Need Help! Wells Fargo remodification

[cmoore]

I need help with my re modification. I was denied today, and they would not tell me why??? The person I spoke with said for me to fax in income/ expenses for household, and call back in one week. I was in court yesterday and was told that my home would be sold next month. I want to continue to try and save my home, but not sure how to do this. Do I need to show a loss every month? Right now we have about $100.00- $200.00 surplus every month. I would be so grateful for any help in trying to save my home.

[Evan Bedard]

Welcome and thank you for joining.

You do not have to show a loss monthly and actually a surplus of around 100-200 is exactly what most lenders are looking for. Can you please explain a little more information about your situation, such as the terms of your mortgage and how much you bring home monthly?

[cmoore]

Thanks! This site has been very helpful to me so far. the term of my loan is for 30 years, I've been paying on it for 6 now. I bought the home for $232,000, and put $40,000 down on it. My monthly payment is $1480.00.

My gross income per month is $5087.92, and monthly expenses $5029.65 ( now this amount is high, could show that it is a little lower, if needed ) So surplus is really only $40.00 or so with this. Now does Wells Fargo go on gross or net? Do I need the numbers to add up for net?

Also I have two rentals as well, does this change things. I have a large family, 7 in household, rentals are to small for us to live in. 1st rental is $1047.00 per month, and still owe $120.000 on loan, payments have never been late on this home. 2nd reatal is $968.67 and $110,000 is owed on this one. Both are part of my gross income, that's the way Wells Fargo wanted it.

However 2nd home is only $300.00 per month for gross due to the fact that we are only able to rent a room out in that home at this time. So $668.67 per month is figuard in expenses at this time, which could change if I needed it to.

Wells Fargo was very helpful at first, but now it seems that I can get no answers from them. As I said before today I was told that I was dieied for pre approval, but was told to fax in info for them to review... ? I don't know what to do. Any information would be very helpful. Thanks!

[jakelabry]

Thanks! This site has been very helpful to me so far. the term of my loan is for 30 years, I've been paying on it for 6 now. I bought the home for $232,000, and put $40,000 down on it. My monthly payment is $1480.00.

My gross income per month is $5087.92, and monthly expenses $5029.65 ( now this amount is high, could show that it is a little lower, if needed ) So surplus is really only $40.00 or so with this. Now does Wells Fargo go on gross or net? Do I need the numbers to add up for net?

Also I have two rentals as well, does this change things. I have a large family, 7 in household, rentals are to small for us to live in. 1st rental is $1047.00 per month, and still owe $120.000 on loan, payments have never been late on this home. 2nd reatal is $968.67 and $110,000 is owed on this one. Both are part of my gross income, that's the way Wells Fargo wanted it.

However 2nd home is only $300.00 per month for gross due to the fact that we are only able to rent a room out in that home at this time. So $668.67 per month is figuard in expenses at this time, which could change if I needed it to.

Wells Fargo was very helpful at first, but now it seems that I can get no answers from them. As I said before today I was told that I was dieied for pre approval, but was told to fax in info for them to review... ? I don't know what to do. Any information would be very helpful. Thanks!

I suspect they turned you down because your payment is already below 31% - it's actually 29%.

[jakelabry]

Thanks! This site has been very helpful to me so far. the term of my loan is for 30 years, I've been paying on it for 6 now. I bought the home for $232,000, and put $40,000 down on it. My monthly payment is $1480.00.

My gross income per month is $5087.92, and monthly expenses $5029.65 ( now this amount is high, could show that it is a little lower, if needed ) So surplus is really only $40.00 or so with this. Now does Wells Fargo go on gross or net? Do I need the numbers to add up for net?

Also I have two rentals as well, does this change things. I have a large family, 7 in household, rentals are to small for us to live in. 1st rental is $1047.00 per month, and still owe $120.000 on loan, payments have never been late on this home. 2nd reatal is $968.67 and $110,000 is owed on this one. Both are part of my gross income, that's the way Wells Fargo wanted it.

However 2nd home is only $300.00 per month for gross due to the fact that we are only able to rent a room out in that home at this time. So $668.67 per month is figuard in expenses at this time, which could change if I needed it to.

Wells Fargo was very helpful at first, but now it seems that I can get no answers from them. As I said before today I was told that I was dieied for pre approval, but was told to fax in info for them to review... ? I don't know what to do. Any information would be very helpful. Thanks!

I suspect they turned you down because your payment is already below 31% - it's actually 29%.

[cmoore]

Do you know if there is any thing I can do to still get it re modified? I really can't afford the mortgage. And also do you know if they go on net or gross when it comes to income. Thanks so much!!

[jakelabry]

Do you know if there is any thing I can do to still get it re modified? I really can't afford the mortgage. And also do you know if they go on net or gross when it comes to income. Thanks so much!!

They use your gross income. I'm sorry, missed something in your initial post - you said you have only been paying on this loan for six months? Is is an original loan or a modified loan? A loan that is only six months old would not be eligible for HAMP period - believe the cut off is loans originating prior to January 2009. If it is an already modified loan that will also affect your eligibility. Only one HAMP per life of the loan and most lenders will require a modification to be at least 12 months old before they will do another modification. Not sure what to tell you except go back to them and insist they give you a reason for the denial and review your case.

[cmoore]

Hi, thanks for your help! Actually I have been paying on this loan for six years.

[jakelabry]

Okay. Is this the first modification you have requested since you bought the home six years ago? Have you ever refinanced this loan?

[SurfwhenUcan]

They use your gross income. I'm sorry, missed something in your initial post - you said you have only been paying on this loan for six months? Is is an original loan or a modified loan? A loan that is only six months old would not be eligible for HAMP period - believe the cut off is loans originating prior to January 2009. If it is an already modified loan that will also affect your eligibility. Only one HAMP per life of the loan and most lenders will require a modification to be at least 12 months old before they will do another modification. Not sure what to tell you except go back to them and insist they give you a reason for the denial and review your case.

Jake and cmoore, I see that you said your Gross is $5087.92 and Expenses are $5029.65. This is a denial for not making enough if you are W-2'd, I would bet money. The reason is that the bank qualifies you for approval based on NET INCOME. If your net income is less than $4700 or $4800, you are not showing a surplus in the bank's eyes, you are probably showing too much deficit.

What's your net?

[jakelabry]

I'm sorry, when did HAMP start using net income? Must have missed that update.

[wizzy26]

They don't use net...although that would be great if they did.....

[SurfwhenUcan]

They don't use net...although that would be great if they did.....

Wrong, they do use net. I'll clarify - They have always used both Gross and Net.

Gross income is ONLY used to determine what your payment will be under the HAMP guidelines. It has no other bearing on approval. If your payment is less than 31% of this amount, end of the road for HAMP. Same if the 31% amount cannot be achieved at least with a 2%/40 Year term (many people do not understand how this works).

You STILL have to qualify under Net Income offset by your Expenses (including the new payment) within a certain range of Debt to Income ratio, meaning you will have to come out with a certain amount of surplus to get approved. Otherwise, you don't make enough money again.

Don't feel bad you didn't know this, it is obscure on purpose and one of the main reasons people get denied.

cmoore, check to see what the denial has done - are they moving you to a Traditional Mod or is your file cancelled? If you want HAMP (Providing you qualify, you will have to rework your financials based on net income.

[soccermom]

they go on gross income and only use the expense of your first mortgage PITI. funny they don't take into account all other monthly expenses. go figure

[SurfwhenUcan]

they go on gross income and only use the expense of your first mortgage PITI. funny they don't take into account all other monthly expenses. go figure

Soccer, I think we posted at the same time and you didn't see what I wrote, but Net income is critical in the evaluation of whether a modification will be approved or denied. I know this to be a fact. forget what you put for gross income - the lender will review your paystubs and use the net when evaluating Affordability in terms of whether you can pay the mortgage and all your other bills. If you can't you are a candidate for re-default and they won't bother moving forward, unless they sense you are hiding money somewhere, then they will keep you chasing your tail.

[SurfwhenUcan]

Thanks! This site has been very helpful to me so far. the term of my loan is for 30 years, I've been paying on it for 6 now. I bought the home for $232,000, and put $40,000 down on it. My monthly payment is $1480.00.

My gross income per month is $5087.92, and monthly expenses $5029.65 ( now this amount is high, could show that it is a little lower, if needed ) So surplus is really only $40.00 or so with this. Now does Wells Fargo go on gross or net? Do I need the numbers to add up for net?

Also I have two rentals as well, does this change things. I have a large family, 7 in household, rentals are to small for us to live in. 1st rental is $1047.00 per month, and still owe $120.000 on loan, payments have never been late on this home. 2nd reatal is $968.67 and $110,000 is owed on this one. Both are part of my gross income, that's the way Wells Fargo wanted it.

However 2nd home is only $300.00 per month for gross due to the fact that we are only able to rent a room out in that home at this time. So $668.67 per month is figuard in expenses at this time, which could change if I needed it to.

Wells Fargo was very helpful at first, but now it seems that I can get no answers from them. As I said before today I was told that I was dieied for pre approval, but was told to fax in info for them to review... ? I don't know what to do. Any information would be very helpful. Thanks!

Also, in the Affordability test, they will accept Rental Income at 75% of actual so make sure you account for that.

The reason they use net for Affordability is what if my Gross was $5,000 and Net was $4,000 with expenses before Mod of $4900. Say my mortgage payment is $2050 PITI or 41%. Great, my new payment will be $1,550, a reduction of $400 per month. Super! But can I afford this payment?
No - After the mod, my expenses will have been reduced from $4900 to $4500. But I am bringing home only $4000. I am still underwater by $500 per month. In the bank's eyes this is a re-default and they will assume I cannot afford the property even with a mod.

This may be over-simplified and nothing is a cut and dried as this, especially your situation (the bank may feel that you need to work harder to rent out to full capacity, thus improving your situation without them having to do anything). But I hope this shows the importance of how Net Income factors into the whole decision-matrix on the lender's side.

[cmoore]

SurfwhenUcan... Thank you for over-simplifying things for me. I called Wells Fargo tonight, and was told "the system was down" and could not review info to why I was not pre approved. However after reading all of these post, I think it is due to my numbers. My net income that I reported to them is $4194.12 ( however I do receive child support of $500.00 month, which I didn't report because I thought it would make my numbers to high, and thought then that it would be based on gross) My mortgage payment is $1480.00 monthly.
It appears to me that the net I reported is still too high. Do you know if it changes if my expenses added in can help? I need to fax the new numbers to Wells Fargo ASAP, but now sure what to do. Any advice on this would be helpful. Thanks again.

[cmoore]

Just one more thing... maybe I'm doing the numbers all wrong? I have some wiggle room in reporting expenses, and income due to the rentals. But still can not figure out how to report all of this. Are there any other ways to lower my monthly payment if I still don't qualify for re-modification? We are not able to refinance the home due to a few other reasons. Thanks again.

[cmoore]

I have an up-date in my info.... Thanks to this site, I called the executive office of Wells Fargo this morning. The rep I spoke with was very helpful, and said that he would be my contact person from this point on.
I found out that I was denied the first time due to code 36. He stated that I had a surplus of $126.00 per month. I also was able to find out that the investor is FHLB, in which the rep said he didn't know who that was. And , the holder is Washington Mutual.
The rep went on to say that he was going to UPS a new package to me , that I should receive on Monday. He was not clear to me as to if it was going to be the Making Home Affordable Program info again , or something new. ( not sure why I could not get an answer on this???)

My question is... (don't want to blow this!)
1. The rep was not able to tell me if my surplus was from My income to mortgage payment %, or if it had something to do with my expenses. ( I can easily raise my expenses if needed)
2.He said I should have copies of bills, and 3 months of bank statements as well, which were never asked for the first time. So is this something different? And a new hardship letter.
3. Do I need an attorney at this point, I really can't afford one , but do not want to lose my home. There is a sell date on my home next month.
4. Also my gross income is $5087.92 with the rentals... and net is $4191.12. Monthly mortgage is $1455.27, NOT $1480.00, in which I posted before.

Thanks again for all of the great help!

[SurfwhenUcan]

I have an up-date in my info.... Thanks to this site, I called the executive office of Wells Fargo this morning. The rep I spoke with was very helpful, and said that he would be my contact person from this point on.
I found out that I was denied the first time due to code 36. He stated that I had a surplus of $126.00 per month. I also was able to find out that the investor is FHLB, in which the rep said he didn't know who that was. And , the holder is Washington Mutual.
The rep went on to say that he was going to UPS a new package to me , that I should receive on Monday. He was not clear to me as to if it was going to be the Making Home Affordable Program info again , or something new. ( not sure why I could not get an answer on this???)

My question is... (don't want to blow this!)
1. The rep was not able to tell me if my surplus was from My income to mortgage payment %, or if it had something to do with my expenses. ( I can easily raise my expenses if needed)
2.He said I should have copies of bills, and 3 months of bank statements as well, which were never asked for the first time. So is this something different? And a new hardship letter.
3. Do I need an attorney at this point, I really can't afford one , but do not want to lose my home. There is a sell date on my home next month.
4. Also my gross income is $5087.92 with the rentals... and net is $4191.12. Monthly mortgage is $1455.27, NOT $1480.00, in which I posted before.

Thanks again for all of the great help!

With your gross income, HAMP would raise your payment to $1577.26. I am not sure why you want HAMP. I am also not sure what your hardship is, I've been looking through the other posts on this thread and can't find any - I'm assuming it's financial.

It's good that you have a contact now. If you have a sale date and it comes time to postpone, make sure you call the Trustee listed on your notice and verify they got word to postpone. Always do this. I have talked to many people who got surprised by a knock on the door by the new owner when they thought their sale was postponed.

I am somewhat of a cynic, but I am betting they will lower your payment a couple hundred dollars, put you in a trial and keep you there until you "Self-Cure" (meaning you start earning more money either through wages or renting at 100% capacity). As long thats that is OK for you as a result, play their game as someone who really gets what is going on with all of this housing mess and you will protect your home. Good luck!

Keep us posted on developments as you go through this new contact.

[cmoore]

Thanks SurfwhenUcan... I didn't explain that I am on disability before. And, unable to work at this time. Also have 2 children in college, and husbands pay cut by 20%, over last 9 months.

[SurfwhenUcan]

Thanks SurfwhenUcan... I didn't explain that I am on disability before. And, unable to work at this time. Also have 2 children in college, and husbands pay cut by 20%, over last 9 months.

No problem, go ahead and submit for HAMP, which should (emphasis on "should") halt the sale while they put it under for review. You will probably get denied on Gross income, so don't be disappointed, but then stay on them to review for a Traditional mod, which willl serve to continue the delay of foreclosure activity.

[we're_still_reviewing]

FHLB Freddie Mac and Fannie Mae are GSE's




On November 20, 2007, Matt Phillips of the Wall Street Journal reported that the Freddie Mac (the Federal Home Loan Mortgage Corp.) reported a third quarter loss of $2 billion. The loss reflects $1.2 billion to cover its guarantees of bad home loans and a $3.6 billion write-down of assets. Freddie Mac, like its sister Fannie Mae, and cousins, the Federal Home Loan Banks, is a government-sponsored corporation established to support home ownership and rental housing. Freddie purchases mortgages and mortgage-related securities, thus priming the credit pump for homebuyers. It also acts as a credit guarantor. It finances purchases primarily by issuing a range of securities in the capital markets. Some observers say that Freddie and Fannie helped fuel the increase in subprime loans associated with the current credit woes.


Source ~ http://www.investmentfraudlawyerblog.com/2007/11/freddie_mac_loses_2_billion_in.html