Interest only loans. Need help!

[Aspie Mom]

2 interest only loans. Floating APR. Michigan (recourse state)

80/20 put $0 down

149,000 with Citimortgage
37,000 with Bof A

House value $110,000
Monthly Gross $4500
Payment (with taxes and insurance) $1100 (total includes both loans)
Current on both loans

Want a 30 year fixed loan. Can't get help because I can afford the payment now. I won't be able to afford it once the principle kicks in in 3 years. The house needs a TON of work and I am hesitant to spend money if I won't be able to afford it in the end.

Do I stop paying, save the cash and start over or stick it out and hope that at some point I qualify for help?

[Evan Bedard]

Want a 30 year fixed loan. Can't get help because I can afford the payment now. I won't be able to afford it once the principle kicks in in 3 years. The house needs a TON of work and I am hesitant to spend money if I won't be able to afford it in the end.

Do I stop paying, save the cash and start over or stick it out and hope that at some point I qualify for help

I would recommend looking into the Home Affordable Refinance Program (HARP) to see if you may qualify because it is the only program specialized for underwater mortgages. However, your mortgage must be owned by Fannie Mae or Freddie Mac to qualify for HARP. Below you will find a little more information about HARP and links that will allow you to determine whether either Fannie or Freddie owns your loan.

You may be eligible for HARP if you meet all of the following criteria:

• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
• The current loan-to-value (LTV) ratio must be greater than 80%.
• The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for HARP.

Ask your mortgage servicer (the company to which you make your mortgage payments) if they participate in HARP. Not all mortgage servicers do. Contact Fannie Mae or Freddie Mac for help in determining if you may be eligible for HARP.

[Aspie Mom]

Thank you for your quick response.

Unfortunately my mortgage is not held by Fannie or Freddie so HARP is not an option.

I don't qualify for HAMP either because my payment (with interest only) is not 31% of my gross.

I'm not asking for them to reduce my principle even though I'm 70k underwater, just want a mortgage payment that is constant and that I can afford for the duration of the loan. Citi is unwilling to work with me.

I have applied 5+ times over the past years in anticipation of the loan adjusting.

[Cat Damiano]

Hi Aspie Mom,


You may want to try one more time for the HAMP as the eligibility guidelines have added a HAMP Tier 2 qualification as of June 1, 2012;

The borrower is evaluated for HAMP Tier 1 following the Effective Date but fails to
satisfy the eligibility requirements for a HAMP Tier 1 modification (e.g., the loan is not
secured by an owner-occupied property or the borrower’s pre-modification monthly
mortgage payment is below the minimum 31 percent front end debt-to-income (DTI)
ratio) or underwriting requirements for a HAMP Tier 1 modification (e.g., the servicer
cannot achieve the target monthly mortgage payment ratio without excessive forbearance
or the result of the NPV test is negative).

[Aspie Mom]

Thanks Cat.......I asked Citi about that option as well and they said that I don't qualify. I asked them what I need to do to qualify and I will do it. Dead air......no response.

I firmly believe that they would prefer to have a house in metro Detroit on a block that's littered with foreclosures than to allow me to pay my full loan back just structured in a different way.

I hate to ruin my credit and stop paying but I also refuse to pay $20k for a new roof and plumbing to keep myself and my kids in a safe home that we will have to one day leave anyhow.

[Cat Damiano]

Are you dealing with regular reps or the executive team on this new Tier which was just announced three weeks ago. With Citi, in the past, the regular reps have been pretty clueless whenever a new announcement or addition to the programs are made.

CitiMortgage Executive Response Team
(1-636-261-7200)

[Aspie Mom]

Thanks for the phone number Cat. I am going to call the executive team for sure!

[Evan Bedard]

Here are a coupe more good contacts for Citi, both reps are also members here in the forum and have been very quick to respond to borrower's requests..

Michael Cardace
michael.cardace@citi.com

Frank Eliason
frank.eliason@citi.com

[Cat Damiano]

Hi Evan,

The number I posted was given to me by Michael Cardace and is directly to their office.

[Aspie Mom]

I just called the number and was told to send a fax with my request for a modification.

I have never had any luck with the 'fax' route before but it's worth a shot.

Thanks for such great and quick info!

[Cat Damiano]

Hopefully this avenue will be able to help you. Good Luck and keep us posted!

[Aspie Mom]

Hopefully this avenue will be able to help you. Good Luck and keep us posted!

Thank you for that phone number. These boards have provided so much information and hope!

[Aspie Mom]

I have 2 interest only loans both with ARMS set to adjust in January.

Besides not being able to afford the principle when it kicks in how am I going to plan for the future with a loan that adjusts every 6 months?

I can't refi since I'm 70k underwater. It will take over a decade for me to break even.....if even then.

I'm worried about waiting for the other shoe to drop so to speak.

Sounds like most of the programs to help homeowners are set to expire this year as well.
It's a waiting game that I don't like playing.

Anyone else have similar concerns?

[Evan Bedard]

Sounds like most of the programs to help homeowners are set to expire this year as well.
It's a waiting game that I don't like playing.

Anyone else have similar concerns?

I'm sure many people have similar concerns, but loan modifications will definitely be around far after January 2013 as HAMP alone is not due to expire until 12/31/13. Do you happen to know if your mortgage is owned by Fannie Mae or Freddie Mac? If so, even though you are underwater you may be able to qualify for a refinance under the HARP program. Below are the basic eligibility requirements for the program.

You may be eligible for HARP if you meet all of the following criteria:

• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
• The current loan-to-value (LTV) ratio must be greater than 80%.
• The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for HARP.


Ask your mortgage servicer (the company to which you make your mortgage payments) if they participate in HARP. Not all mortgage servicers do. Contact Fannie Mae or Freddie Mac for help in determining if you may be eligible for HARP.
Program ends December 31, 2013.