Am I insane to apply for HAMP mod?

[DaniNJ]

I'm a small business owner in NJ. Husband and I bought a condo in 2005 -- mortgage in my name only because I had a better credit score at the time. Bought our current home in 2008 with plans to sell the condo, but then the market dropped and we were suddenly underwater. Rented it out at a loss for a couple of years, then could no longer afford even that (bad economy wrecked our business) -- so we stopped making payments and started trying to short sell. Our first short sale offer was approved, but buyer lost his job right before closing. Second offer, buyer lost job again. Third offer walked because the bank was taking too long. Fourth offer (offers now down about $100K, along with home value) was rejected by our servicer -- Seterus -- because their appraisal was higher than our real estate agent's comps. So now we are applying for Deed in Lieu.

First: 317,429Second: 40,903
Market Value: 235,000

Seterus will not proceed with DIL unless Second (HELOC) agrees to 6%. Second is asking for an additional $15,000, which we don't have at the moment.

At this point, I am really wishing I had just let the bank foreclose in the first place, instead of trying to ss. I thought it was the right thing to do, but realize I would be in a better situation now if the foreclosure was over and done with.

Although condo was our primary residence for 3 years, it is now considered investment property -- so we don't qualify for most of the government mod programs, or even the limit on deficiency judgements under NJ law (as I understand it).

We have sent servicer mountains of paperwork at this point, so they know that our small business is slowly recovering -- and also that we have are now slightly over the income limit to file Chapter 7. I know deficiency judgements are uncommon in NJ, but I am afraid I might start a trend!

What would you do in this situation? We don't really have the discretionary income to start making payments again... but we might soon (depending on how the economy and our business goes). Is it even possible to refinance with 3years of no payments?

Ideally, I would like to complete the Deed in Lieu, but I don't know how to get the 2nd to agree.

Would love to hear anyone's thoughts!

[Cat Damiano]

Hi DaniNJ,


Welcome to the forum and thank you for joining............

In N.J. foreclosure is taking 800+ days to complete so you would have some time to save up for any type of negotiation.

Bottom Lines: Foreclosures in New Jersey now take an average 849 days - pressofAtlanticCity.com: Business


Here are some other members going through the process in N.J. for you to see what they are doing.


Chase won't accept offer. Walking away in NJ. Do we do a deed in lieu?

Walking away in New Jersey

Postponing Foreclosure in NJ. IS your State on-board?

[DaniNJ]

Wow ... just saw the news about new HAMP rules extending the program to rental properties. This will expand the options for all of us

[Justcharlotte]

New Rules on Hamp to rental properties? I would imagine that would be somewhere on this site? thanks C

[Justcharlotte]

This is what I have found on web...

"The changes in HAMP do not take effect until the end of April, but a Treasury spokeswoman said any struggling homeowners should reach out and seek foreclosure prevention counseling immediately. That way, they can learn their options, which could include trying to hold on until the new HAMP is ready"

[Cat Damiano]

Justcharlotte,

There is a thread going on the forum about this information here;

http://www.loansafe.org/forum/loan-m...guidlines.html

[DaniNJ]

Have any of you been successful in applying for a HAMP modification for a rental property?

It has been four years since our last payment on this property. In that time, I have been trying (unsuccessfully) to accomplish a short sale or deed in lieu. All of our short sale offers have been rejected, and our second would not agree to the deed in lieu, so even that was impossible.

When we stopped making payments, our small business had failed and we had virtually zero income. Now (four year later) my husband has been employed for 2 years, and our small business is now in the black again (although we are not back to pre-financial-crisis income levels).

After four years of faxing in worthless paperwork, I wish we had just gone straight to foreclosure in 2009 -- if we had, this might actually be over with! I am so afraid of going down another useless rabbit hole in attempting a HAMP mod ... the only reason I'm even considering it is the threat of possible deficiency, which I imagine is growing more probable as our income is improving (and the bank is obviously aware of this upward trend thanks to four years of faxing...)

If we resume making payments (even what we paid before) we could probably rent the property out with only a small monthly loss. But I have no idea if we will qualify for HAMP under the new rules for rental properties, and can find no information on what it takes to qualify under the new rules.

Since the rental property mortgage is in my name only, would it be possible for us to refinance under my husband's name (he still has a good credit score)?

We currently have a tenant in the unit paying way less than market rate ... but rents seem to be rising in the area. However, three of the four condo units in our building are in some stage of foreclosure, and the condo association is totally broke -- so if I modify, I will probably have to take on all responsibility for building maintenance, etc.

What would you do???