First Franklin Request and Help Needed

[upacreekinWI]

Our current mortgage interest rate reset on December 1, 2008. Our mortgage payment increased $260.87 a month. With the rising costs of every day basic needs, we will NOT be able to withstand this type of increase and will likely be forced into bankruptcy.

In 2005, we were given the opportunity to purchase an older Victorian home in an incorporated town in WI. This home is a 3 story home with approximately 2500 square feet of living space. The purchase price was $179,900. We operate a state licensed in home family daycare. Through September, 2007 our only source of income was the family daycare business.

We initially received a first and second mortgage with payments of $1010 and $343. Taxes and insurance were NOT included in this payment and were an additional $335 a month. The interest rates on these loans were in excess of 11%. We made every payment on time and in fact paid more than the amount due each month.

In October, 2006, we made the decision to refinance the mortgages and consolidate some additional debt at a lower interest rate. Our home’s appraised value at the time was over $230,000. We took out a loan for $209,000 with a payment of $1621.86 a month and an interest rate of 8.6%. This saved us money each month in interest and allowed us to pay off some other debts including our vehicle, some credit cards and the mortgages. The interest rate was locked for 2 years. Our credit scores were in the high 600’s and our business was growing. We planned to refinance and lock in the interest rate before the 2 year ARM expired.

Since October, 2006, we have made every payment on time and once again have always paid more then the amount due each month. Our credit scores are now in the low 700’s and our verifiable income has increased.

We have attempted several times since August, 2008 to refinance our loan before the ARM expires and our payment goes up. Our attempts have always been unsuccessful. The response we get from each lender is the same…”you don’t make enough money to support a payment of this size.” Each lender looks at the income tax returns for the daycare business and each lender comes to the same conclusion. Each lender says that we do not make enough money to support the monthly payment. It doesn’t matter that we HAVE and continue to make a $1625 a month house payment. All that seems to matter is what the figures on paper seem to say.

We received the notification in the mail on 10/17/08 that our interest rate would increase as of 12/1/08 to 10.375% and our new payment will be $1882.73. This is a monthly payment increase of $260.87. The payment and interest rate will continue to reset every 6 months throughout the loan term. Our loan was current at that time. However, we feared that we would fall behind very quickly once the increased payment became due on December 1, 2008.

The daily costs of living continue to increase. Costs for groceries, clothing, utilities, heat and transportation continue to rise. These rising costs combined with the increased payment make it impossible for us to keep our head’s above water and meet our daily financial demands. These rising increases have forced our family to incur a portion of the daily necessities of life with credit cards. I am fearful that there will come a day in the near future when our credit cards will be exhausted and we will not be able to meet the basic necessities of life.

At the end of September, 2008 we contacted HopeNow. HopeNow requested a five year interest rate freeze on our behalf. First Franklin, the organization that services our loan denied our request. They stated that according to our income tax returns and other monthly income we could not afford our home and that we would be better off to move into a home we could afford. We questioned this statement and inquired into our payment history and the fact that we have always paid an additional amount each month and have NEVER been late with our payment. Our payment history clearly shows that we DO and CAN afford our home. First Franklin did not deny our payment history but their answer did not change. They were not responsive and simply said that if we were not able to make the increased payments beginning on December 1, 2008 that we would leave them no other choice but to begin the foreclosure process.

Our home is NOT new, fancy or larger than our family requires. Our home was built in 1902. We have three children. Our home has three bedrooms upstairs and a den which we have converted into a fourth bedroom. Our home has 1 ½ bathrooms. Our garage is a detached, two-story old fashioned carriage house which a previous owner converted into a two car garage. Our vehicles are NOT new or fancy. We have a 2001 Dodge Durango and a 1993 Mercury Cougar. Both vehicles have clear titles. Our family doesn’t have numerous cell phones. We don’t wear designer clothes or shoes. Our children don’t have handheld video games or other luxury items many of their friends have. We have taught our children to shop in the clearance sections of every store. If it’s not on clearance we DON”T need it and even if the item is on clearance we still might not need it.

Our family cuts corners EVERYWHERE possible. We shop at Aldi’s. We are frequent customers at the Gardner Bakery Outlet on East Washington Ave. We grow and preserve our own vegetables in the small area we have to use for garden space. We clip coupons and take advantage of manufacturers’ rebates whenever possible. In July of 2008, I joined a state vanpool to save on transportation and parking costs.

I requested a loan modification through the loss mitigation department of First Franklin. I called the Resolution Team on 12/18/08 to inquire about the status of the modification request. I was informed that the request was approved and papers were sent UPS on 12/15/08. I received the papers later that day. I am horrified to find the details and language to be VERY VAGUE....and the payment increased another $12.95 over the $260.87 it already increased.

If I don't have the money to pay the initial increase what makes these people think I can afford an additional $12.95 more?

Here are the new terms:

Interest Rate 7.25% (3 year arm)
Principal and Interest Payment $1459.32
Escrow $318.10
Shortage $118.26
Total Payment $1895.68


Current balance due and owing on the Promissory Note and Security Instruments is as follows:


Principal: $205,682.73
Interest through 12/31/08: $355.70
New Principal Balance: $209.283.43


The new balance is MORE than I borrowed over two years ago. Is this predatory lending? Or what?



How can they add interest on this loan....I am NOT BEHIND IN MY PAYMENTS? How can I owe over $3500 in interest?


Can anyone help me figure out where to go from here? I don't understand these people.

Up A Creek in WI

[Moe Bedard]

Hi upacreekinWI,

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

If the modification is not going to work for you then you would need to call First Franklin and see what other options the investor on your loan would have.
Call and ask if there are other options to help.
First Franklin Loss Mitigation
1-800-622-5035

[upacreekinWI]

Will do. I will keep you posted on the status of my conversation with the loss mitigation department.

[upacreekinWI]

Was only able to leave a message. This is the second message I have left today for the lender.

[Moe Bedard]

Just keep calling until you are able to reach someone..............it is a daunting process but we have all been there...........hang in there.

[upacreekinWI]

Update....I returned the loan modification papers unsigned with a letter stating that the terms were unacceptable and not within our budget in addition to the very vague language within the documents. End result......First Franklin calls our home at least 5 times each day. My husband lets the calls go to voice mail. I take the calls IF I am not at work. I keep telling them that I am only able to send $1625 EACH MONTH and will continue to do so. I tell them that the expired ARM is NOT within our financial budget and that we need to work out an agreement which benefits both the investor and us. So far they are not budging an inch. My plan for now is to keep communicating the same financial circumstances that I have been communicating since day one and to continue paying the $1625 in the form of a cashiers check. The accept my payment, but hold it in a "suspense" account till the next one arrives at which time they make a full payment and leave any remainder in the suspense account.

Does anyone have any new methods or words of wisdom to share that might help me.?

Up a Creek in WI

[Moe Bedard]

If this is the only property that you own...........since FF is not giving anything that is affordable and also giving you the runaround.....which is typical HLS..............you may want to try going through NACA instead and see if they can help..........they have been negotiating low fixed rate modifications with the investor through the servicer in the 4-6% range...........and the services of NACA are free....click on the link for the info...........
https://www.naca.com/refinance/refinanceTenStep.jsp

[upacreekinWI]

Thanks for the information on NACA.

I have spoken with several of First Franklin debt collectors....they are NOT at all helpful. I keep getting letters from the customer service advocate at Home Loan Services that are absolutely a complete waste of breath. I had a market analysis done on our home and found out that we are definitely upside down by more than $25,000.

First Franklin continues to call my home up to 8 times each day. I told them not to call during the day as I work and will not be home to take their call. Then they want my work phone number....I refuse to give them my work number. I can only imagine how that would turn out.

I will keep working on them and not give up, no matter what.

[upacreekinWI]

Update.....Still no luck on getting a reasonable loan modification with a payment which I can afford. I requested a copy of our credit report and learned some interesting things.

I pay my mortgage to First Franklin Loan Services.

According to Equifax my mortgage is with National City Bank with a different address and different loan number but correct figures as the mortgage statement from First Franklin Loan Services.

According to Transunion my mortgage is with Home Loan Services with a different address than First Franklin Loan Services and National City Bank and different loan numbers however the same (correct) figures for balances owed.

How can it be reported two different ways on two different credit reports? This has me wondering just who has my mortgage and who I really do owe the balance to.

Does anyone know if there are any consumer protection laws which will make the credit bureaus and/or the mortgage servicer get the information uniform?