WF mod came today 4 mo trial period, pls need advice.

[getmeouttahere]

Our house is 45% underwater, we are 1 month late. WF approved us for 4 month trial for $1750 mo mortgage, that is $900 less on our current mortgage payment. No change on principal and rate. We were hoping that WF would lower our rate in addition to lowering our mortgage. We were hoping also for the principal to be reduced, but then that might be too much for us to even ask. Due to loss of income the new mortgage is still high and will be very tight on our budget.

Should we take this deal? If we accept this mod, but later on we still cannot afford it, can we apply for another mod or is this is a done deal?

Thanks for any advice you can offer us.

[Evan Bedard]

Hi getmeottahere,

Should we take this deal? If we accept this mod, but later on we still cannot afford it, can we apply for another mod or is this is a done deal?

The trial period is a 4 month modification that is being offered by many lenders. After this contract is over you will need to go back to WF and continue for a permanent modification. You may get one almost right away, but they may ask you for updated info as well to see if your financial situation has changed.

[Moe Bedard]

Getting a principle reduction is very, very difficult to get period. I have seen maybe 20-30 in the last 3 years and most often it was the result of a lawsuit or possible litigation.

The trial loan modification are new and there is not really a history of cases to guide us as of yet. As far as getting a better deal later, I didn't read anything in the guidelines that says that you can't. You can always counter the offer and say it is unaffordable and see what they say.

[rockraider3]

Originally Posted by getmeouttahere

Our house is 45% underwater, we are 1 month late. WF approved us for 4 month trial for $1750 mo mortgage, that is $900 less on our current mortgage payment. No change on principal and rate. We were hoping that WF would lower our rate in addition to lowering our mortgage.

I'm really curious how this temporary loan modification works. If there is no change to the loan principle, and no change to the rate, what happens to the $900/month "savings" each month during the trial period?

Is Wells writing this off? Or are they tacking it onto the end of the loan?

[getmeouttahere]

Thanks so much Moe and Evan! Twins or just me seeing double ???

We will ask for a counter offer and see what happens They gave us 30 days to respond. Thanks again!

[Moe Bedard]

LOL..I'm the old man and he is my son Like father, like son.

You're welcome and please keep us posted on your progress!

[getmeouttahere]

Originally Posted by rockraider3

I'm really curious how this temporary loan modification works. If there is no change to the loan principle, and no change to the rate, what happens to the $900/month "savings" each month during the trial period?

Is Wells writing this off? Or are they tacking it onto the end of the loan?

I read that part and it said it will be added to our balance. That's why I'm not quite happy with this mod. I hope they'll keep trying to work with us because even with this reduced in payment they offered it will still be cheaper if we just move out and rent.

[AZnOUT]

Moe/Evan -

With regard to modifications and Wells Fargo, this is probably as good as any to post what seems to be my "wishful thinking" on receiving a modification (let alone a any principal reduction given my situation) as I've been closely reviewing all posts related to Wells Fargo/SunTrust to understand whether my actions will result in foreclosure. My facts are as follows:

Purchased home in Nov. 07 in AZ for $1m, 5% downpayment ($950K balance all purchase money, non-recourse).
1st WF, 10yr IO at 6.75%, $700K balance = $4,428 (includes taxes/insurance)
2nd SunTrust, 10 yr IO at 8.75%, $250K balance = $1,825

Good neighborhood, but decimated by foreclosures...40 transactions this year with 36 short sales/bank owned, currently 20 short/bank owned active listings with an additional 31 not listed but scheduled foreclosures through Sept/October. Nevertheless, my house value is currently between $450 - $600K.

While I've had a rough year personally (loss both father and father-in-law in past six mos) and somewhat financially (i.e., payment for funerals, attorney, mom's housing, meds for grandmothers, etc.), I'm fortunate to have employment to meet my obligations so understand that my financial challenges pale in comparison to many on this board. With the experience of the untimely passing of my father and review of his financial circumstances, I've over analyzed and assessed the things in my life that are important (anything material, beyond securing the future of my family, do not carry a whole lot of weight with me these days).

As a result, I've concluded that I would rather start over and rent for 1/3 of my ownership costs than make payments on such unfavorable terms in a neighborhood that will likely bottom out somewhere at 1/2 my value. With that said, I would still like to stay in our home if the terms are modified in a favorable manner. I expect the bank will not have any remorse when I share my info. and demonstrate that I can make payment but have chosen not to make payment. The downside of foreclosure...credit hit, actual move within the neighborhood, add to the ridiculous levels of inventory for my neighbors. Upside eliminate all debt and start over with significant savings, and pay cash for future housing in the next few years.

Any thoughts on approach other than stop payments (currently missed 2nd and will miss 1st this month) and complete financial information for consideration/initial rejection? Regardless, thanks for the wealth of information as I've been following these threads for over 5 mos now.

AZnOUT

[getmeouttahere]

We decided to not accept this mod and ask WF to give us a better offer. If they turn us down, we'll save our mortgage money and prepare for foreclosure.

[Moe Bedard]

We decided to not accept this mod and ask WF to give us a better offer. If they turn us down, we'll save our mortgage money and prepare for foreclosure.

Do what is best for you and your family. As I have mentioned in many posts before, make the choice that you need to make based on getting educated and doing what is best for you. Everyone will make a different choice and no one is right or wrong in that.

Just be prepared for whatever happens as a result and stay strong. I applaud you for standing your ground.

[Moe Bedard]

AZ,

I am sorry to hear about your year. It looks like you have taken some hits, but are doing OK and have a decent attitude. That is important to have!

Unfortunately, your options are limited because of your income. You are what they call a "collectible account." A rarity these days. Whatever you share or disclose to them may be used against you at a later date. So, be careful when speaking with your lender.

The reason they don't help borrowers such as yourself is because word would spread like wild fire and now even homeowners (millions) that can pay would be walking away if they don't receive a loan modification.

However, this is happening A LOT, but homeowners that do this usually do so by speaking with a qualified attorney that can properly protect and shelter you against any future claims and or wage garnishments.

It looks like you have done the Ben Franklin and you have found that the positives of walking away out number the negative. I say get a few legal opinions to further educate yourself on the possible implications of walking away in AZ.

I wish you the best!

[rockraider3]

Originally Posted by Moe Bedard

Unfortunately, your options are limited because of your income. You are what they call a "collectible account." A rarity these days. Whatever you share or disclose to them may be used against you at a later date. So, be careful when speaking with your lender.

Moe - Do you have any wisdom for those who might be grouped in with those they are considering a "collectible account"? A loan modification and/or short sale are both going to require disclosure of financial information, income verification, list of assets, etc. How should someone respond when asked for these documents? And is there a way around providing them?

I actually don't think I fit in that category, as my front end and back end DTI are pretty poor. But at the same time, simply based upon my income and retirement account assets, someone could make a case that I'm not too bad off. So I'm pretty hesitant to share that information with any creditor for any purpose.

[getmeouttahere]

Hi Moe,

Thanks again for your great advice. After going back/forth about the mod, we just realized it is a good offer. $900 is a lot of money, but it won't hurt if we request that they lower it a little bit more. If they say no, this time we decided to take it I guess we just needed time to process all the info to make the right decisions. We will call them on Monday and hope for the best. I'll update the boards then.

[soflamom]

Can you please point me in the right direction/thread for information on a Wachovia MAP modification? I've been trying to modify since April and will have my first late payment on July 15th. Our hardship is a little different - I am staying home to take care of my daughter who was recently diagnosed with Leukemia. I was in Real Estate before that and didn't bring home any money anyway. I am the only one on the mortgage and my husband's income isn't quite enough to make our expenses (48% DTI). I have been unsuccessful with Wachovia in agreeing to modify a current situation. They say I'd have to be 30 days delinquent in order to be reviewed for a modification. On July 16th I plan on calling for the interview.

[PERSISTENT32]

I have a Wachovia loan and I was 6 months late. When I first was late I called and they set me up on a repayment plan because I was going to fall 2 months behind. The amount was too much for me to maintain. I then fell behind on those payments at the beginning of the year 2009 after I had to go on STD due to the birth of my son. Called Wachovia to get assistance..via loss mitigation. They totally suck. If you are late they will help you more. I am not telling you to become late. However, they will help if you are. You may want to try calling loss mitigation first at 866-642-8608 for assistance with being late. If you have no income they may not help so you may want to let them know you have something coming in as far as income. If you are going for the HAMP program they at least want you to have a surplus at the end of the month. " I know it doesn't make since" but you should have at least 100-200 at the end of the month for assistance. Wachovia Executive Team number is 866-642-9407

[soflamom]

Thank you Persistent32!