Lender called me to offer loan mod?!?

[wazdat1]

I'm in California. In 2005 we refinanced our home on a 80/20 first/second for a total of $493,000. First is a 30yr interest only ARM at 5.375% for 5 years held by Homecomings Financial($424,000). Second is 30yr fixed at 7.5% held by Guaranty Bank ($69,000). Current market value of the home is approx. $340,000.

So I get a call from GMAC Mortgage (parent company of Homecomings) and the person on the phone tells me that they're reviewing loans, know my ARM will begin adjusting in June of 2010, and the house is probably worth less than the first mortgage. Would I be interested in pursuing a VHA loan at 5.375% fixed for 30yrs on an approximate loan amount of $342,000?

Uh... Yeah, tell me more!

Now, I have never been late on this loan so I'm totally blown away. (In fact, over the last six months I've come to the conclusion that if the economy is still crap when the ARM starts to adjust that we're going to walk away.)

Apparently, GMACM is losing 3000 loans a month to foreclosure. Loans like mine, where people are upside down, they're just walking away. So they've decided to do something about it. I can see why. Even though they're going to forgive $100,000 of the debt (and issue me a 1099 for it), if I default on the VHA loan, they win because it's guaranteed by the government.

Has anyone else out there received one of these calls?

[Moe Bedard]

HI wazdat1,


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

GMAC has offered short refis to others on the forum and also working with the FHA H4H program as well................they are one of the few servicers that are doing this.


Keep us posted on your progress..............

[trajay]

Wow, how things would be so different if every lender was as nice and proactive as them.

[wazdat1]

So it's official. We've signed all of the paperwork to refi our first for $347,000 and got into a 30 year fixed FHA loan at 5%.

It means we're still carrying a first/second and have to pay PMI now, but I don't have to worry about the ARM adjustments killing us and the new loan is like $92 more a month. The best part is we've shed $90,000+ in negative equity.

Best of luck.

[Moe Bedard]

Congratulations!