hardship letter

[rcn68]

hi folks,
it's amazing what you can find on the net when you look! finding this site just a few days ago has already been a huge resource. thanks!

i have a written a rough draft of a hardship letter and i am looking for some feedback. this is for an investment property--3 family.

thanks in advance for your time! rcn68


Respectfully, this is not a threat, but a promise. If my current loan which is a 7.75% interest only product, is not modified and quickly, I will no longer be able to maintain and keep up the flawless payment history that you’ve come accustomed to. If you feel a modification is not warranted in this situation, then please, by all means, prepare to own another abandoned property, as it would not be financially, physically or emotionally worth maintaining the stagnant motion of spinning my wheels to keep this property. We are in the middle of one of the worst real estate corrections in recent history, unemployment is above 10%, bankruptcies and foreclosures are reaching historical records monthly and the value and equity of property is almost non-existent if you bought within the last 5 years. Why am I telling you what you already know? Well, these are a few of the many reasons that are pushing me closer and closer to not being able to keep these properties. The value of my property is almost 100 thousand dollars less than what I paid for it, only 5 short years ago. That coupled with an interest only loan that is not bringing down the principal, leaving zero equity to try and refinance the traditional way. The rents have been lowered to keep tenants and new tenants are paying substantially less due to the amount of rental inventory in the local market. And now comes the other foot dropping, my company has just filed for bankruptcy and I face the possibility of being part of the over 10% unemployed. Once that happens, there will be no additional funds available to cover the current monthly loss. As you can see in your records, I have not missed a payment nor have any 30 day late payments. That is because I have been diligently striving to make the payments as to not damage my credit worthiness. However, as I have just explained, the commitment to maintain a flawless business relationship with Aurora Mortgage is becoming very close to being compromised. This letter is sent in good faith to PROACTIVELY prevent what will be a bad situation. I am seeking your help to remove the 7.75 interest only loan to a principal and interest product, allowing for the continuation of this relationship.

[caldwellb02]

rcn - well written letter that may just fall on deaf ears. I have not heard of a mod on an investment property, and not heard of a mod when people are not delinquent yet (though I have been told that has happened).

Many of us have had "flawless payment histories" and very good credit ratings. Many of us here have lost jobs or income. Pretty much everyone is underwater. And budging the banks is a nightmare no matter how good a client you were or once were.

I tried to get a mod in Jan of this year, seven months before I fell delinquent. It was only three months into delinquency that I was approved for a trial, and this is on the home I live in and not on an investment property.

Will changing the 7.75% to a P&I actually reduce the monthly payments? If not, I just don't see why they would grant the mod. Your argument about gaining equity so you can refi is a thin one because even if you got the P&I loan, it will be YEARS before you have the equity to refinance.

So send the letter, and then be ready to make good on your promise to default, because unfortunately I do believe that is what will happen. Make sure you let your tenants know, so that they can make plans.

Sorry to be the bearer of bad tidings. I could be wrong (It has DEFINITELY been known to happen!)

[rcn68]

thank you for your input...yes, if i can get a 5% P&I loan, it will reduce the payment considerably. a relative who has a six unit building just achieved what i am trying to do. i'm hoping to her from her soon to get some guidance as to how she did it. i always have the attitude, if you don't atleast try, you've already failed!

[Traycey]

Alright to all of you IndyMac/Deutsche fans......here is a response I received from John Gallager from media at Deutsche:

The "agreements" are the pooling and servicing agreements which create the mortgage securities trusts. They appoint the loan servicer (and not the trustee) to interface with borrowers. They typically also give the loan servicer the right to make the judgment call as to whether particular loans can be modified, subject to certain restrictions.

Although some agreements are more restrictive than others, the general standard that servicers apply is whether the mortgage securities investors (not the servicer or the trustee) will obtain greater economic value from modified payments on a distressed loan than they would from a foreclosure. That determination is complicated, and the servicers use various formulas and criteria to make decisions about particular loans. With respect to IndyMac (now One West Bank), the formulas used to make modification decisions were largely dictated by the FDIC when they took over IndyMac. Of course, it is for each borrower to decide whether the modification, if any, that is offered by the loan servicer would benefit them in their personal circumstances.

If you have further questions about the loan modification decision with respect to your loan, we must refer you back to One West, as servicer.

Regards
John

John T. Gallagher
Deutsche Bank Media Relations
212.250.4516 (W)
917.331.1580 (M)
john-t.gallagher@db.com


Just thought I would share this in case it rings a bell or comes in handy.

[caldwellb02]

It may come in handy, particularly since I'm pretty positive I have a predatory loan (not originated by Chase/Deutsche, but they have it now).That along with NACA and me pushing are all, I think, are factors in my getting a trial after almost 11 months of pushing. We'll see how this progresses. Thanks for contacting him, Traycey.