Loan Modification denied by GMAC

[Kellygyrl]

I’ve been following this site for a while and learning so much. Thought I had all my ducks in a row, called and called and when GMAC was finally up and running w program I filed for a loan modification under Making Home Affordable plan. Sent off all completed paperwork in April, was contacted in May for more info, sent that off and crossed my fingers. I haven’t posted on the blog until now. Figured I’d wait until I had my results. Well they came in the mail yesterday…..And the verdict is:

Turned down for modification by GMAC. (Hate them – poor customer service) With one little box checked on their form letter, it read: “The financial information you provided shows that your income is sufficient to cover your mortgage obligation”. OMG, did they not even read my financial analysis that shows I’m drowning in debt n loans, debt to income at 100. PLUS 1^st mortgage will adjust to a ridiculously higher payment next year? Doesn’t that count? Plus loan org. Freddy Mac, doesn’t that count? This plan is not fair. Why in the world are they going by gross income? My mortgage is 38% of gross income, but after all deductions, my take home looks “gross”.

Here’s my story:
Had a good credit score 720, purchased in CA. in 2005 for $410,000 (lowest I could find in decent neighborhood). Got scammed with a bad interest only loan through family friend, whom I thought I could trust. Then paid big time to get out of interest only loan and refinanced in 2007 (another bad loan, through coworker agent referral, big mistake) now owe $470,000. Both loans with GMAC.

1^st is 30 yr ARM at 7.25%, 2^nd Heloc is 15yr fixed at 8.23%

According to LA county assessor’s, home currently now worth $260,000. To me this is on the high side. Homes up the block selling for $199,000. Gasp and Moment of Silence.

When my loan adjusts, I may need meds because I know I will be having panic attacks monthly trying to pay for something that is so not worth it. Yes, this is my fault because I now have the mortgage plus so much debt. BUT debt for a good cause. Most of the debt is a result of paying school tuition, returned to finish college in my adult years to complete my Bachelors degree – just graduated, finally!

Now I just feel like throwing my hands up (all this hard work for nothing). I admit, I have a stable job with 10yrs of service, however my “older” home is now falling apart and I’m feeling like it’s a money pit. Plus single mother of 1 and want to send him to college.

Right now, I’m playing juggling act with bills and basically robbing Peter to pay Paul, living check to check. I have no life. I want a better quality of life (money in my pocket). Basic toiletries and groceries are simple pleasures. Given my current situation, I’m leaning towards the walk away path like so many others. In my mid-30's and so over this struggle. If I choose to walk away, cash will be no issue, and I could make whopping payment to decrease other debt, but how long before I can expect to see the light of day with a foreclosure on my credit?

Bad odds if I stay, bad credit if I walk away. Don’t know what to do.

I want a do over! Please help anybody.

[Murray12]

Something is not right here. Why did they deny you?

As long as the mortgage payment is more than 31% on your FIRST mortgage then you can qualify. What is your monthly income and what is the mortgage payment on your first mortgage?

[Kellygyrl]

Originally Posted by Murray12

Something is not right here. Why did they deny you?

As long as the mortgage payment is more than 31% on your FIRST mortgage then you can qualify. What is your monthly income and what is the mortgage payment on your first mortgage?

Home Affordable Plan states mortgage payment (including prop taxes and insurance). 1st is 2,397/mo to GMAC. However, I don't have impound acct, prop tax and insurance (although paid yearly) calculates to $521/mo bringing my mortgage payment on 1st to $2,918.

2nd is $516/mo.

Monthly gross income is $7,184, (after taxes and 401K, actual take home is $5,272/mo). I know they go by gross mo income (which I don't think is fair), but by my calculations w gross I should still qualify for some sort of modification. Plus I have other bills/debt. Am I missing something?

They denied me because they say my income is sufficient to pay, even after seeing all other liabilities. This ARM loan is scheduled to reset next year. If I can't get a lower payment, I'm ready to walk away and go back to renting so that I can have enjoy life and the money that I work hard for. Right now I'm constantly broke because the house suck up so much. Don't know what else to do. Should I give up or keep trying?

[Sunbeam]

Looks like your DTI on your first mortgage is over 40%. Apparently someone at GMAC is lacking in basic math skills. Call them and ask them how they calculated your DTI and see how that goes....Good luck!

[Murray12]

No one can answer the question about whether you should walk away or not. That is your own personal decision.

Don't get down. If you are down and about to give up then they won. You have to be prepared for a fight.

31% of your take home pay is $2,227. So that would be your first mortgage payment including taxes and insurance. Small savings but no taxes/insurance at end of year. If you are approved, I believe you have to set up an escrow account and pay taxes insurance monthly. Would that be something that would improve your situation?

I am not sure how they figured out that you did not qualify. What do you have in savings? You can only have 3 months reserves in savings.... or maybe they are saying you don't have a hardship.

[saeta78]

Kellgyrl,

Call the Executive office. Your payment with T&I (which they do include) is more than 31%.

I dont have the phone number with me but call the main GMAC in Horsham PA (u can google it) and ask for executive office. They are helpful.

[Kellygyrl]

Originally Posted by saeta78

Kellgyrl,

Call the Executive office. Your payment with T&I (which they do include) is more than 31%.

I dont have the phone number with me but call the main GMAC in Horsham PA (u can google it) and ask for executive office. They are helpful.

OMG, I was wrong. I just called and they said that I WAS approved. (I'm sreaming right now, yeah). For some reason I never received the workout plan for the 1st. Don't know why not. Was told, the letter I received pertained to the 2nd which I must cont. to pay (understandable). When I received that only, I was rolling with it and breaking down.

He told me that they would resend the workout plan on 1st and that I need to get it back ASAP as it was due back 6 day ago. I was told that right now I am in the 3 mo trail period and technically now overpaid since I had already paid my normal mo payment. What! Am I being punked? I was racking my brain about how to pay everything. Now no payment due til Sept. for $1,220. I thought he was looking at the wrong account. If I hadn't called I would have been all screwed up becasue he told me that if I had made my next reg mo payment, this entire amount for the 3 mo trial period would have been paid in full way too soon and it would look like I could pay reg and I would be denied. Thank God, I called just in the nic of time. I had no idea. I mean, last night I cried on the phone with my mother about this whole thing as she calmly said, "don't give up". This was the strangest thing. Can't figure out whyI didn't get this letter. I never had a problem with any mail. I had no idea that they ever sent modification to me and trust me, I was holding my breath and checking the mail daily waiting for a response from them. I would have been on it. If I had known all this, I would have paid other bills. Oh well, I'm grateful that this should all work out soon. Can't wait to get these papers. Faced donw giving thanks.

Thanks so much for the help. This is the best site on the internet and super helpful. The forum is a wealth of expertise and knowledge and I'm so glad that I found it. It's so great to know that you are not the only one.

When I get the paperwork, I will keep you posted. Thanks again for the insight.

[Murray12]

Great News! Let us know how it turns out!

[osfan]

OMG, a success story from GMAC, do you believe in miracles Jess, there is hope!

[johnandshan]

hello kellygyrl, I was wondering if there were any contacts via email or phone other than customer service that you may have found helpful, Im currently in the process of the loan mod myself..this is awful..any input would be awsome...thanks

[zippsgal]

My situation is very much the same - I was denied by GMAC for my first and they stated that I have sufficient income to make my payments. I did however come home to a FedEx letter on my porch and a two page document with a proposal for a modification to my HELOC! I still don't know what to do! Can I call and negotiate with them? Can I resubmit in an effort to get the 1st modified? I don't know what to do or what to say to them? My agreement for the offer on the HELOC is due 8/20. Any information on how to proceed would be appreciated!
Thank you!

[mistressindistress]

During the trial three month period; how do they report your loan to the credit bureaus?

[~Jess~]

I'm also curious if they've been reporting your mortgage as late during the trial period.

[leonam]

just found this site today and read through your posts-glad things are working out for you! I have been trying to get a modification from GMAC since Jan. and just got another insuficcient income letter. Can you tell me who you worked with or a good phone #? I never talk to the same person twice and they never see to know what is going on. Thanks and good luck!

[devnic13]

Also denied by GMAC - but they have no idea what they are doing. We have hired an attorney.