Investor that is current need Mod. help!

[Dan123]

Hi *** and fellow investors---HELP

I am new to forum. I read most of it last week.
You seem to know what you are doing and mentioned an Excel worksheet you had available to list mortgages, expenses, etc when putting together the loan mod. package. My problem is I AM CURRENT on all my loans.

My challenge is I buy small homes to rent out in Northern California. I am not a speculator but have 80 rental homes. I have done this for 15 years. 3 years ago, when money was available,I refinanced 27 homes with 10 different lenders and since the values are half or the loan amount and I am getting more vacancies, I am trying to do Modificaions with all of them.

An example, if my note is for $120,000 fixed, interest only for for 5 years and the houses around me are now selling for $40-50K (the bank's share would be about $30-40K), and I WANT TO DO A MOD, and not lower principal, why would all the lenders not be running to me saying "YES-YES'.

I would like to lower the payments about 40-50% for 5 years, while my rents go up and the market stabilizes. So far, CitiMortgage is the only one talking to me seriously.

The banks ask me for so much info, paperwork and tax returns that I am not sure the person at the bank can understand my situation with so many rentals. I don't fit the template of 31-38% of income going to mortgages.

If I have to let some of these homes get forclosed, how are my rental forclosed homes any different than a home owner. Both affect the marketplace and both are a BAD deal for the bank.

Perhaps if you had some kind of a summary Excel template, i could put it together and have the modifier become more comfortable with my situation.

Thanks for helping with my frustration.

Regards,
Dan Shea, Northern California

[Moe Bedard]

GMAC has a good one, but you will have to tweak it to fit your needs........
http://www.gmacmortgage.com/pdfs/Financial_Analysis.pdf

also the Home Affordable modification wouldn't apply to these loans as it is for the owner occupied principle residence only.........so the 31-38% target is not applicable to your loans.

[HopingtoFind]

Hello Dan...

We have a couple investment properties that I was able to modify with Chase and Bank of America. We are also underwater on these properties with interest only payments. Our interest rate was reduced from 6.5% to 4.5% fixed on one loan and from 6.37% to 4.37% fixed on the other... both extended to 40 years. This is considered to be a successful modification... and with all that our payment went down by $300 on each. I am possibly a little negative on both if fully rented...

I just want you to be realistic with your expectations. How much is your interest rate on these loans, because 40% to 50% reduction in payments is very unrealistic with loan mods unless they reduce principal and they are not doing that at this point.

You mentioned that you only refinanced 27 out of 80 properties... what if you didn't have those 27... would your cashflow improve dramatically?
I can't see values going back to what they were in the near future and franckly will not continue holding my investment properties if there is no chance of principal reduction.

[Dan123]

Thanks ***

[Dan123]

Hopingtofind
Thanks for info. CitiMortage has not given me formal approval on 4 loan mods, but they suggested they would look like this. Current loan of $120k, 7.5%, current payment of $750. They will change, for 2 years loan to 3.5%, interest only, at $350 month payment, they probably a 40 year fixed at 7.5% fixed after that.

My rentals are at the affordable end of the market, with many section 8 tenants. Rents are actually going up and vacancies down, so I want to hold them for monthly cash flow. The modifications will help on some of the properties that don't have as good cash flow. That is why I do not want to walk away. Plus, there is a whole new generation of renter these days. This will continue to put upward price pressure on rents.

Thanks for you time and comments.

Dan Shea, Northern California investor

[HopingtoFind]

Dan... Just curious, I am also in Northern California... where are you rentals located. I know that in a lot of areas rents are going down and it is harder to find tenants.

[Dan123]

Hopingtofind,

Rentals in Fresno and West Sacramento. Rents are actually going up. My homes are at the lower more affordable end of the market. Some Section 8 government assistance. Those are good because I don't need to worry about their jobs. If they have a job and loose it, HUD will pay all or some of their portion.

Even though the homes are worth half the mortgage, if I can get the payments modified down, (no principle reduction) I can hang on until the market sets to some state of reasonableness.

[Dan123]

***
Would please post the link to the good contact phone numbers you have at Wells and other banks. I have loans serviced by ASC, America's Seriving Co (a division of Wells). Do they work the same way as Wells with the mods.

[Moe Bedard]

Dan...........

list the lenders that you are working with here.

[HopingtoFind]

Dan... we have couple of duplexes near Sacramento... Placer county, I guess we had to lower rents this year.

It is a good thing yours are going up... have they been going up just recently?

[Dan123]

Hopingtofind,

For you information, here are the max amounts Section 8 will pay for rents in Placer County. Sec. 8 pays a portion and tenant pays part. Most Section 8 tenants tend to stay in a home longer than a non-Section 8. Plus they are never in the market to buy a home and move.

Studio- $715
1 Br -$813
2 Br -$992
3 Br -1431
4 Br -1641

The HUD inspector will look at the going rents in your area, the house, bedrooms,etc and determine a price. I do not have any more problems with the tenants an non Section 8. In fact they tend to be better because they do not want to do anything to jeopardize their voucher. Most HUD offices have and on line list of houses (your rental) that are available.

Follow up with me it you want more info. By the way. Here is the big question. Are you managing and placing tenants or is a management company doing it? Big difference.

[Dan123]

Hi ***,

Here are the lenders I am trying to get mods from for my rental units. Only Citi is talking to me seriously. I am current and have great credit, but with repairs and vacancies, my cash flow and reserves are way down. If I can get monthly payments down, I can keep the houses that are way underwater, buy getting better long term tenants and raising rents. (rents are going up for my properties).

America's Servicing Co (part of Wells Fargo_
Aurora
Countrywide
Am. Home Mortgage Servicing
CitiMortgage
Chase-JP Morgan
Washington Mutual
EMC
Wilshire
Indy Mac
Everhome

Thanks for your time. Dan Shea

[HopingtoFind]

Originally Posted by Dan Shea

Hopingtofind,

For you information, here are the max amounts Section 8 will pay for rents in Placer County. Sec. 8 pays a portion and tenant pays part. Most Section 8 tenants tend to stay in a home longer than a non-Section 8. Plus they are never in the market to buy a home and move.

Studio- $715
1 Br -$813
2 Br -$992
3 Br -1431
4 Br -1641

The HUD inspector will look at the going rents in your area, the house, bedrooms,etc and determine a price. I do not have any more problems with the tenants an non Section 8. In fact they tend to be better because they do not want to do anything to jeopardize their voucher. Most HUD offices have and on line list of houses (your rental) that are available.

Follow up with me it you want more info. By the way. Here is the big question. Are you managing and placing tenants or is a management company doing it? Big difference.

That is not bad... We actually had to lower one of our units.. it is 2/1 very nice duplex, but not a central location.. so we had very few people looking at the original price of $950, we actually had PM advertise it. Then we switched PMs and lowered price to $850 and rented it out within couple of weeks. Few years ago we were renting these for $975 easy... I guess we'll keep section 8 option in mind. Do you know anything about Housing Authority in Placer.. I heard a lot depends on how easy they are to deal with.

[HopingtoFind]

Originally Posted by Dan Shea

Hi ***,

Here are the lenders I am trying to get mods from for my rental units. Only Citi is talking to me seriously. I am current and have great credit, but with repairs and vacancies, my cash flow and reserves are way down. If I can get monthly payments down, I can keep the houses that are way underwater, buy getting better long term tenants and raising rents. (rents are going up for my properties).

America's Servicing Co (part of Wells Fargo_
Aurora
Countrywide
Am. Home Mortgage Servicing
CitiMortgage
Chase-JP Morgan
Washington Mutual
EMC
Wilshire
Indy Mac
Everhome

Thanks for your time. Dan Shea

Dan... the duplex I was talking to you about is actually with Chase and I was able to modify it they lowered interest rate from 6.37% interest only to 4.37% fixed reducing our payment by about $300. You should definitely keep trying with them. *** will provide numbers to call.

[Dan123]

Hopingtofind

Thanks for the Chase info. It is always nice to see light at the end of the tunnel. If I can lower payments by $300 on 20-30 loans, it will carry me while the market changes--someday.

I have a good relationship with Section 8 in Yolo and Fresno. If you go to Placer and say you have a vacancy you want to fill with a Sec. 8 tenant they will be very helpful. They depend on us landlords to house their clients. I strongly suggest you go in and talk to them.

See if their waiting list for Sec. 8 is closed. It probably is and has a 2 year backlog. Obama's budget has a big new chunk of funding for more Section 8 vouchers. When that happens, any day now, the waiting list will be processed and the people will be looking. I would say even more funding will be going to the program, given the number of folks loosing jobs, etc.

BTW, you choose the tenant after you do you screening. Section 8 has nothing to do with that. You can reject them as easily as anyone.

When the tenant wants your unit, they notify Sec. 8, who schedules an inspection. No big thing. Safety, now peeling paint, locks, working windows, strapped water heater, etc. The then agree or slightly change the asking rent and specify the portion they will pay each month.

Stay with it. I is really worth your time. You may be getting more units, seeing as everything is on sale.

Dan

[Moe Bedard]

ASC:
1-866-398-7569
Aurora:
1-866-519-1456
Countrywide:
1-800-669-0102
Am. Home Mortgage Servicing:
Fax Hardship Letter to.......
Jeanne Drake
Fax 1-866-642-4196
Phone 1-949-784-6011
CitiMortgage LoanSafe member number
1-866-255-3901
Chase-JP Morgan
1-800-242-7399
Washington Mutual
1-800-918-4029
EMC
1-877-362-6631
Wilshire
1-888-952-7339
Indy Mac
1-877-908-4357
Everhome
1-800-669-7724

[HopingtoFind]

Thanks for the advice in regards to Sec. 8... if we have a unit open up, I will look into that, there is just too much to worry about right now, just trying to plug up other holes. At this point I am just barely breaking even on the property so will see how it goes...

Best of luck to you with your mods.

[Dan123]

Thanks ***
Dan

[Dan123]

I own rental property. I keep getting the run around from many banks I have loans with. I am ready to stop making payments on some. My credit will be hit, but I am resolved that when I stop paying they will either do a modification or they won't.

Example of a loan. $120 K at 7% interest only, $700 month. The current market value of home is about $45 K. (not counting their carrying costs and real estate commissions).

Why would they rather take back the property than do a modification, keeping the same principal but lowering the monthly payment about 30%?

Seems win-win to me. Any comments. Thanks

[dandelion salad]

Originally Posted by Dan Shea

Hi *** and fellow investors---HELP

I am new to forum. I read most of it last week.
You seem to know what you are doing and mentioned an Excel worksheet you had available to list mortgages, expenses, etc when putting together the loan mod. package. My problem is I AM CURRENT on all my loans.

My challenge is I buy small homes to rent out in Northern California. I am not a speculator but have 80 rental homes. I have done this for 15 years. 3 years ago, when money was available,I refinanced 27 homes with 10 different lenders and since the values are half or the loan amount and I am getting more vacancies, I am trying to do Modificaions with all of them.

An example, if my note is for $120,000 fixed, interest only for for 5 years and the houses around me are now selling for $40-50K (the bank's share would be about $30-40K), and I WANT TO DO A MOD, and not lower principal, why would all the lenders not be running to me saying "YES-YES'.

I would like to lower the payments about 40-50% for 5 years, while my rents go up and the market stabilizes. So far, CitiMortgage is the only one talking to me seriously.

The banks ask me for so much info, paperwork and tax returns that I am not sure the person at the bank can understand my situation with so many rentals. I don't fit the template of 31-38% of income going to mortgages.

If I have to let some of these homes get forclosed, how are my rental forclosed homes any different than a home owner. Both affect the marketplace and both are a BAD deal for the bank.

Perhaps if you had some kind of a summary Excel template, i could put it together and have the modifier become more comfortable with my situation.

Thanks for helping with my frustration.

Regards,
Dan Shea, Northern California

Hey Dan-I guess I don't know how this works either. I have been in this house for 25 years and got stung for a refi by a predatory lender-. I had severed my r achilles tendon at the time and was pretty heavily medicated-a group called Rebuilding Together was working on my house-did all this tearing up on my garage and fence damaged time after time between my house and apt bldg next door- then april 29 came-all these people showed up-they keep you occupied while they do what they want-used to be called Christmas in April- and then other guys said work on garage not in mission statement. Oh, never mind-you are hurting too. I have no family or resources, or assets but a 20 yr old truck and a *** that wont come in because I'm so stressed. But the Sponser for the work was World savings-I've got all their cards still.I think she worked with the broker,whose girlfriend worked for world-the sponser with World told me it was a great product, tho I'me on fixed income. House is not home any more-its old a 1924 craftsman bungalow on SF Peninsula. Anyway World, now defunct aka Wachovia-soon to be Wells Fargo -after one person told me I could get a refi for $200 less than my now payment- I used all my savings trying to get stuff fixed Rebuiding Together tore up, though they did give me a roof with a 2 year warrenty. Now Wachovia says I'm not qualified for ANY loan.......My doctor's had me on the Anna Nicole regimen, and I totally understand why she seemed so loopy on her show. At least I'm scared straight on top of totally terified, The ext. that said I qualified is not working. I posted under My California walkaway yesterday, and got the message " posting being reviewed". After being encouraged and scammed by 2 realtors just before the crash, finally got an honest Realtor who told me Nov last to stop paying and save to move as selling hopeless. Lord-everyone seems to be scamming now-ok-sorry. I get started and the anxiety carries me away.I am not a negotiator. Easily baffled by BS. Since you rent houses, can you tell me how or if I can rent something , maybe in Oregon, since at least they have water, If I walk away and send in keys? I owe about $342,000 and Zillow, per Wachovia says I Zillow at $350,000 and zillow is usually high. I'm current, but think I should stop paying per all the advice everyone gives me. But my FICO was 802 last year, and I was looking for a mobile in medford-thinking I could keep my *** and maybe it'll feel like home. But I've got this thing about my good name, even though after mtge and utilities, car ins and all recurring stuff I've been living on about $180 a mo for everything for 2 years. Please tell me about getting a rental? I've lived here so long I don't even know how to do that, especially since they ask about bankruptcies on rental app. was ok'd by 2 mobile parks, but after I made it home I called the sellers and they said the $3000 cash i took with me was gone. they resold the mobile after I came home. I have the hand written receipt, but realized I couldn't take care of the mobile by myself-it was a 5th wheel and tiny and my glasses were broken and when I finally recovered from the drive though the husband told me I had time to save up to pay, the receipt said bal due upon ok by park. I'm wondering what happened to my brains-couple long gone, tho I did get their drivers licence numbers. They were living on the wifes disability, and wanted to move to family. No blood out of turnip-besides which the wife pretty much has same disease process as me. Some quick reply. But if you do read this, would you as a landlord rent to someone like me? I'm kind of getting worse and can't do yard work. But I'm paying $2174.30 a mo now. and I think the stress is killing me. I'm sorry your business is so hosed now. I'm trying to trust God but realize I need a place to go I can get to on my own-scared of CA policies. As a landlord-Got any advice for me about renting after walking away? Mary

[HopingtoFind]

Originally Posted by Dan Shea

I own rental property. I keep getting the run around from many banks I have loans with. I am ready to stop making payments on some. My credit will be hit, but I am resolved that when I stop paying they will either do a modification or they won't.

Example of a loan. $120 K at 7% interest only, $700 month. The current market value of home is about $45 K. (not counting their carrying costs and real estate commissions).

Why would they rather take back the property than do a modification, keeping the same principal but lowering the monthly payment about 30%?

Seems win-win to me. Any comments. Thanks

I think after Obama plan came out lenders are simply enundated with modification requests. I think their priority is to help a homeowner who occupies their home and is in default, next on the list is the homeowner who occupies their home and is current.
Investment properties that are current are the last ones on that list...they figure if you're still paying why should they bother.

The only lender I am familiar with from your list is Chase, were they able to do anything for you?