me a notice, "congratulating me" on my loan modification approval. They offered a 100% pay back, 480 month mod at 3.625% fixed. I currently was with a consolidated bill company for debts other than my mortgage. So, do I continue with them and take CW's deal, or continue with the Ch. 13?

03-13-2009, 09:15 PM	#2 (permalink)
Yanqui Senior Member Join Date: Oct 2008 Posts: 168 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Deal or No Deal? Button congratulations. 14 months, wow. What does your attorney say? I am doing the same thing. I will be filing in July.

03-14-2009, 11:20 AM	#3 (permalink)
Button Junior Member Join Date: Mar 2009 Posts: 2 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Deal or No Deal? My attorney and I both love the drop in the interest rate (6.5% to 3.625%). Not loving the 480 months, but the payment is low enough for us that we can make additional principle payments and shorten the term. I think the only difference is that my other obligations in CH 13 will be paid off over 5 years with no interest. Staying with the consolidated credit service is a 3 year plan. I am already 7 months into the 3 years. My interest rates have been reduced as well as my late charges. And with the Ch. 13 my $38,000 in arrearges with CW will be removed. I'm just thinking it really isn't a huge amount of money to go through with the Ch. 13. I would rather avoid it, It was just my only option to stop the sale date literally 3 minutes before my home went up for auction. Funny how I had to force CW to let me pay my mortgage. My attorney just wants me to bring all the paperwork with me on the 25th to court. I think if I show up to court for the hearing, then he is assured the remainder of the $4500. for the BK. My gut tells me to take CW's deal and continue with the credit consolidated company. It is a bit confusing and I don't want to make a wrong decision for my final one. I suppose I should find out if the Calif. BK judge makes any adjustments in interest rates, principle balances or terms.

03-14-2009, 01:33 PM	#4 (permalink)
Yanqui Senior Member Join Date: Oct 2008 Posts: 168 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Deal or No Deal? Well, good luck in whatever you decide.

03-14-2009, 02:06 PM	#5 (permalink)
serenevenice Senior Member Join Date: Dec 2008 Posts: 78 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Deal or No Deal? Button, Did you say that they are not even adding the 38K that you're behind? They are just calculating the payments over your existing principal? That sounds like a very good deal since they aren't doing any principal reductions at this time. With the BK, is the mod going directly thru cw's legal department and not the departments that we've all been dealing with? Thanks

03-14-2009, 04:31 PM	#6 (permalink)
tandm Senior Member Join Date: Jan 2009 Location: Orange County, CA Posts: 163 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Deal or No Deal? Button Did you know the cram down bankruptcy bill has passed through the house and is in the Senate now? If it passes the Senate (and I think it'll be heard this month), that will enable a judge to set the interest rate and principal reduce if necessary. I would read through that legislation and talk to your attorney about this. There is a clause in the bill called the "safe harbor" that protects the bank from a lawsuit from the investor should the investor modify the loan in a way that is unacceptable to the investor. Such a protection for the bank does not exist at this time.

03-14-2009, 07:53 PM	#7 (permalink)
gray517 Senior Member Join Date: Nov 2008 Location: Florida Posts: 627 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Deal or No Deal? unfortunately alot of the teeth of the bill has been taken out and judges will not be reducing principal simply because you are underwater or have a high rate. there will be restrictions on the why and how it is done such as the debtor must have tried negotiations with the lender first and the lender refused to offer an affordable modification, the piti ratios will follow the new govt plan of mortgage payment being 31% of gross income. Which means if your lender offers you a modification down to say a fixed rate of 8% and that would make your mortgage payment at or below the 31% guideline and you decline it, hoping a bankruptcy judge will lower the rate further or reduce the principal, they won't be allowed to! and the first line of the judicial bankrupcty mod will be the same as the govt program reduce the interest rate and extend the term to obtain the required 31% before considering principal reduction. The goal is to help borrowers whose lenders are not working with them to make the loan affordable, and limit the mass influx of people who want to file simply to get their principal reduced because their home lost value, probably 2/3 of the american population has lost a signifigant amount of value and owe more than what their house is worth.

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