Indymac Modification

[jettagurl]

Hi There,

I just got turned down for a modification even though I was at 32%.

- Purchased condo: $470K in July 2006

- Two loans: $404K ARM and $58K HELOC ARM
- Monthly mortgage: $1,986 interest only (primary), and $200 interest only (second) adjustable based on current interest rate (this is a HELOC). This means that if interest rate rises I could be paying as high as $900/month on this second loan.

- Gross unadjusted monthly income: $8,480 (this is an average based on annual salary/12. I actually get pay bi-weekly so gross monthly is really $7,800)

- Home value: $400K (est.)
- HOA per month: $295
- Tax per month: $425
- Freddie Mac owns my first loan

Here's the deal:

** Indymac does not offer the HARP until October and only for Fannie Mae loans. Freddie Mac is pending.

** If I can refinance under the HARP, my payment would increase and the 32% DTI would be even higher


Here are my questions:

1. Do they look at my expenses when doing the calculation for either the HARP or the HAMP programs? I have to pay about $800 in student loans (huge chunk) each month plus car payment $462, and other expenses.

2. Why couldn't they modify my loans so that I can have a 30 year fix that meet the 31% ratio so that I can get out of ARM loans?

3. Since they currently don't offer the HARP and even when they do, refinancing would increase my monthly payment by $500 which would bring my DTI to 39% so does it make sense to refinance if I can't afford the payment and ultimate might result in foreclosure? And this is only for my first loan.

4. Is it true that they cannot do anything with my HELOC (second loan) regardless of whether I refinance under the HARP or modify my loan under the HAMP program? This loan is the scary one. When the ARM fully amortize, my monthly could increase from $200 to $900 on top of my first loan. This means that my total montly mortgage payment for both loans would = $3,700 and that does not include tax and HOA.


To be honest, I shouldn't have been qualified for the loan in the first place given my expenses at the time (e.g. my student and car loans). However, my mortgage broker convinced me that taking out an ARM loan and breaking it into two loans would not only lower my payment but also do away with mortgage insurance. He said later I can refinance assuming that the market would build equity on my condo. I signed the loan papers because I wanted the condo so badly not ignoring the fact that it's beyond my budget. Yes, I was a victim of predatory lending but I know I'm also was responsible for my finances. I guess they just made it sound so easy and everyone and their mother is doing it. And that I'd be stupid not to invest in a place that would increase in value...right. My bad.

Now I am stuck with an ARM loan that will be fully amortized in 2 years which will result in about $800 increase in monthly payment. And that's just for the first loan.

Is there hope for me? What can I do in this situation without having to sell my place?

Please help.

Thanks,
J


Oh...also, I feel like I need to do something now. The problem with government funding is that it runs out very quickly regardless of when the program sunset.

[tammi]

I also have a loan with indymac/onewest bank, we stopped paying our loan due to the economy in dec '08, I tried the modification in Jan '09, they sent us a package to modify the loan by lowering the payments by $500.00, I told them it wasnt enough i needed at least $1500.00. so they sent us a decline in march. I then went to Acorn Housing, they drew up a proposal for indymac that, which by the way started in March and just this week Sept 29, 09, indymac finally called Acorn and told them they would not look at there proposal because they declined us in march.

I have done ALOT of research on indymac/onewest bank, and the same thing is happening to alot of people, indymac is giving everyone the run around. We were advised that indymac wants to forclose on there loans then resale the home, they get to write off the dept (tax benifit) they got money from Obama, and they get money on a new and good loan.

We were advised to get a lawyer if we want to keep our home. I have a phone call into a lawyer hopefully we will have a appointment next week, we are also going through someone totally different for another bail out.

dont give up keep fighting.

[jettagurl]

I'm sorry to hear about your situation. I hope you get some resolution soon.

In my situation, I was honestly a victim of predetorial lending but I also know that I should have known better than to take out a loan that I can't afford. Of course the lender made too easy back then so now I am stuck with a loan that when compound with low home value is hard to get out of.

Indymac suggested that I refinance but ironically, they don't offer the HARP program and I can't go elsewhere according to Freddi Mac guidelines. Even if I were to able to refi, the problem is my current ratio is 32% and that's for interest only loan. Refinancing would put me in a 40% ratio so it doesn't make sense to refi. But because currently I am not in danger of payment shock, Indymac won't do anything to help. What they fail to see is that I'm struggling each month because I have very little disposable income. They only look at 31% PITI and dont care about other expenses like student loans, etc. When I took out the loan oringinally, I shouldn't have been qualified for the loan just because my student loans is hugh. *sigh*
I also hate that my second loan is a HELOC and I cannot refinance that under the HARP so when it's fully amortized, my second loan would increase by $500 or more. My mortgage broker svcks! He talked me into splitting the loan so that I can avoid mortgage insurance. Had I kept it in one loan, it would have been easier to get a modification since they only look at your first loan!

What really bugs me is that some people do play the system and try to get help by making their crisis worse (e.g. skipping payments, etc.). And the banks actually support this because unless you're about to foreclose or in dire needs, you out of luck so it has an adverse affect.

[tammi]

I talked to an attorney Thursday, he talked to me for about 1/2hr. a friend referred him so he was very open and honest.

He said Never Never pay for modification, sometime this month it will be illegal for people to charge, and he also said to submit the modification myself with a letter spelling out what I want.

because we owe $720K and our home is worth $450K the lawyer said to walk away from the house, he says that if the banks foreclosed on all the homes they should the market would crash. that is why they are allowing people to stay in there homes for so long. He said bank our money and stay in the house for as long as we can. so I am going to try to do the modification. and if we get a notice to vacate i will call the lawyer and he said he can by us more time.

He also said even though the banks got money for modifications from the government they do NOT have to use it for that. and that only 3% are actually getting modifications.

So:
1. do modification yourself
2. do NOT hire anyone
3. if you owe more then your house is worth (like me) do a short sell -
this way no foreclosure on your record.