Unique Litton Mod - My experience, your advice

[JacobHewell]

Long time reader, first time poster here. This site has been an amazing resource, and I hope I can contribute to the cause.

I know this post will be huge - I'll try to be brief. The summary at the bottom will include what I'm trying to figure out. Thanks in advance for any advice!

About Me:
I spent years in the mortgage industry, including working in the secondary market, where I examined thousands of loans on behalf of potential investors. Ironically, I was taken advantage of by a last-minute denial of my mortgage when I purchased my home; I was left with 5 days to secure a new mortgage, which is a high-rate 80/20. I purchased the home in June 2006.

My Situation:
- Modification began in May 2009, attempting to modify the two mortgages on my primary residence
- I am NOT seeking a HAMP (Government Funded) modification; or, as the reps at Litton have called it, the "Obama Mod"
- Refinancing is not an option, and will not be an option for a while
- 1st mort: Litton Loan, 120k balance, $815/monthly, 5/25 ARM, 7.9%
- 2nd mort: Homeq, 29k balance, $256/monthly, 15 yr balloon
- I chose to pay a third-party mitigation company who specialized in mortgage mods, called BIRMCO. I did this because I was under the impression that they would handle all the paperwork and follow-ups on my behalf, and they assured me that they were experts. I'm not impressed with their services - and I have ended up doing most of the work myself, anyways. I paid $1,500 for their service, with a 75% money-back guarantee if they fail to get a modification for me.
- My main priority is Litton, the first mortgage holder. From what I hear, the second lien holder (Homeq) probably will not modify a mortgage until the first is completed. Also, Litton has been MUCH more difficult to work with, and has been a problem for months.

Working with Litton:
- I sent all required docs in May 2009. Since then, they've claimed to be missing docs on two occasions. I sent them immediately, and confirmed their receipt.
- The only communication I have received from Litton in this process has been a generic Denial letter, stating that the home payment should be affordable based on my income and payments
- Upon my first denial, I contacted Litton to investigate. Even after receiving my income, mortgage, taxes and insurance information, their records were grossly inaccurate.
- Litton's first mod denial was based on incorrect figures: They showed my gross income to be $1,000 more monthly than what I make, and they did not include any of my taxes or insurance payments toward the calculation. These are now accurate in their system.
- My PITI (Principal, Interest, Taxes and Insurance) for both mortgages is 35% of my gross; this may not seem dire, but it is for my situation. From what I've read, this should be well above the 31% that lenders use to qualify borrowers for modifications.
- I have contacted Litton customer service reps many, many times in recent months, trying to determine exactly why I've been denied. One said that it was because my first mortgage payment ALONE needed to be over 31% of my gross (what?!), another said that my first and second together needed to be over 31%, another said that my first mortgage, plus taxes and insurance only needed to be above 31% (but only if I'm escrowed with Litton), and on and on.

Summary of Working With Litton:
- No one at Litton can give me a straight answer on what my DTI needs to be in order to qualify. I know that the 'industry standard' is 31% DTI, and that DTI is normally calculated by including the first and second mortgage payments, plus taxes and insurance.
- The majority of Litton customer service reps are not knowledgeable about the Mod process, and won't let me speak to anyone who is.
- Litton's records of my income and expenses were incorrect, even after sending them paystubs and all other documentation (be cautious!)

My Back Taxes Paid by Litton:
Litton recently paid my past-due property taxes. The oldest were 2 years overdue, and being able to start paying on them was part of my motivation for modifying. Litton paid them in full a couple months ago, to the tune of about $9,000. Litton still has not sent me a statement increasing my monthly payments to repay these taxes. I know that I'll be required to pay this back in installments, and I've been told that this will be an additional $400/month, on top of paying $300/month for the current property taxes. When this happens, my DTI will go through the roof, and I'm hoping that Litton takes this amount into consideration when qualifying me for a Mod - but that is assuming, of course, that they take tax payments into account for their calculations.

Summary - What I'm trying to find out:
- How does Litton 'qualify' a borrower for a Mod? Is it a 31% DTI (debt-to-income) ratio as I've been told?
- Does Litton include both mortgage payments, taxes and insurance when calculating my DTI?
- When Litton starts requiring me to pay installments on the past-due taxes they paid off, will they consider this when calculating my DTI? This will put my DTI at 45%, which I simply can't handle.
- What else can I be doing? Any advice or help is GREATLY appreciated

Thanks in advance to anyone who can help me answer any of these questions. I've read through the forums but haven't found these exact situations - but I'm inspired by those who've had success. I hope that I can contribute in the future to this awesome resource.

[christy4]

First of all, quit dealing with the customer service reps at Litton. The only thing they are trained to do is deny everything and hound the borrower for money.

Second, send an email to the man himself----Larry Litton. I don't have his email address handy right now, but you can search on this site for it. He definitely won't call you back, but you will probably hear from someone else.

Call the Executive Resolution Team and explain what you want.
800-247-9727 ext 7770 or 713-218-4592

Most of all, be prepared to fight for your modification and don't give up!!!

[JacobHewell]

Thanks for the advice Christy!

I called the Litton Executive Resolution Team number. The agent, Lorn, seemed pretty sure that Litton calculates DTI based on the 1st Mortgage ONLY, plus taxes, insurance, and any HOA dues. At least I finally got my answer - they're not including my second mortgage in my DTI, which keeps it from being over 31%.

When Litton starts requiring me to pay back the past-due taxes that they paid for, my payment should go up by about $400/month, which should be enough to put me over the 31% DTI mark, and qualify me for a mod. I'll keep my fingers crossed until then.

Also - I did some more research on my third-party modification company, BIRMCO, and discovered that they are in all sorts of trouble with the Better Business Bureau and now with the Government. They have a money-back guarantee for 75% of my $1,500, so I've started that process.

Thanks again for the great resource of this site! I'll be sure to update with any new information I come across.

[aprilware2]

jacobhewll if u can u should try n do n modification by yourself cause i did everything my self tha hardship letter also sent n everything they asked me to and wrote down everyone name dates n times of when i called litton everyday n everyweek n made all tha trial payments on time

[601galapago]

I have been in the LITTON system since JULY, with absolutely no reason to be denied, yet they will not complete the process.

dw

[litton nightmares]

OKAY. Applied for the modification back in July, they tell me I am probably eligible, also tell me mod would be for TWO PERCENT, for life of loan, IF finalized. FANTASTIC.

THEN, Litton enters into agreement with the government to do HAMP.

I THEN GET TOLD: You are going to get a HAMP instead, that is better for you. If you pay on time government will pay down your principal 1000.00 for FIVE years, each year that you pay your mortgage by the due date. The interest rate will change, they say, OK, fine, still all that money they are TACKING on to my principal, will get knocked down by those 1K incentive payments, because I will have enough to PAY IT ON TIME now.

GET THE FINAL MOD PACKAGE TODAY. Well the interest rate goes up JUST LIKE THE HAMP-- but NO HAMP-- it is their mod and no 1K incentives in it.

LITTON, can't EVER DO WHAT THEY SAY. Now I'm over a pickle barrel, I KNOW I QUALIFY FOR THE GOVERNMENT HAMP, and if they want to jack the interest rate I want the incentive payments and other protections, this does NOT afford to me.

So I ask if I can reapply specifically for a HAMP, yeah but if you do we would NEED the 3 GRAND you owe us in unpaid interest for the past three months.

REALLY? What crooks. Lie to me the whole time and then give themselves the benefits of a HAMP, but deny me any of the benefits I'd get with one. THEY TOLD ME 2% the LIFE OF THE LOAN, when it wasn't under HAMP.

[aprilware2]

Originally Posted by litton nightmares

OKAY. Applied for the modification back in July, they tell me I am probably eligible, also tell me mod would be for TWO PERCENT, for life of loan, IF finalized. FANTASTIC.

THEN, Litton enters into agreement with the government to do HAMP.

I THEN GET TOLD: You are going to get a HAMP instead, that is better for you. If you pay on time government will pay down your principal 1000.00 for FIVE years, each year that you pay your mortgage by the due date. The interest rate will change, they say, OK, fine, still all that money they are TACKING on to my principal, will get knocked down by those 1K incentive payments, because I will have enough to PAY IT ON TIME now.

GET THE FINAL MOD PACKAGE TODAY. Well the interest rate goes up JUST LIKE THE HAMP-- but NO HAMP-- it is their mod and no 1K incentives in it.

LITTON, can't EVER DO WHAT THEY SAY. Now I'm over a pickle barrel, I KNOW I QUALIFY FOR THE GOVERNMENT HAMP, and if they want to jack the interest rate I want the incentive payments and other protections, this does NOT afford to me.

So I ask if I can reapply specifically for a HAMP, yeah but if you do we would NEED the 3 GRAND you owe us in unpaid interest for the past three months.

REALLY? What crooks. Lie to me the whole time and then give themselves the benefits of a HAMP, but deny me any of the benefits I'd get with one. THEY TOLD ME 2% the LIFE OF THE LOAN, when it wasn't under HAMP.

Hey when do you pay your first payment. I just recieved my second final mod cause the first one was incorrect. So they sent me an new one with my FIRST PAYMENT DUE MARCH 2010.