Wells Fargo Mod general questions

[fishtown11]

Hello,

First, this site is awesome. I'm glad homeowners have someone on their side.

Let me tell you about my situation:

Background: In May (2008), I purchased my home for $339,000 in PA. I have a stated income, conventional mortgage with Wells Fargo Home Mortgage which has a 30 year fixed at 6.25%. My principal and interest payment is around $1900 per month. I stated my income was $130,000 annually on the application and I am self employed as well. The principal balance on my loan is $305,000. My credit score is in the high 600's. I have not missed any payments to date. While my wife is on the deed, she is not on the mortgage. I have roughly $55,000 in unsecured credit card debt (around $1000 per month) and two vehicle loans (one work vehicle) with a total balance of $34,000. Also, I have a student loan in the amount of $18,000 and child support of $850 per month. I can show that after I pay my bills, I have anywhere between no money and a few hundred dollars a month. My wife earns $60,000 annually (if that matters).

Situation: Due to lack of business, I am going to be out of work for four months. When I return, I anticipate earning far less than I was. My last 1099 form shows a gross income of $90,000. With me being out of work, I will struggle to make any mortgage payments.

What to do?: What is the best strategy to reduce my mortgage payment? Can I skip payments then get a loan modification? Can I expect a percentage rate reduction with a loan modification (perhaps to 3%)? Can I expect a longer term (perhaps 40 yrs) with a loan LM? Will a LM hurt my credit? Will a LM effect a bankruptcy (CHP 7). Will they (Mort Co.) even entertain a LM?

I really appreciate any answers, advice, experiences, strategies, etc.

RC

[Moe Bedard]

Hi RC,

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

In answer to your questions........no a modification will not hurt your credit unless you default on your payment..........however a BK will effect your chances of one........if you file a Chapter 7 you would need to wait until it was fully discharged to apply for a modification...........in a Chapter 13 you would have to have permission from the court to apply for a modification.

If you can find out through Wells if your investor is FannieMae.........there is a new program beginning on Dec. 15th that might work for you........it is a streamlined modification and you would not have to be in default to get help.............

Call and see if that is the case and if that is who your investor is.........ask about the streamlined modification and when you can apply.........

Wells Fargo Loss Mitigation
1-877-216-8448


Please keep us posted on your progress............

[fishtown11]

Thanks ***! I appreciate the quick response.

I will keep you informed on my situation. I actually have a consultation scheduled with HOPE on Monday. Is that a decent first step?

Can you tell me a little about the Fannie Mae program beginning on December 15th.

Thanks so much for your time!!

RC

[Moe Bedard]

That is a good first step.......

[fishtown11]

Hello All,

First, thanks for starting the site. I contacted HOPE through this site and they have helped me immensly.

My situation is: I have lived in my house for 8 months. My mortgage is a stated income, 30 year fixed rate at 6.125. There is no 2nd mortgage, just a first. My mortgage balance is $305k and the home is worth between $290 and $350k. The loan is backed by Fannie Mae. My credit score is around 650. I also have two car payments ($1001 mo.) and $55,000 of unsecured credit card debt. I am self employed and will be out of work from January until May and won't be able to pay my mortgage until June or July. There is currently a three month 'freeze' on my account (Wells Fargo said my account will be frozen for three months and at that time a balloon payment of those three months payments will be due).


I realize every situation is different, but let me ask if any/all of the following is realistic to expect from Wells Fargo or I am being ridiculous.

1. Permit me to re-finance the six months mortgage payments that I will miss into the balance of the loan.
2. Lower my interest rate to the 4% area.
3. Extend my loan term to 40 years.
4. Lower my principal balance.
5. All of the above.
6. NONE of the above.

I do realize that every situation is different, and that nobody can truly predict what a mortgage company will offer, but any musings, thoughts, guesses, experiences, etc. would be greatly appreciated.

On a side note, should I contract any of my elected officials (US Senator, Congressman, etc) to put pressure on Wells? Will it even make a difference.

Thanks a bunch!

RC

[Moe Bedard]

All of the questions would be dependant on who the investor is on your loan...............

I suppose to see what type of options will be available to you, the forbearance agreement would need to be completed.

[fishtown11]

Hello,

First, this site is FANTASTIC. Thank you so much!

I have a few questions:

I am a self employed person interested in the Hom,e affordable modification Obama plan. Is the 31% front-end DTI goal after actual business expenses. (Example: I own a trucking company. I gross around $6020 before business expenses such as fuel, truck payment, tolls, insurance, etc. My adjusted gross income is $4063). Do I calculate the 31% before or after expenses?

My wife and I are currently seperated. We were married when I purchased the home. I was approved for the loan without her on the application. Will her income be considered toward that 31% DTI?

Is there a certain monthly surplus that the mortgage company will require I show? Right now, with the mortage the way it is, I am upside down on my bills by $700 per month. If my mortgage payment was adjusted down (after the modification) to 31% of my adjusted gross income, I would then have a small surplus.

I had been out of work since January and am just starting back. Wells Fargo allowed me a to miss my first four payments of 2009 but asked me to make a balloon payment in May of over $10000. There is no way I will have this money. Will this affect my loan modification application in any way?

I would appreciate any information or advice that you all may have. I will continue this thread to take you along my journey.

Thanks,

RC

[Moe Bedard]

RC,


You would need to contact Wells Fargo to begin the process for the MHA program..........

Here is the link to the information and contacts for the program through Wells Fargo.........
https://www.wellsfargo.com/mortgage/.../stabilityplan


According to the guidelines:

The 31% target that the modification is working to achieve through a series of steps................is just calculated using the mortgage payment including Principal, Interest, Taxes, Insurance and HOA dues if applicable on the first lien alone versus your gross income, mortgage insurance premiums are excluded from the PITIA calculation.................expenses get included into the backend debt to income.

The Back-End DTI is the ratio of the borrower’s total monthly debt payments (such as Front-End PITIA, any mortgage insurance premiums, payments on all installment debts, monthly payments on all junior liens, alimony, car lease payments, aggregate negative net rental income from all investment properties owned, and monthly mortgage payments for second homes) to the borrower’s Monthly Gross Income. The servicer must validate monthly installment, revolving debt and secondary mortgage debt by pulling a credit report for each borrower or a joint report for a married couple. The servicer must also consider information obtained from the borrower orally or in writing concerning incremental monthly obligations.

Borrowers who otherwise qualify for a modification under this program, but who would have a post-modification Back-End DTI greater than or equal to 55%, will be provided with a letter stating that they are required to work with a HUD-approved counselor and the modification will not take effect until they provide a signed statement indicating that they will obtain counseling.

The borrower’s income will be verified by requiring a signed Form 4506-T (Request for Transcript of Tax Return) and obtaining the most recent tax return on file for each borrower on the note. For wage earners, the two most recent pay stubs for each wage earner on the note will also be required. For self-employed borrowers or for non-wage income, the borrower’s income will be verified by obtaining other third party documents that provide reasonably reliable evidence of income.

Borrowers must also represent and warrant that they do not have sufficient liquid assets to make their monthly mortgage payments.

The borrower’s Monthly Gross Income is the amount before any payroll deductions includes wages and salaries, overtime pay, commissions, fees, tips, bonuses, housing allowances, other compensation for personal services, Social Security payment, including Social Security received by adults on behalf of minors or by minors intended for their own support, annuities, insurance polices, retirement funds, pensions, disability or death benefits, unemployment benefits, rental income and other income.