WAMU loan Mod offer...what do you think?

[jlh911]

Basic Data:

Original Loan:$477,000

Original Payment-Interest only:$2782.00

Was going to reset in two years as it was a fixed for five years at who knows what interest rate in 2011.

They are adding $4565.00 to the $477,000 of unpaid interest and expenses for a new modified principal balance of $481,565.00

Charging us $1000 up front for the modification fee.

New payment for the first year would be $2179.12 (at 3.1500%).

It would then go up to $2512.87 (at 4.43%) for the second year.

Year Three, it'd go up to $2860.96 (at 5.71%) and it stay there for the remaining life of the loan until paid off.

These are principal with interest payments, by the way

My question is this...does it sound good? I thought maybe they'd come down in the principal balance of the home as it's presently worth about $350,000.

I called them to see if they'd come down in the principal value and the guy stated that this was the best they could do and if we didn't want to take it to go ahead and sell the home.

Are they bluffing? why would they want us to short sell it or just let it go and have them take the house that's now only worth around $350,000?

What do you guys think?


Oh, and this is in Los Angeles County, California

Thanks!

[Moe Bedard]

Hi jlh911,

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

They have not been doing any principle reductions.........so this is a decision that you would need to make based on your personal situation and if it is worth it to you to remain in a property that is $120k underwater...........if you don't plan on staying in the home for good......then it doesn't make sense..........but if you do plan on staying.......the new modification will allow for paying down the principle over time.

As far as the modification goes..........it is a pretty darn good one........considering most can't even refi anytime soon.........and you are getting a 5.71% fixed rate now that you might never be able to refi into.......

so weigh it out..pros/cons and then decide.

[jlh911]

Thanks for the input...we will mull it over the week and make our decision.

In the meantime...anyone have any input?


Thanks!

[newjersey24]

Hey Jlh911,

Im new to this and done quite a bit of research because I been in a similar situation as you but with a 3YR ARM on a $380,000 home that I cant refinance.

As long as your new modified loan is principal n interest. I think its a good deal.

Principal reduction rarely, rarely ever happens. So i personally dont think its worth holding out for.

Ya modified loan sounds good, did you do the loan mod yourself? or had professional help?

Can u describe your hardship a lil if you dont mind that got you the loan mod offer?

Originally Posted by jlh911

Thanks for the input...we will mull it over the week and make our decision.

In the meantime...anyone have any input?


Thanks!

[marinah1208]

Jlh911,
It sounds like a good deal to me too...we are seeking a loan mod currently and if we were offered what you are being offered we would be very, very happy with the result. If nothing else, it buys you a couple years to plan what you want to do next...

Good luck and Happy New Year!

Marina

[strive2win]

Congratulations on your loan mod offer! Have you asked them to waive the mod fee? Just curious...

[newjersey24]

Yea why the mod fee?? Is that normal, can it be waived?


Also why the $4,500 added onto loan? Were you behind payments? I just want to get a better understanding of the fees.

[tracercbd1]

jlh911,

We consider ourselves a WAMU loan mod success story, and are in SoCal as well.

Take the deal. At least for the first year, it will give you some time to sort things out, and see where the market and economy goes. Remember, if you make ALL of your modified payments for the first year, you can request one more mod for the life of the loan, so if you don't like the increase in year 2 they've proposed, or your situation worsens, approach them 1 year from now for better terms.

None of us knows what the new administration is going to do, but I think many agree that something must be done to stop the bleeding of the housing market. Who knows, some sweeping national changes to all sectors of the lending and housing markets may be coming, and we can ALL get a better deal in the next 12 months - ANYTHING'S possible (look at how crazy things are right now).

WAMU is offering these types of mods now as "flavor of the month" so I don't think you will get anything better (for now). But, if the national and world economies continue to decline, who knows what they will be offering a year from now - you could get something much better.

As far as the "good faith payment" or what you are calling a "mod fee" goes, remember, you are renegotiating a real estate contract, and with any offer, there must be "consideration" in order to solidify the contract, and that's what this payment is.

If you are like us, and haven't paid your mortgage in several months (we were 90 days past due when our mod paperwork came through) this small payment is a welcome relief from our previous payment of more than $3250.00, and much easier to make, along with our first greatly reduced monthly payment of $1,062.00.

We have owned homes in California since 1987, and remember, this market rises and falls with the best of them. Real estate in California is highly cyclical, and while we've NEVER seen the types of drops statewide (or nationwide) like we are seeing now, it WILL eventually come back. It might take much longer this time, but real estate in California is really a long-term investment, and you need to be prepared for ownership in the long haul, rather than the craziness of the past several years and the largely unsupported inflation of home values that accompanied that craziness.

Just my .02, but as others have said, yours is a pretty sweet deal. Happy New Year.

[newjersey24]

Great story of success for your! Congrats... I too have WAMU on my 80/20 loan and going through process now.

Did you do the loan mod yourselves? what was the breakdown on the loan mod?

Originally Posted by tracercbd1

jlh911,

We consider ourselves a WAMU loan mod success story, and are in SoCal as well.

Take the deal. At least for the first year, it will give you some time to sort things out, and see where the market and economy goes. Remember, if you make ALL of your modified payments for the first year, you can request one more mod for the life of the loan, so if you don't like the increase in year 2 they've proposed, or your situation worsens, approach them 1 year from now for better terms.

None of us knows what the new administration is going to do, but I think many agree that something must be done to stop the bleeding of the housing market. Who knows, some sweeping national changes to all sectors of the lending and housing markets may be coming, and we can ALL get a better deal in the next 12 months - ANYTHING'S possible (look at how crazy things are right now).

WAMU is offering these types of mods now as "flavor of the month" so I don't think you will get anything better (for now). But, if the national and world economies continue to decline, who knows what they will be offering a year from now - you could get something much better.

As far as the "good faith payment" or what you are calling a "mod fee" goes, remember, you are renegotiating a real estate contract, and with any offer, there must be "consideration" in order to solidify the contract, and that's what this payment is.

If you are like us, and haven't paid your mortgage in several months (we were 90 days past due when our mod paperwork came through) this small payment is a welcome relief from our previous payment of more than $3250.00, and much easier to make, along with our first greatly reduced monthly payment of $1,062.00.

We have owned homes in California since 1987, and remember, this market rises and falls with the best of them. Real estate in California is highly cyclical, and while we've NEVER seen the types of drops statewide (or nationwide) like we are seeing now, it WILL eventually come back. It might take much longer this time, but real estate in California is really a long-term investment, and you need to be prepared for ownership in the long haul, rather than the craziness of the past several years and the largely unsupported inflation of home values that accompanied that craziness.

Just my .02, but as others have said, yours is a pretty sweet deal. Happy New Year.

[Lisa in MN]

I Agree with Tracerbd...take the deal. We got a similar mod offer and decided to run with it......yes the house is underwater, BUT the refi we did that has gottenus into trouble was used to pay off some other debt, so ithink in my heart of hearts, this is generous because in all honestly- we do owe this money, and plan to stay in our home of 18 years for a long time to come.
It almost seems like success stories have alot to do with whether or not the people can afford the loan mod long term and it seems like thats what they base it on. Ours will be fixed at year 4 at 5% for the life of the loan, and that is still 1,000 less than our 10% rate now- definately long term affordable even if we had just one income we could do it.

So take the deal and run.................................

[newjersey24]

Lisa saving $1,000 and getting a rate a 5% fixed sounds great!!!


I just hope i can get something like that. I'm currently facing a hike on my interest rate to 9.75% (3YR ARM reset) which will bump my payment another 300-400 range. I barealy was able to get by at current rate of 7.65%

If I can get 4.5% or something, I would be lot more stress free and able to retain my home.

Wish me luck on my journey. And congrats on you loan mod!!!

Originally Posted by Lisa in MN

I Agree with Tracerbd...take the deal. We got a similar mod offer and decided to run with it......yes the house is underwater, BUT the refi we did that has gottenus into trouble was used to pay off some other debt, so ithink in my heart of hearts, this is generous because in all honestly- we do owe this money, and plan to stay in our home of 18 years for a long time to come.
It almost seems like success stories have alot to do with whether or not the people can afford the loan mod long term and it seems like thats what they base it on. Ours will be fixed at year 4 at 5% for the life of the loan, and that is still 1,000 less than our 10% rate now- definately long term affordable even if we had just one income we could do it.

So take the deal and run.................................

[mike7311]

You should look at this as a business transaction and leave emotion out. Can you afford this? If not you will have to hold out because there is no use signing something that is only a bandaide. Yes holding out may lead to you losing your home, but you must also weigh in that they will only do one modification to your loan, very rarely will they do it again. If you cannot afford it. tell them that and plea your case for keeping your home, pull their heart string.

[Lisa in MN]

Newjersey24,
Thanks for the congratulations and good luck on yours! I feel the investors on our note were very generous with this modification and I am grateful. Ijust don't understand the run around most of us experience. WAMU finally responded to my QWR- 2.5 months after I sent it- and there is still inaccurate information in thier response. Information I was told existed in our file by one or two people, the QWR resondent said " they have no record of despite a throrough review" of our file.... who the hell knows. I dont even care anymore because we were given an affordable mod.
The great irony is if WAMU had been reasonable months ago with something like this, they would have started getting payments ( we have not paid a mortgage payment since April 08) We have spent the money on other necessary things- I was NOT going to sock it away and then have them deny a loan mod based on seeing this as an "asset"
Good luck to you, my advice is PERSISTENCE and approach it as a business transaction, keeping emotion out of your dealings, because thats how they operate.
Lisa

[newjersey24]

Thanks Lisa,

I will stay persistent and I give updates weekly on my thread and respond to all questions or comments.

Thanks again and congrats!!

Originally Posted by Lisa in MN

Newjersey24,
Thanks for the congratulations and good luck on yours! I feel the investors on our note were very generous with this modification and I am grateful. Ijust don't understand the run around most of us experience. WAMU finally responded to my QWR- 2.5 months after I sent it- and there is still inaccurate information in thier response. Information I was told existed in our file by one or two people, the QWR resondent said " they have no record of despite a throrough review" of our file.... who the hell knows. I dont even care anymore because we were given an affordable mod.
The great irony is if WAMU had been reasonable months ago with something like this, they would have started getting payments ( we have not paid a mortgage payment since April 08) We have spent the money on other necessary things- I was NOT going to sock it away and then have them deny a loan mod based on seeing this as an "asset"
Good luck to you, my advice is PERSISTENCE and approach it as a business transaction, keeping emotion out of your dealings, because thats how they operate.
Lisa

[tracercbd1]

NewJersey24:

Yes, I did our mod ourselves. I was their WORST nightmare, as I called them almost EVERY DAY until I got a response. Sorry, I don't have the exact figures in front of me, but ours too is a step mod, with payments being 2/3 of what they were for the first year, increasing to around 3% the second year, and back to @ 5% the third year and beyond. Still works for us.

Mike7311,

Your statement that banks aren't doing more than one mod is false. We have personal friends who did a mod last year, and have just been approved for mod #2 this year, as their situation has not only remained unchanged, but has worsened.

Again, property in California, jumbo loan, HUGE payment ahead. They were able to make the payments on the first mod all year, never late or short, so they fulfilled the requirements set forth in their original mod paperwork, and are now awaiting their final package for mod #2.

With how crazy things are right now, the entire economy going into the toilet, and things changing HOURLY, it just isn't fair to state that nobody is EVER going to get another mod, once they have done one. Neither you, me or ANYBODY ELSE knows what's around the corner in the next few hours, nevermind the next year or 2.

We are all in unchartered waters, and will just have to "stay the course." For our family, 1+ years of breathing room will give us an opportunity to get our other ducks in a row, but since our real estate has ALWAYS been a business, if WAMU/Chase won't play ball, they can add another giant loss in the form of our house to their investor balance sheet. The worse things get, the better the negotiating in my mind, and we haven't seen ANYTHING yet.

[mike7311]

Originally Posted by tracercbd1

NewJersey24:

Yes, I did our mod ourselves. I was their WORST nightmare, as I called them almost EVERY DAY until I got a response. Sorry, I don't have the exact figures in front of me, but ours too is a step mod, with payments being 2/3 of what they were for the first year, increasing to around 3% the second year, and back to @ 5% the third year and beyond. Still works for us.

Mike7311,

Your statement that banks aren't doing more than one mod is false. We have personal friends who did a mod last year, and have just been approved for mod #2 this year, as their situation has not only remained unchanged, but has worsened.

Again, property in California, jumbo loan, HUGE payment ahead. They were able to make the payments on the first mod all year, never late or short, so they fulfilled the requirements set forth in their original mod paperwork, and are now awaiting their final package for mod #2.

With how crazy things are right now, the entire economy going into the toilet, and things changing HOURLY, it just isn't fair to state that nobody is EVER going to get another mod, once they have done one. Neither you, me or ANYBODY ELSE knows what's around the corner in the next few hours, nevermind the next year or 2.

We are all in unchartered waters, and will just have to "stay the course." For our family, 1+ years of breathing room will give us an opportunity to get our other ducks in a row, but since our real estate has ALWAYS been a business, if WAMU/Chase won't play ball, they can add another giant loss in the form of our house to their investor balance sheet. The worse things get, the better the negotiating in my mind, and we haven't seen ANYTHING yet.

I think you read my message completely wrong. I didn't say they would not do a second mod, just that it is much harder to get. The deal is simple, get it right the first time. You will always find people predicting doom and gloom when comes to the economy etc, that doesn't mean it will happen. We are all in strong position right now to get our loans modified. But this will not last forever and as time passes the offers will not be as good, thats a guarantee if the economy gets better.

[jlh911]

Originally Posted by newjersey24

Hey Jlh911,

Im new to this and done quite a bit of research because I been in a similar situation as you but with a 3YR ARM on a $380,000 home that I cant refinance.

As long as your new modified loan is principal n interest. I think its a good deal.

Principal reduction rarely, rarely ever happens. So i personally dont think its worth holding out for.

Ya modified loan sounds good, did you do the loan mod yourself? or had professional help?

Can u describe your hardship a lil if you dont mind that got you the loan mod offer?

Sorry for the delay...yeah, I went about this myself. Researched my options, listened to the news and went ahead with it.

Took a while, almost three months for them to get back to me. I imagine they are swamped, so I can't blame them.

What contributed to this? My Wife got a new job that doesn't pay as much, but she's closer to home and has more time to do what she needs. She was way too far and too much money was going out in fuel costs.

Also, overtime at my employer came to a standstill for almost a year. I counted on that to get ahead on bills.

Various other things, but these were the main causes.

Good Luck.

[jlh911]

Originally Posted by strive2win

Congratulations on your loan mod offer! Have you asked them to waive the mod fee? Just curious...

Funny you ask this..yes, I did, but the way they justify this is we're behind 1 month in payment, so we should have this anyway. I didn't want to push the issue.

[jlh911]

Originally Posted by tracercbd1

jlh911,

We consider ourselves a WAMU loan mod success story, and are in SoCal as well.

Take the deal. At least for the first year, it will give you some time to sort things out, and see where the market and economy goes. Remember, if you make ALL of your modified payments for the first year, you can request one more mod for the life of the loan, so if you don't like the increase in year 2 they've proposed, or your situation worsens, approach them 1 year from now for better terms.

None of us knows what the new administration is going to do, but I think many agree that something must be done to stop the bleeding of the housing market. Who knows, some sweeping national changes to all sectors of the lending and housing markets may be coming, and we can ALL get a better deal in the next 12 months - ANYTHING'S possible (look at how crazy things are right now).

WAMU is offering these types of mods now as "flavor of the month" so I don't think you will get anything better (for now). But, if the national and world economies continue to decline, who knows what they will be offering a year from now - you could get something much better.

As far as the "good faith payment" or what you are calling a "mod fee" goes, remember, you are renegotiating a real estate contract, and with any offer, there must be "consideration" in order to solidify the contract, and that's what this payment is.

If you are like us, and haven't paid your mortgage in several months (we were 90 days past due when our mod paperwork came through) this small payment is a welcome relief from our previous payment of more than $3250.00, and much easier to make, along with our first greatly reduced monthly payment of $1,062.00.

We have owned homes in California since 1987, and remember, this market rises and falls with the best of them. Real estate in California is highly cyclical, and while we've NEVER seen the types of drops statewide (or nationwide) like we are seeing now, it WILL eventually come back. It might take much longer this time, but real estate in California is really a long-term investment, and you need to be prepared for ownership in the long haul, rather than the craziness of the past several years and the largely unsupported inflation of home values that accompanied that craziness.

Just my .02, but as others have said, yours is a pretty sweet deal. Happy New Year.

Great points. Some that my friend who's in the business said also.

We will be going in to a Notary to sign this paperwork on Monday.

Thanks!