Wells Fargo Loan Modification Received What do you think? HELP!!!

[cahomeowner]

First a little background.

500K 1st loan 4.875% through wells
150k 2nd loan prime through wells

home value $500K

I completed my 4 month trial or forebearance plan back in mar 09. I was told I needed to complete the trial payment plan first then I would be considered for a loan modification.

Once the plan was completed, I have been on the phones with Well Fargo ever since on a regular basis trying to get a loan modification. I am 10 months behind and I have people knocking on my door because they heard about the notice of default. I have a sale date schedule for nov 2009.

I have been working with the wells fargo executive team and just received my loan modification papers. 25 year loan on 1st mortgage at $3100 at 4.875%. I submitted my financials and was showing a $500 surplus. This new loan modification would bring me current and put me on a PITI plan but my payment would increase eating up any surplus I would have each month. Isn't the purpose of a loan modification (at least from the homeowners point of view) is to reduce your payment and perhaps lock the interest rate?

I am not sure why they did not give me a 30 or 40 year loan which would have lowered my payment? How am I suppose to accept a loan modificatin that is going to raise my payment $500 each month?

I just started working with NACA and hoping I might be able to get 2% fixed for the life of the loan type restructure like others who have reported their success with NACA.

I sent the loan modification paperwork back unsigned with an explanation of why. just wondering if anyone has any similar experiences? the executive team said this was my last option but I am wondering if I push back would I get a better deal? should I hold out and hope NACA can deliver results? NACA submitted my proposal which was way better and they were proposing to combine all loans into one. I am also planning on attending the save a dream tour to see if I can talk to my lender and get a restructure same day.

please help I welcome you advice and would like to hear your experiences. please provide as much detail as possible.

[MyHAMP]

Originally Posted by cahomeowner

I just started working with NACA and hoping I might be able to get 2% fixed for the life of the loan type restructure like others who have reported their success with NACA.

Where can you get such a loan? 2% fixed for the life of the loan? Even HAMP is only at 2% for the initial 5 years - at best..

[Liz Medrano]

I haven't heard of anyone getting 2% for the life of the loan. Most are getting it for five years and then it steps up 1% each year until year eight.

[MyHAMP]

Originally Posted by Liz Medrano

I haven't heard of anyone getting 2% for the life of the loan. Most are getting it for five years and then it steps up 1% each year until year eight.

Although....IF you get a huge principal forbearance under HAMP and keep your loan for the entire 40 years - then you might actually reach the 2% on the entire principal balance since the forbearance-part is interest-free..

But it don't think that's what the OP meant..

[Liz Medrano]

Gotcha ----that makes sense!!! I never thought of it like that. :-)

[MyHAMP]

Originally Posted by Liz Medrano

Gotcha ----that makes sense!!! I never thought of it like that. :-)

Hahaha..me neither - before I read that thread...

[cahomeowner]

check the NACA website. checkout the videos and news reports where people are leaving with restructured loans at 2% for the life of the loan. I know I am skeptical too but then I started reading reports on this forum of other folks who are saying they got 2% for the life of the loan through NACA.

seems like NACA might be for real? I have another thread about NACA and you go do a search on the forums.

[B Stevens]

I was current with my I/O loan and they lowered the interest rate to 3% for the next five years but left me on the interest only loan. WF is not a lot of help.

Did you save the 10 months of no payments? If so, you should have about 35K saved up and you may be able to have a family member use it for a down payment on another house. Have them put your name on the house after it closes escrow and your credit will be pretty good but not perfect.

You may also still be able to get a lawyer to delay the foreclosure process.

[cahomeowner]

Originally Posted by B Stevens

I was current with my I/O loan and they lowered the interest rate to 3% for the next five years but left me on the interest only loan. WF is not a lot of help.

Did you save the 10 months of no payments? If so, you should have about 35K saved up and you may be able to have a family member use it for a down payment on another house. Have them put your name on the house after it closes escrow and your credit will be pretty good but not perfect.

You may also still be able to get a lawyer to delay the foreclosure process.

you must have some very generous relatives who are willing to purchase a home and then put you on the deed. this would not work for me. I would not want to impose on my relatives. appreciate your response

[B Stevens]

It is not about having generous relatives. It is about family understanding your situation and helping you out with YOUR money. You are still going to make the payment. It is your money being used for the down payment. They are only letting you use their credit to get into a house you can afford and letting you take advantage of the low home prices now.
Once your credit is satisfactory again, you can buy the house and have it off of their credit.

Of course if you haven't learned anything from your banks misdeeds, then you might get into the same situation you are in now again.

You cannot win the bank's game playing by the bank's rules. But you can win by making the bank play by their own rules.

I am not trying to sound snotty or demeaning. I sincerely believe the banks set a lot of people up for failure. They win whether you or your investor lose and they know that.

[flagirl4444]

Originally Posted by B Stevens

I was current with my I/O loan and they lowered the interest rate to 3% for the next five years but left me on the interest only loan. WF is not a lot of help.

Did you save the 10 months of no payments? If so, you should have about 35K saved up and you may be able to have a family member use it for a down payment on another house. Have them put your name on the house after it closes escrow and your credit will be pretty good but not perfect.

You may also still be able to get a lawyer to delay the foreclosure process.

Your name can't be added to the loan, so how do you figure the credit will be good?

[B Stevens]

Originally Posted by flagirl4444

Your name can't be added to the loan, so how do you figure the credit will be good?

You are not having it added to the loan. You are having it added to the trust deed. Just like you would if you got married after you bought a house and added your spouse to the house. If you have a tangible item in your name, you have credit.

[cahomeowner]

Originally Posted by B Stevens

It is not about having generous relatives. It is about family understanding your situation and helping you out with YOUR money. You are still going to make the payment. It is your money being used for the down payment. They are only letting you use their credit to get into a house you can afford and letting you take advantage of the low home prices now.
Once your credit is satisfactory again, you can buy the house and have it off of their credit.

Of course if you haven't learned anything from your banks misdeeds, then you might get into the same situation you are in now again.

You cannot win the bank's game playing by the bank's rules. But you can win by making the bank play by their own rules.

I am not trying to sound snotty or demeaning. I sincerely believe the banks set a lot of people up for failure. They win whether you or your investor lose and they know that.

a relative understanding and appreciating your situation is one thing but for a relative to go buy and house on the hopes of you someday refinancing and buying the home yourself is too much of an imposition if you ask me.

it's like having a relative co-sign for you on a car. what happens IF you default then what happens to your relationship with said relative? not saying it would happen but what if it did? I can appreciate your thought on this but I don't have relatives I can impose on nor would I want them imposing on me if the situation was reversed.

also if by chance you were able to refinance and buy the home from the relative, what kind of tax implications would they incur? what if the property appreciates, will there be any arguments about splitting the equity? it's a slippery slope but I can see where your going with this.

I have heard of people buying a 2nd home and just letting the 1st go. this occurs when the 1st is significantly underwater and people figured out a way to get a similar or larger home at the current market value.

[flagirl4444]

Originally Posted by B Stevens

If you have a tangible item in your name, you have credit.

No you don't. The credit report and FICO score do not include assets. Nowhere on the credit report will indicate that your name is on the deed to a house if your name isn't on the mortgage loan. Besides, an asset is only really worth the property's value minus the loan that encumbers it.

The foreclosure on the credit report will be extremely damaging. You won't qualify for a new mortgage until a minimum of 3 years after the foreclosure is complete. I suppose if interest rates skyrocket by then or values continue to fall you'll have a tough time refinancing into your own name with payments you can afford. To quote you, "Of course if you haven't learned anything from your banks misdeeds, then you might get into the same situation you are in now again."

[alice920]

I too, have gotten the bad end of the stick. Wells/Freddie approved a mod for me and it only reduced my payment 100.00 and left me with a residual income of 50.00. I asked about it and they informed me that Freddie has a model they follow when they plug all of your info in and that was the best they could do "at this point" and I dont qualify for a refi because I have had 9 months of rolling 30 day lates becuase I was duped into believing they wouldnt modify my loan if I was current. I am bringing my account current because the mod they offered was garbage. An 8th of a point, 10 years on my term and adding 3k to the back end when I am ONE payment late seems like they dont care about my situation. Unfortunatly I cannot walk away, I would on principle alone, but I have a family and I need my house. The only hope I have is getting a raise, working a million hours or waiting 12 months and hoping that this refi program is still around and that my house values fall within range of their poopy guidelines. This situation isnt going to correct itself for at least 7-10 years so hold on to what you have and really think about what you want to do.