I desprately need advice... Recently got our first mortgage with citimortgage modified with a HAMP mod. Our second is with Flagstar and I have not made a payment since March 2009.
The house is worth $350,000
1st mortgage is $226,000,00
2nd is $419,000 (this includes the missed payments, original amount was $380,000).
Flagstar made us the offer of 4% interest, 50ARM, 7 year balloon. This was their 3rd offer( I turned down the other 2 offers) and final offer. They told me to take it or they foreclose. We agreed to take it with the intention of once signing the mod we would than try again for a better mod.
The new payment is doable for us but the 7 year balloon is ridiculous because we are so underwater there will be no equity to refinance in 7 years and the whole foreclosure process will begin again. My thought is by taking their offer now we are buying some time and I will try and modified into a fixed for the term loan at a later date! Does this make sense? or should we not sign the papers and see if they are bluffing.
The 2 previous offers I turned down my gut told me they were bluffing, this time I am not so sure as they will get about $70,000.00 after expenses if they foreclose. We verbally agreed to the mod 2 months ago and still no paperwork, according to my negotiator things are moving but at a snails pace! I am trading one stupid loan - interest only, adjustable ARm for a stupid 7 year balloon term! I don't think this should be allowed!
Also your thoughts on this... Flagstars legal dept tell me that Flagstar owns our loan but loss mitigation dept tells me it is a securitized loan owned by investors and the only reason they can offer me a mod is because they are buying back the loan from the investors - has any one heard of that before?
I would love some feed back on what others would do if in this situation - Is there something I should be doing/contacting while waiting for the paperwork that could help our cause.
I look forward to your replies.