Modification offer

[kshannondc1]

This morning we just received a modification offer from our equity line company. It fixes the rate at 5% for two years and then it goes to 7.4% for 28 years. It originally was a 15 year loan and now it goes to 30 years. They gave us only today to sign and return documents and send a "down payment". But, it must be done today! I don't feel comfortable with this at all. Also, it says that our equity line would now be considered a mortgage which I don't know the difference. Please, does anyone have any idea of what a normal modification should be?

[Moe Bedard]

It sounds like they hold the equity line and they are now securing the loan like a 2nd mortgage in the modification? Now, it is like a credit card. If that is the case, this is the first time I have seen that and it is a bit shady.

I say get a lawyer who knows mortgages and real estate law to reviews for an hour or 2.

As far as the 15 to 30 years. Well, that is a bit of give and take. I am sure the 30 year amortization schedule helps a lot on reducing your payments. So this may be an OK deal. Not the best and if you don't like it or are uncomfortable where you cant afford it, you can counter them and tell them no. But then you run the risk of no loan modification or the reward of a better one.

It's a bit of a gamble to counter, but that equity converting into a secured mortgage may be an issue.

[kshannondc1]

Yeah, I thought that might be shady. Just because it made sure to mention that it would now be considered a mortgage instead of a line of credit. I wonder if it changes my rights in any way? Is it better to have a line of credit? Or is there any way to drop the loan since the equity isn't there?
What was the most shady is that we just received the paperwork today while my husband was at work and it was dated to state that they would require an upfront certified funds today and the documents signed today. If they have to rush me, the deal must not be very good.
Have you ever heard of a modification that was temporary? The two year thing really bothers me.
Thanks so much.

[kshannondc1]

Does anyone have any idea if this two year temporary lowered rate is normal? I am afraid that if I settle for this, we will end up in the same position in two years. Do you think I could counter offer?

[B Stevens]

Is the difference the line of credit is non secured debt and the mortgage would be secured? Do they have the property as collateral now? If not, it is like a credit card debt and they are trying to secure that debt with your house.

I do not know your exact situation but how does a company who owns a second on your home when it isn't even worth the amount owed on the first? If they made you sell it, they still wouldn't receive a dime because all the money would go to the first mortgage.

I would explain to them you are not in a temporary hardship and they are offering you a band-aid for only 2 years of a very serious financial problem. I wouldn't approach them as "they can do better" but I would tell them you are concerned about the long run and you do not want to lose everything in 2 years from now.

As it was mentioned above, let a real estate lawyer look over it for an hour or so.

[kshannondc1]

I just recieved an offer for modification on the first. I can't believe it really. All it is, is an offer to put the missed payments on the back of the loan. No lower rate, no longer term, nothing. I'm not asking for help because I don't need it. I hope that everyone else isn't going through this. The house down the street was foreclosed on and just went up for sale for $178,000. At what point to I just walk away. I owe $265,000 on my house that was worth $365,000 three years ago. I've been responsible all these years and I've never missed a payment or have been late 'til now. We actually did the worst thing ever and had cashed in retirement to try to stay on top of things thinking they would turn around but they didn't. We decided to counter with these lenders. Why not? If we don't, we will end up right where we are again in no time.

[PERSISTENT32]

Contact NACA or check out the website NACA.com.

[kshannondc1]

Our first mortgage holder, Morequity, agreed to extend the term of our loan but then said that they were shocked that they would agree to that even. They said that our equity line is not included in our housing expenses so it isn't counted when figuring the 31%. How is an equity line that is attached to our home equity not considered a housing expense under the "obama plan"?
Also, the equity line, where there is no longer equity to sustain, doesn't want to help much either. They agreed to a temporary APR at 5% for two years then it goes to almost 8% and we would be changing it to a mortgage.

Another concern is this hard sell rushing that the companies are doing. They keep saying you have to decide right now and put a huge down payment and we will not be offering anything more. But you have to decide now!! The equity line actually fed ex'd documents that had to be signed and money returned that day. I wonder what rights I am giving up or if they are just playing hardball?
Any opinions?
To top all this off, a house that went into foreclosure is up for sale at $178K and I just found out that they are entertaining offers at $120K because apparently the previous owner completely gutted the entire house including cabinets and fixtures and appliance, decking, everything. So, our home value is going to drop even further!
Help!

[kshannondc1]

Ok, my husband called our 1st Mortgage company, Morequity, to discuss a resolution to all this and they said that they are in the middle of a transition into a new "government back modification program". They gave him no details. Can I ask if you know what they are talking about? I guess all is on hold? All of these ups and downs have my anxiety going throught the roof!