Are my ducks in a row? FF 80/20

[unomundo]

Hi and thanks for a great resource! I was told yesterday that I was assigned a negotiator at Home Loan Services (First Franklin) and should hear from him/her within 45 days. Our ARM adjusts in January so timing will be tight. Below are my specifics and I have a couple of questions below them:

1. Got 80/20 loan(s) with FF in November 2006 (7.7% first with ARM and 10% fixed second). The 7.7 goes to 8.5% in January
2. I totally realize I am in a better position than most in that we came in slightly under market and now have some equity, but we're at 95% LTV and so there are NO products available to us for a re-fi
3. I was laid off at the end of 2007 and am likely to go full-time soon but at a much lower salary
4. We've missed no payments in the past 2 years but it's going to be impossible to keep up with the lower income

Questions:
1. What can I do as a back up while waiting for the negotiator to call me? If I do nothing and they refuse to assist, I'm out of luck

2. Will the negotiator "negotiate"? My current take-home is less because I hadn't taken enough taxes out during the year and so it makes it appear as if I'm not able to cover current expenses. I completed this worksheet with the hope that it would be used to start a dialogue where I could explain my current financial situation and what's to come, and not be a black and white balance sheet. For example, property taxes are a huge expense I had to report but I have money put aside just to pay them; this is not clear on the worksheet I filled out. Should I send a note explaining now or wait till I'm contacted?

3. With a 95% LTV, "excellent" credit score but lots of credit card debt (high debt to income ratio)- are there any products out there that might allow me to forego a modification and possibly re-fi? I've tried Bank of America, Wells Fargo, FHA and a new (recommended) broker but they've all turned me down.

We came to CA from back east and fell for the same "this is CA, a house IS your 401K, a house IS your investment; just stick it out for 2 years and you'll re-fi with no problem, this is how it works out here." I'll deal with the shame and guilt from falling for this after I get this current situated sorted. I had no interest in flipping houses or anything. The rental we were in was awful and I felt this was the only way to establish some stability for my family (wife, 3 small kids) who already packed up and moved cross country. Thanks for any info and for a forum where I could unload a bit!

[Moe Bedard]

Hi unomundo,

Welcome to the forum and thank you for joining.......


First of all is the second also being serviced by FF? I wouldn't wait for them to contact you at all............you would need to be proactive and call for updates at least 2-3 times per week.............
First Franklin
Loss Mitigation
1-800-622-5035

The modifications given are up to the investor on the loans.......so the negotiator can only put together a proposal based on your current situation but the investor would need to sign off on it............with the adjustment going up to 8.5% in two months..........you should have a shot at getting that fixed and lowered..........but they may set up the escrows to be included with the payments............


What you can do to reduce the credit card debt so that the ratios are better is to consult with CCCS (Consumer Credit Counseling Services) they are a non profit that can also help you put together the budget and financials along with helping with the credit card debt for a modification................which you wouldn't have any closing cost with like you do on a refi......

[unomundo]

The second is with FF as well. I'll get to work with credit card bit now. I have to say that the Home Loan Services people I've spoken to in the past 2 months have been friendly, helpful and personable. I did need to re-fax a few things but dunno, I've been pleased with my interactions so far.

THANK YOU!!!!

[unomundo]

Just called FF again to see where the negotiator was with my mod request. I spoke to a help-desk person who said there was no news and that I should continue to call weekly. My sense is that as long as I don't make a penny more than "too much" or a penny less than "too little" I might be eligible for modification. I've been ignoring all the other solicitations offering help that I've received in the mail till yesterday. Yesterday I received a mailer from a company offering loan papers in 3 days for a 5.5% fixed 30 year loan for my current 8.5% adjustable. They say they help underwater home owners and we're not there yet. Do I stick it out with FF and hope I can thread the needle of their modifcation requirements, or do I jump ship and give this company a call?? And if FF says "no", what recourse do I have?

[Moe Bedard]

Stay the course here...............there are so many scammers out there willing to take advantage of people when they are down............and this definately is one................and most all of them are on little post cards or letters in the mail...........

[unomundo]

UPDATE: I spoke to my negotiator today and he said he's working on files he received in November (he was handed mine on 07 JAN). He's tough to reach but to be honest he's very pleasant so luckily no horror story yet about nasty negotiators. He did a quick and dirty check of what he thought he could do and the propsed modification won't help me. If I go through NACA, would they work for a better modification or do they simply step in when people are not hearing anything from their company? Thanks

[Moe Bedard]

It is either or and you are already in the middle of the process here.........so you might as well see what the workout is going to be and then go from there.

[unomundo]

UPDATE: the negotiator came back with 2 options: 1) cutting my first to 6.7% and the second to 7.7%. This is still unaffordable so he proposed 2) re-appraising the house (full appraisal) and if it's lower than they currently think, then deferring some principal. While I wait the 30 days for this appraisal I cannot make my March payment (I can maybe cover the the first but not the second). Questions: Do I just skip the March payment on the second? What are my options now if HLS cannot make my mortgage more affordable?

Thank you!

[Moe Bedard]

We are not able to offer advice on whether or not to make payments........

if the workout comes back still unaffordable......and if this is the only property that you own............you can try going through NACA instead.............and see if they can put together a workout that is affordable..................click on the link for the info.................
https://www.naca.com/refinance/refinanceTenStep.jsp

[unomundo]

Thank you ***. Any idea how long the NACA process would take? It's been so long now and the last few weeks have been so stressful (I lost 15 pounds so it's a great diet tool) that my wife and I are tempted to ask for a short sale. There's no 1099 for the difference now correct? I believe there's a moratorium if you sell between 2007 and 2012 as long as the difference is less than $2 million...

[Moe Bedard]

you would be able to find the information regarding debt forgiveness on the IRS website at Internal Revenue Service

NACA takes approximately 30-90 days form start to finish depending on the negotiations with the investor.

[unomundo]

UPDATE: We accepted First Franklin's modification today. We could not pay our March mortgage but with this acceptance, we get March and April "off" and don't need to pay till May (and we remain current). Based on a new appraisal, they deferred some principal and lowered our rates (interest only for 3 years then the mod terms end). It's still going to be an extreme stretch from month to month but we're hoping to hang on with this new monthly payment till the economy rebounds or I get a raise or we hit the lottery. Thanks to *** for her advice and comments.

[Moe Bedard]

Congrats on the mod............if you find that in the future it is still difficult to keep up..............then you may want to try going through NACA at that time.........



Did you receive docs?

[unomundo]

Docs were being typed up today and I should see them early next week. Thanks once again!