Help Starting Neg with OWB & Provident funding

[greenmax]

Hi,
I have been following this board for some time regarding a loan mod for my parents. They qualify for the loan mod program and here are their details.

1. Bought a house with no down payment mortgage in 2006. House bought for $280,000. Current value is around $180,000.
2. First mortgage through Indymac (OWB). Monthly payment is $1,240. Second mortgage is through Provident funding with monthly payment of $440. Taxes are $295 per month and insurance is $50 per month.
3. Loan is owned by Fannie Mae. We are current with the payment and do not want to default and spoil our credit score.
4. Father is self employed and mother is a part-time school teacher. Their gross monthly income in 2007 was $3167. In 2008 this was $3,000 and in 2009 it is around $2300.


I talked to a person at 888-995-hope and they said that we are eligible for a loan mod. I would appreciate if the experts in the forum can answer the following questions

1. We will be applying for a loan mod with OWB. Do we have to do the same with Provident funding, or does OWB deal with them.
2. What is the latest trend in loan mods that OWB are doing. Are they doing any principal reductions ? Same question with the second mortgage.
3. Should we go with a HUD approved counsellor or so it on our own.
4. How is the NPV of the property calculated by the bank. I would like to know what criteria they use so that I am well prepared. We only get one shot at it so want to do it right.
5. I am afraid that our (1st mortgage Principal + Taxes + Insurance)/Gross Income is 70% and they might reject it outright as being too high. My father has some large upcoming payments related to his business that he will get in January. He has the option of getting them now by paying 2% extra. If we do this then their monthly income for 2009 becomes $2700. Which one is better to increase chances of success.

Thank you very much. I will keep posting my updates on this thread in the spirit of fellow trouble mortgage holders.

Thanks