Unusual situation do you think I can mod?

[eric3]

I have a $1 Million loan with GMAC with a low 5% interest rate that begins to adjust April 2010. I am current and I have some equity in the home.

I work for myself and my income is very erratic even normally. It ranges from 0-30K per month but it has dropped alot in 2009 to virtually nothing. I would not be able to qualify for this or a modified loan on the current income. But I have quite a bit of savings to make payments for more than a year, and I expect the income to come back up at some point.

I am really just hoping for a reduction in interest rate and/or an extension on the time frame of the rate adjustment so that I can stay current from my savings and buy some time for my income to come back up.

I assume this is not possible under the Obama plan but is it possible another way. What do you suggest for a next step?
Thanks

[muntingangel]

Hi Eric,

Sorry, but i dont know the answer to your question, but i was wondering about what kind of job u do to be able to make 30k a month? Just curious cuz im a stay home mom and needed to see if i can get a work at home job. Sorry if i sound nosey. Good luck on your situation though.............

[B Stevens]

While talking to Wells Fargo about my adjustable rate, I was told the gov't rate is holding at 2.75% and if my first adjustment were to happen tomorrow, it would be reduced down to 4.75% (2% higher than the government).

[Survivor_in_KY]

Not sure where you got the government "rate" cause that's not what my (trial) mod is at ... each investor does there own thing and if one can be at the (31-38%) threshold and have a higher rate... so be it!

Couple of thoughts for you....

Interest rates are going down, your adjusted rate may be lower than 5% - if not, request the extension *at that time*, as this would/could be a hardship if payment is significantly higher.

You could always negotiate/request a cap at 5 % or a fixed rate through GMAC (without using the Obama plan since you don't qualify).

Typically you need to show true hardship to modify. That would take 2 months drop in income (or a significant increase in debt, such as a higher payment on the reset), provable by bank statements. However, they also will want taxes (schedules and all) and proof that you have no substantial savings/investments to carry you through the hard times - this is where you don't qualify.

You should also investigate a traditional refinance. With equity, savings, and good credit (no missed mortgage payments), I would try the local bank (several acutually) and see what they propose. Create some options to consider. You could possibly use your savings as a down pay and reduce your monthly house payment significantly. However, the bank also likes money left over for emergencies, so I wouldn't use more than half of savings in this scenario.

You'r actually doing pretty good compare to the rest of us. My savings wasn't enough to last a year (silly me only had 3 months). I sure hope your job is stable, times are tough right now. I have been unemployed 16 months now!

Good luck!!!

[Survivor_in_KY]

Ooops can't edit, I wanted to add that...

I think your proposal to extend the 5% another year is reasonable and would be a valid request. Couldn't hurt to ask.