After 8 1/2 months with Welld Fargo

[B Stevens]

It is time for me to make a decision

Beginning here 5/1 ARM I/O Wells Fargo Mod

and then today -

After my paper work was faxed to a M. Heil at WF Exec on 8-28-09, I received a phone call today letting me know I was too far under water to get a permanent refi to a fixed rate. I am not late on any of my payments. My investor is not Fannie Mae or Feddie Mac so they are not willing to reduce principle or HAMP me.

I was told in an effort to assist with my hardship, they would lower my interest rate on my I/O to 3% for 5 years. This would bring my 1st down from $2900 a month to $1975 a month. Taxes and Insurance are included on both. Without taxes and insurance, it is $2145 reduced to $1225. No trial period, no back end balloon. It seems by working out the numbers, my investor (whoever it is) is basing the numbers on the current value of the home and the current I/O interest rate (maybe .5% less) than the current rate. So they obviously based this on the cost of me defaulting with no fight and what a new buyer would pay.

Now the hard part. M. Heil told me there was no other option available with my current situation. If I do not accept it, there won't be another option.

Option 1 - Take the deal. This saves me the trouble of moving and about $50K over a 5 year period. But it also is a new contract and the fraud I found will be null and void leaving me with no legal power in 5 years when this MAY become an issue again.

Option 2 - Reject the deal. Stop making payments all together, claim fraud and breech of contract. Delay the non judiciary forclosure for about 1 year at least. I could save about $45K in 1 year of no house payments and have my wife be the primary buyer on the next house with that down payment.

I do not have the contract in my hands yet to read any fine print. What to do, what to do?

[Evan Bedard]

Hi B Stevens,

Option 1 - Take the deal. This saves me the trouble of moving and about $50K over a 5 year period. But it also is a new contract and the fraud I found will be null and void leaving me with no legal power in 5 years when this MAY become an issue again.

Option 2 - Reject the deal. Stop making payments all together, claim fraud and breech of contract. Delay the non judiciary forclosure for about 1 year at least. I could save about $45K in 1 year of no house payments and have my wife be the primary buyer on the next house with that down payment.

I do not have the contract in my hands yet to read any fine print. What to do, what to do?

Your answer is really going to come down to if you want to remain in your home or not? You have achieved so far a great modification which in fact there will most likely be no way to get better.. Its true you can save up a lot of cash before the home goes into foreclosure as it will take time...

[getmeouttahere]

I am not a financial adviser, but the second option sounds very good. If you can save 45k and buy a cheaper house, why not? Everyday I live in this 390k house we bought and is now worth 190k the more I want to live here for free, save the money and buy another one to my liking. The house we bought, the windows don't even open!

[getmeouttahere]

I have to add --- the counter tops are garbage, the woods on cabinets peels off! This is a brand new house too!

[dan m]

i know my opinion isn't helpful but uck it. if the house is too underwater for them to help with your interest only loan, than maybe its too underwater for you to keep paying them. i'd walk. i'd walk right around the corner and rent the same kinda house for less. really.. interest only.. atleast if something went wrong with the house the landlord would have to pay to fix it. don't be afraid. stand up for yourself

[getmeouttahere]

Please let me add another one! The drainage tube are made of plastic, now they are all busted and flooding our backyard and they are only 3 years old! These son of a @**SA@@)3** used the cheapest materials to sell a house and then WF is harassing us for full payments us even though we are on 4 mo trial mod!!!

[caldwellb02]

Sounds to me like there is a lawsuit in your future re: the homebuilders, if you decide to try to keep the house.

[getmeouttahere]

Originally Posted by caldwellb02

Sounds to me like there is a lawsuit in your future re: the homebuilders, if you decide to try to keep the house.

Please, if your post was meant for me, please tell me how to start a lawsuit against these sh**heads. I am so mad. Should I tell WF about what a crappy house they sold us? They built these houses that used to be fields and next to canals, now bugs are coming out of shower drains. There are spiders everywhere, mosquitoes, flies. Gah!!! WF should pay me to stay in this house but since they took all of our money we have no choice but to stay here. I am so postive we will get another WF call tomorrow, the type of calls that they don't know what's going on. Oh, we are on trial mod. Duh!

[B Stevens]

I am going to wait for the actual docs. Rent for 4-5 bedroom houses in this area are about $2300 - $2500 a month. I have an 8 bd / 4 ba 4700sq house.

I was looking for a more permanent modification. $1K a month is substantially lower though and very enticing. Even though it is only for 5 years. The principle of Wells paying for their predatory loan practices make me want to fight the fight to prove I am right.

Common sense is telling me to take my $60K savings and see if the situation is better in 5 years. If not, walk away then.

This is tough. In a way, I have won by getting lower payments for 5 years. In a way, I have failed to get a permanent solution and will have to deal with this dilemma again. If it was a $200 a month savings I would have walked. If it was a $2000 a month savings, I would have jumped at it. $1000 a month? I dunno.

[breenfour]

B Stevens - Is this about being right or is it about doing what's best for you and your family, right now? The terms of your mod offer, saving $1,000 a month...and you hesitate? Are you saying you are weighing the benefits of your mod offer terms to the the idea of winning a legal battle, you think you would come out of that ahead, unscathed?

[caldwellb02]

B - I agree with Breen. Although you have to make your own decisions, this five year breather could be just what you need to increase your savings, pay off any credit cards you might have, and give your family a little breather. But don't do anything till you have it in hand and get to read the fine print.

[breenfour]

B Stevens - I forgot to say in my earlier post, I feel for you as I was sinking myself but did accept a mod offer and no matter what, I can say without question that not having to wait for phone calls that never come, not having to get pissed off every day because of the millionth widget worker conversation I ust had with the lender. I feel freeer than ever by just releasing myself from that incredibly negative cycle. I don't care any more who was right, who screwed me or who I thought was screwing me, putting way to much energy in to conspiracy theory paranoid thoughts. It's done and I'm way better off, no matter who is right, I don't care because I can at least now afford to eat, clothe my kids and know when I get home a big fat sign won't be posted on my front door.

[B Stevens]

Yeah, I know. I paid off all of my bills and cars over a year ago planning for this work slowdown in an effort not to have a hardship but a work related injury came into play in March.

breenfour - I am a firm believer the buyers, all buyers (even those who bought 2 or more houses), were victims of greedy banks making skeptical loans. They wrote the policies so investors lose and buyers lose but the bank keeps the property to sell again for more profit. Someone has to fight and bring this fraud into the public eye in a way the average person can understand they were taken advantage of.

By accepting the reduction in the interest rate, I feel I am helping the banks cover up their fraud. Obviously I need to get over it. But then I see how many people on this board are struggling and have been victims and I want to help. This board is only a fraction of the people who need help and are willing to fight for what is right.

It is too easy to say, "I made something happen for me. You guys are on your own." It is just selfish. The people who walk away are the ones losing.

I will most likely sign the paper work. My family would really appreciate some extra money to go to a restaurant or have decent food to BBQ.

[B Stevens]

So I went to the NACA convention in Los Angeles today. Got there at 5:30AM and was about #2500 in line. By 8:00AM, the line was 3 times as long. I filled out my paper work. I was told by NACA my electric bill and food bill was too high. (they must not understand the electricity rates in SoCal). They decided to adjust my numbers a bit to get them borderline guideline and told me my numbers qualify me for a reduction in principle and interest. So I am sent off to the Wells Fargo team. Ryan has the notes on my file there on his computer. He sees the history from Feb 09 to 9-24-09. He sees the 3% for 60 months offer and looks at the "investor guidelines".

He proceeds to tell me how my investor doesn't go below 4% and that the Exec team worked around the guidelines to lower my rate by not changing my loan. They still would not tell me who the investor was. He jumbled the numbers around but couldn't come up with a payment reduction within the guidelines. So at 3:30PM, I was told the offer of 3% for 60 months was the best scenario to lower my payment eventhough it was temporary.

Kind of a waste of time for me but there were some people getting some real help there. Priciple reductions, 2% interest rates, debt forgiveness, etc.

Ryan explained the types of loans that were being modified by Wells Fargo. If you have a high interest rate (7-9%), they lower them to 4%-5% on the spot. To have an interest rate that high, you were high risk in the first place and they want to retain you. If you have a low interest rate (subprime), they really can't do anything for you because they do not lower principle. They may do a forebearance but the owed money is not forgiven.

I asked why my trust deed showed Wells Fargo N.A. as the beneficiary when they obviously are not. I was then explained the whole process of how my loan gets to a pool investment.

1. Once I sign the docs, the house is paid off by an investment group with a line of credit.
2. They sell the loan on the "risk value" and group them together as real estate fund investments worth "billions of dollars" to keep the risk of default a low percentage.
3. The investment groups then have investors buy into the fund and the interest paid is the return on the fund.

I was told my note was likely bought and sold several times to different funds. I then asked who initiates the foreclosure process if I go into default? He said Wells Fargo does as the servicer. I told him the beneficiary is the only one who could initiate a legal foreclosure and if my note was sold to an investor, Wells Fargo could not legally foreclose. He then told me he did not believe that was true because they have a lot of foreclosed properties.

I pretty much left it at that and thanked him for trying different solutions for me. If I do not have to sign a new trust deed, I will accept the lower interest rate. After saving some money with the lower payments, I will most likely take the foreclosure delay road as long as possible.