GMAC - Good News & Bad News

[Liza09]

The good news? Received loan mod papers today. The Bad News? They RAISED my interest rate 2.13% to a rate of 6%. They are offering me a fixed loan at 6% for the remainder of my term (444 months). They are "capitalizing" about $8,400, "forgiving" about $13,400, and want me to pay $3,550 as a "down-payment". My first payment will be December 1st. PITI will now be $3,539.

I'm not sure why the rate hike. I'm guessing it's because when I took out the original loan, it was an "owner-occupied" loan. Now the house is a rental. We have just gone through a Chapter 7 BK (due to a Business loss and still waiting for our discharge) and told GMAC we were going to have to surrender our primary residence and move into this rental. Interesting note...they want us to sign the mod BEFORE our discharge but they state they cannot finalize the mod until AFTER the discharge. I don't think the BK Trustee will allow us to enter into a mod agreement prior to discharge anyway.

Here is my question...what do you think my chances are I can work with them on lowering the rate? Or, have you heard of a lender giving a "forebearance" by putting the late payments and escrow balance at the end of the loan and let us continue making our current payments. If so, I would just keep the loan I have for now (Option Arm with a 3.875 interest rate) and, after we move in to the rental, we can resubmit for a primary residence mod. Any other ideas?

Thanks for you help!

[B Stevens]

Sounds like a jumbo loan for 40 years at 6%? On one hand they are getting you out of the adjustable but on the other hand, they are not giving you something that is affordable.

I would ask if they could give you a lower interest rate for a set period of time. Maybe 4% for the first 3 years until you get on your feet? They are definately not losing any money so do not feel bad asking for a better break.

[Liza09]

Thanks for the response. I'm going to call my negotiator in the morning and do just that. The way I see it, after the discharge, I won't be personally liable for the debt. I sure don't want to re-affirm on a 6% loan which I know we can no longer afford. We are slightly upside-down on the house. If GMAC forecloses, they will suffer a loss. We are 4 full months behind and a balance due for the two months they had us on a trial payment (when we filed for our BK, they pulled the trial agreement). I'm thinking it may be better to get caught up within 2 payments and ride along for a while at 3.875% interest. At least until things settle in our life and we know where we stand. I'm hoping GMAC won't foreclose on us if we are only 2 months behind.

So much going on right now. Losing the business, filing BK, our home plus 4 rentals are all past due (and all upside-down) with mod requests out on all of them. GMAC was the first to respond (B of A is so confused, we may not hear from them for years - Ha!) and we just sent 2 packages off to Aurora) We have pretty much resigned ourselves we are only going to be able to save one property, which we will live in. I feel like we're playing eeny, meeny, miney, moe...which loan mod will be a "go". LOL!

Updates to follow...