Loan Mod on Current Pay Option Loan

[anteater]

My current loan is:

4.5% Adjusts monthly According to MTA Index (Currently lowest but was 8.75% at the highest)
$576,000 Original Loan Balance (80% Loan To Value)
$623,000 Curent Balance
$550,000 Current Home Value
$2,500 Minimum Payment
Set to Recast on April 2011

I refinanced my home back in April 2006. At the time my wife's income fluctuated seasonally so we went with this loan (big mistake) thinking we could refinance at the end of the 3yr hard pre-payment penalty. Thanks to the tanking market we were unable to refinance. Due to rise in the interest rate and depreciated income from my wife due to illeness we only paid the minimum while incurring negative amortization. Now my pay has been cut by about 15%. We can manage the current payment and also extra but I am fearful of the future (increasing rates adding to the loan amount and going to foreclosure). Basically what I would like to know is if I have a prayer in getting a loan mod with the current rate of 4.5% for about 40yrs? My loan was with Countrywide now Bank of America and is not Fannie or Freddie.

[Wizard]

Under the hamp program, when it gets going fully by the end of the month with most bank's you should
have a payment with taxes and insurance of no more then 31% of your current income.
That can be reached by extending the loan to 40 years, flooring the % rate to a min,
of 2% fixed for the first few years not to go over 5.42% est, for the balance from years 9-40.( Basically in a nut shell)

See the web site: Making Home Affordable - Home for further research on your
options.
Wizard

[anteater]

What is the "hamp" program?

[Wizard]

It's the abbreviation for: Home Affordability Modification Program

wizrd

[anteater]

Regarding my situation:

Should I wait until the rates start going up before even contacting my lender? And if rates stay low up to my recast date of April 20011 what is the possiblilty of banks and gov't willing to do loan mods at that date?

[Wizard]

It would'nt be a bad idea to talk to your loan company and ask for
a modification at this point! See if they are currently in the process
of offering them. I believe you have everything to gain with a lower
payment!!!

WIZARD

[kura52]

Originally Posted by anteater

Regarding my situation:

Should I wait until the rates start going up before even contacting my lender? And if rates stay low up to my recast date of April 20011 what is the possiblilty of banks and gov't willing to do loan mods at that date?

anteater, another option may be to contact NACA for assistance. They are a free service that can work with you and your lender for a loan mod. Many loansafe members have gone this route from what I have read. It would be less stressful that doing it yourself. I just read an article on line that stated a borrower needed to be 60 days behind to be considered for the HAMP program. I dont know this to be fact but that is what the article said.

I am currently waiting to see what BOA has to offer me in my request for a loan mod. They have finally approved me; after initially denying me ( i did not go thru Naca..I found out about them well after I started the process on my own) I am in a chapter 13 bankruptcy and this was the primary point i made in my hardship letter to them. I also pushed in making the point to them that it was my understanding they work with me due to the AG settlement. Many states were involved in that for the pay option arm loans. I am in michigan and michigan was included. By the way I am also current on my loan.

[anteater]

I have thought about chapter 13 myself. Would it possible to do a loan mod while in chapter 13?

[kura52]

My lawyer stated yes.(I am in Michigan) He even typed me up a letter to send in to them with my hardship letter. If you decide to look into filing, my best advise is to ask a million questions and write down everything your lawyer tells you. and do this everytime you meet with your lawyer.

[anteater]

PAST:
Back in Dec '08 I tried doing the loan mod (current on payments). I had to be pre-screened like this time and once passed I had to fax income verification, bank statements, hardship letter and monthly budget. Didn't hear back from Countrywide (before being bought out by B Of A) till around Feb '09 giving me a big fat NO! I asked why they told me it just wasn't accepted. I asked if I would be late on payments would I have gotten the mod they pretty much said yes without saying yes.

PRESENT:
I just got off the phone with B of A Home Rentention person (still current on payments). Gave him monthly income, car payments and credit card payments. He stated that I passed the screen test due to my negative amortization loan and loss of partial income. I will be getting a call in a couple weeks from B of A once they run my numbers with the investor of my loan for modification if any. Now the waiting begins...tic...toc...tic..toc...........

[kura52]

good for you! Keep us posted on your progress with BOA. I would think they will be assigning you a negotiator who may or may not be contacting you. If you set up an on line account with BOA for your home loan, you'll be able to see if they have posted that you "qualify for a work out" if you go to your accounts, then account options, then my home loans. then under account overview, click on financial hardship, then click on workout information.

[anteater]

Thanks for the reply. I will be checking the status daily. What a big stress this can be on your life.

[anteater]

I checke my loan mod status online and it stated that it was cancelled (one day turnaround). So I decided to call the B of A Home Retention number for an explanation. I spoke with Angela in Plan Tex who was a complete nightmare. She told me I was denied because of my "finances" and read some script cancellation message. I asked for a clarification on what was meant by "financies" and she said my money situation (that doesn't help me out). So I proceeded to ask for someone else to speak to because she wasn't much help. She gave me a HUD phone number and stated to call the B of A retention number again if I wanted to talk to someon else.

I went ahead and called again and spoke with Joel at B of A. He was much more helpful. Basically the investor that holds my loan is only doing capitlization modifications and the HAMP. The captilization mod does nothing for me and since 31% of my monthly gross is greater than my current PITI (principal + interst + tax + insurance) I didn't qualify for HAMP. He did state to continue staying current and call back at a later date when my PITI goes over 31% of gross or if my investor ends up having a heart and does other types of mods.

Is it true that the HAMP program will last until Dec. 2012? If so I will end up qualifying for sure when my loans recasts.

[luvmyhorse]

has anyone who has done the MHF mod, been forced to apply for and pay for a refinance first! That is what I was told. The refinance app is 400 and the agent told me I will be denied.