Finally offered us a 5% mod after we ignored them for 5mo's

[Coloradofury]

What the heck?! Out of nowhere I get this email from AHMSI stating that an urgent offer is being expressed to us and today I receive that offer, reducing my 9.9% loan down to 5% - with no fees. The agreement goes, simply pay Oct and November at the new rate and AHMSI will stop the Dec 3 foreclosure. It gets better, as a thank you for my quick response they will send me a $250Visa gift card. Uhhh thank you Lord!!!!!
Here's the short of it: I quit paying my home loan in April and after too many dead end calls with India I received the notice of foreclosure set for Dec 3. Like so many I'd wished I'd found this site a year ago, when I first attempted a modification. Maybe then I’d have known exactly how much disposable income to show – and better yet – I’d have known what the bank considers disposable income. I have followed stories here for several months and wanted to chime in, but mostly I have just been stuck anywhere between prayer and panic.
My husband, a police officer had taken a job overseas to help pay off some legal debt - when we found out the bubble had burst and we would not be able to re-finance our home loan and the interest rate was about to jump from 6.5 to 9.9 with OOMC. With fury I began working to get a mod - but after the familiar lost faxes and my poor Indian speak, was viciously and with no empathy turned down - told we had far too much disposable income. Oh and the money we gave to our church should obviously be put toward the higher mortgage expense.
With the agonizing burden of my husband dodging bullets in Afghanistan away from the kids and I, on top of my managing the very same jumping interest rates on top of dead beat renters in our rental property 90minutes away, of which we would have sold had it not been for a prepayment penalty trap. We were already sacrificing trying to put every extra penny to pay off debt. With a $700 jump in payments we sucked it up and let our other bills suffer to meet the mortgage. At this point we refused to allowing our hard earned credit scores to suffer.
When my husband returned stateside and accepted a job paying a fraction of the contract job, we approached the modification again - this time with AHMSI. This second time - we were told we didn't make nearly enough money and were again turned down for a modification, after of course the standard lost fax dance. Well, at this point, we absolutely couldn't afford to pay the $2800 mortgage and were disgusted with AHMSI and the fact that Hope Now didn’t usher in any sort of change on their end. We sadly put our home on the market, hoping to even short sell. I spent the summer tending to my rose bushes, blooming bulbs and clematis vine, all the results of my new found gardening hobby that kept me going while my husband was overseas. I became depressed while watching the astonishing growth of my free Arbor Day seedlings - that had grown into beautiful little trees. I just couldn't handle the thought of losing my home to some snake investor, many of which were all over us and even taking pictures of my impending foreclosure in such beautiful shape. I could not stand the thought of giving up all the hard work we’d put forward. Does anyone else on here have plans to sneak back when the ground thaws and steal their bulbs and dormant vines?
So I hired an attorney to try and work with AHMSI and before he even contacts them I receive this offer? Anyone Else?

[Safford]

Thank you so much for the story. I provides some hope....

Are you happy with the offer? Is it going to make things work? 5% sounds really good...

I have been doing the same thing, sacrificing everything to make the payments not wanting to ruin the good credit I have worked so hard for....I haven't heard a story yet where people have been able to salvage their credit. I'm getting close to giving up the idea of salvaging my credit...

Knowing what you know now, what if anything would you have done differently?

Thanks again for sharing and thanks to you and you're husband for the sacrifices you have made for our country.

[sofla1]

I also received an unsolicited offer like yours. The 5% was interest only for 5 years and then reverts to the original loan rates and terms for the rest of the loan. Unless its fixed we will be in the same boat 5 years from now. I have an attorney looking at it now, and I would suggest you do the same. Good luck!

[Coloradofury]

Right - ours also is only a 5% for 60months, long enought they tell us to repair our credit and attempt another refinance. The thing is, we have an 80/20 both with AHM and there is no mention of what happens with the second. And because it's the first that the foreclosure notices have referenced, I'm not sure what impact the second has - does anyone know? I would assume if we don't make it up then they'll move forward with the sale.
I also have the attorney I mentioned looking at the offer. He was also baffled by there being no reference on the 2nd. I called and actually spoke to an American who was super friendly. He wasn't super bright however, and couldn't even tell me what my new payment would be, though it was calculated in my paperwork. He said we should assume I just need to catch up on the second. The new offer is lumping the 5months of payments we fell behind on to the end of the new loan. I am happy with that, but I will wait to see what my attorney might be able to work out on the 2nd. It's always been locked at 9.25 so I'm not expecting much. I'm not trying to push my luck, fully understanding how blessed we have been with the 5% rate offer on the first.
We're almost numb at this point. We decided several months back that we would have no choice but to file for bankrupcy - due to owning two separate homes both unaffoardable and both over valued.

[Coloradofury]

As for what I might do different - I really would have used the tools found on here prior to either loan modification attempt - realizing it's critical to show exactly $150-200 in excess income. I would not have included my pets costs or charitable donations. I also would have contacted some of the names provided on these forums for help when my faxes were being lost and I was being treated with disdain. Missing payments was the hardest thing in the world - as I'm sure most everyone can relate to. When you've spent your adult life working to be responsible and taking your fico score seriously it's nerve wracking to throw it all out the window. But as backward as things have become, the lesson learned is that you have to fall behind several months (and trash your credit) before the bank will do anything outside the box. There is no working with someone with a fico in the 700's because they assume you will get that money from somewhere as you've already proven with such effort.

[Safford]

Tjhanks for your response...

One of my expenses is my son's college education. Are they so rigid that they will say my son should cover his own expenses or something like that? Everything else I have is real straight forward, basic living expenses. Do they ask for copies of bills to substantiate all personal expenses?

Reading one of the "success stories", he showed a deficit initially. When they modified the loan he had a surplus.

One other concern I have is the cable tv expense for our business. We provide housing for disabled adults and one of the things included in our residents rent is cable and sometimes food. So, our monthly cable bill is over $1,000 for approx. 90 people. It is included in the monthly rent and I can't modify or eliminate it.

I think I will have to include a cover letter for our profit and loss statement, so the "negotiator" understands the nature of the business and our normal operating expenses. We cut absolutely everything possible at this point.

[Coloradofury]

Gosh - good question. I believe college for the kids is an acceptable expense. Maybe you don't state who's education you're putting money toward, just list as school bills?

Too bad you have to list the cable cost and can't just include that in a utility - they may take issue with it, but seems like the profit and loss sheet would help justify.

Best of luck. Is this the first modification attempt you are making? It's just so important to reflect that if only they'd adjust to the lower rate you could then afford the loan. Banks are just as desperate as homeowners right now!!! I'd say it's a better time to be needing a mod then say two years ago or longer when banks really didn't even speak in terms of modification whatsoever. I'll say a prayer for you and your family!

[Maia7]

Hello!

big congrats to you and your offer of a loan mod. I think that's totally fantastic. I'm kind of amazed this is starting to finally happen for some folks, I had lost hope.

I wanted to chime in and let you know I received a similar offer earlier this week from AHMSi. Long story short, they gave me a rate freeze back in July and shortly after that I was laid off for a second time this year. I was already behind on my mortgage. I stopped making my payments and prepared for the worst.

Lo and behold I was offered a job on Sept. 15. I sent AHMSI a copy of the job offer along with a hardship letter with some very specific requests:

1) Reduce my 1st and 2nd interest rates from 14.1 and 7.6 to a combined 5.00

2) Finance my unpaid property taxes from 2007

3) Put my late payments at the end of the loan

It took over a month and I received an offer last week for a reduction in rates on both loans: 2nd mortgage to 5.00% fixed. The offer for the 1st mortgage was 6.25% fixed. The rest of my requests were also honored.

Oh, and I was charged 500 dollars for the privilege of a loan modification.

My first payment which includes taxes and insurance is due December 1st. I signed my docs on Friday and sent them back. I fully intend on living happily ever after. This was a fair and reasonable work out.

This is still amazing to me as AHMSI has been a colossal and unfriendly pain in the butt for almost a year. They've been pretty terrible up until now. Maybe it has something to do with the bailout, maybe they finally realized working with us is better than the alternative, I don't know. Either way I'm really really really happy.

Let's hope these are just the first of many offers from AHMSI going out to homeowners in trouble!

[Safford]

Has anyone requested a forbearance while going through the process of getting a loan mod?

I like the idea of making a specific proposal, I guess all they can do it say no or counter propose.

I started talking to a law firm this past week. It good the hear that people are getting mods.

[sofla1]

Can a moderator/senior member help out on this? The unsolicited 5% mod offers some of us are receiving are for 5 years and then it reverts to the original loan terms. Mine are terrible: 8.8% adj. with 14.8 cap. I also saw a clause that basically signs away our right to defend against the original terms. I don't know if I should be doing that. I think my docs are full of fraud and violations and I was actually getting ready to do an audit and I do not want to sign my rights away for a quick fix, but I am also afraid to let the opportunity go. I do not trust that the offer is non-negotiable and exp. Nov. 14th. And back payments, fees, etc. that are listed in the docs are not itemized specifically enough for me. I stopped paying my mortgage a year ago. In my case I would be signing onto another $60,000 in debt on my property that I am already upside down about $100K. On the other hand, I need to stay in this area for school, and the new payment (even with prop. taxes, HOA fees, and insurance) would be cheaper than renting for me. The other aspect to consider for me is that both my husband and are are self-employed and they are not asking for any documentation on my end to prove income, credit is not a factor and its almost sign and drive (2 mo. payments down). Can Moe or *** or someone else with more experience give us some advice? I do want this over, but I don't want to act stupidly (what seemed to have gotten me into this situation in the first place!).

Also, Maia7-- were you working on a loan mod before this week? Have you sent all the paperwork they wanted before the offer? That's great that they offered you fixed rates.

[Maia7]

One detail I left out that I think is important to state:

In my loan mod docs I release AHMSI and the investors from all liability for any past offenses. Meaning, I agree not to sue them. My original loan is full of violations and I could have certainly mounted a posse and pursued damages. I decided to agree to release AHMSI/Option One/Investors from liability because I'm really tired and I'd like to just focus on my new job and my life. This might not be the right option for everyone so be aware that's what is going on here.

[Coloradofury]

Well Congratulations to you. Something is definitely up at AHMSI. You know, I have to wonder if it was your last statement that sealed the deal. I really appreciate the information. I just sent a note off to my attny asking that he counter on this offer with our request to bring both loans down to 5% and see if we can't lock them. I am more than happy to release them from liability as well and be done with all this garbage. Did you happen to be working with an individual negotiator inside AHM? Please update the site if anything should change. I pray they begin meeting all of our requests and maybe we can all be part of a bigger story of banks working with consumers to mutually improve the economy without government intervention. Can you imagine anything so American?

[sofla1]

I think something is up too, hope it is just realizing it is best for everyone to work things out. I am also going to try to get this fixed at 5%, although I am still waiting to see what my lawyer thinks. I called AHMSI on Sat. and the woman said this offer is non-negotiable, but I will still try. Please let us know if you are successful and I will do the same.

[Maia7]

Originally Posted by Coloradofury

Did you happen to be working with an individual negotiator inside AHM?

Originally I could not even get them to consider a modification. I called the general 800 number several times asking to be transferred to the Consumer Advocacy department. THEY REFUSED TO EVEN TRANSFER ME. The random people from India and the US call centers would just tell me over and over that AHMSI does not modify a loan more than one time within 12 months. My rate freeze in July counted as a mod and they wouldn't consider any further workout options. They essentially told me tough luck. One rep even suggested deed in lieu or finding an apartment.

Whatever,.

Anyway, once I got a hold of her direct line (thanks for the number Loan Safe!) I called and left J. Drake a message she immediately called me back that day. In my voicemail to her I said she should know that her reps refused to transfer me to Customer Advocacy when I called the 800 number. I also said that I am being told my loan cannot be modified twice in one year and the AHMSI reps are refusing to even address any kind of work out. They just demanded the 10k I owed. I was told this repeatedly over a three week period.

Once I talked with J. Drake I let her know I had a new job that paid well but I simply needed a modification to make it work. She brought Christoper Lindsey on the line and we agreed I would send all of my paperwork to Mr. Lindsey. He was assigned to my case on the spot. Ms. Drake apologized for the misinformation and said if I had the means my loan could absolutely be modified twice in 12 months if the situation warranted that.

Looking at my situation objectively, it was the best arrangement for AHMSI and for me. I'm sorry it has taken this long and trashing my credit to get here, but oh well.

Best to you.

[Maia7]

Originally Posted by Coloradofury

I pray they begin meeting all of our requests and maybe we can all be part of a bigger story of banks working with consumers to mutually improve the economy without government intervention. Can you imagine anything so American?

Forgot to add: this statement really got me thinking, I'm glad you said this Colorado. Ever hear that term "manage up?" It means when you've got leadership that is dysfunctional you manage the leaders. It's done very carefully, subtly and with stealth. Quietly and honestly trying to fixing the problem by getting way out ahead of it going at deliberately and repeatedly. I think it would be an incredible reinforcement of American ingenuity if we approached this situation by managing our financial system up. Some of us will surely fail but maybe we can change the top of system from down here, eh?

[Coloradofury]

So well put! How the heck does this site draw such stinkin' smart folks!!! I am feeling so patriotic right now! I am going to do something policitical. I am going to forward some of this to a site that is supporting one of the candidates. I really hate to say which one because I cringe at any sort of contention on this site where everyone is so supportive of one another. It is such a safe place to come!!!! Thanks to everyone for remaining positive and upbeat and just nice. I'm truly proud to be a part of this forum.

[Coloradofury]

I am all for the grounded Americans managing our messed up banking system - we'll attack Congress next!

[conundrum]

I got the same 5% loan modification offer. Some of the terms:

5% for 5 years then reverting back to original loan terms, +-1% every six months according to LIBOR.

We haven't paid anything March or so, and they are adding "delinquent interest" of $14K to our principal.

They are also adding over $1700 in Attorneys fees/costs/inspections.

Adding $15K in escrow shortage (when we refinanced, though our previous Option One loan had escrow for insur and prop tax, the new one didn't and we fell behind, despite trying to get it added back on over 5 times.) Probably legitimate cost though.

So....our Principal Balance has gone up $33K BUT they sent a relatively unsolicited loan modification offer. Our payment used to be $2400, now they want $1650 per month for 5 years BUT it doesn't include tax or insurance (about $7K per year).

Alas, to rent a house nicer than ours, we could pay just $1600 in rent. If we accept this current loan mod, our loan will be about $100K more than our house is currently worth.

Is this anywhere close to worth it? I'd really like to not have to pay a lawyer...should I just sent them my own request, for them to waive the fees and delinquent interest, reduce the principal balance, even and make it a 30 year fixed at 4% and see what they come back with??

I'd love some quick advice!!! Thank you!

Or do you think I just need to get a lawyer? Or just walk away and rent an even nicer home?

[Safford]

I am not an attorney or professional financial planner, so this is just a lay persons questions/opinion:

What would you gain if you keep the house?

Is your credit already ruined? If you give the property back or let them foreclose, is it going to be any worse?

If you were to rent for 5 years, in which case you would save $7K a year (taxes/Insurance), then save the $7K a year. You would have $35K of savings. If you keep the property, you won't have the savings, but you will have $100K of additional debt. Is is worth it?

I'm not sure if this is a legal issue or more appropriately a financial planning issue. In which case will you better off financially 5 years from now keeping the property or letting it go?

Anyway, just some random thoughts. Hope they are helpful

[tryingtostay]

more questions/thoughts for conumdrum.

do you live in a recourse state or non-recourse state?

adding in your taxes + insurance to your mortgage puts you about $2233 every month on their new plan. Basically, that's almost like freezing your current rate and "rewarding" you for doing that with an extra $33K on your loan. ugh.

How devoted to the house are you?

I think AHMSI must be getting pressure from somebody so they are sending these (IMO) ridiculous offers to make them appear like they are trying to work with homeowners.

[mistermister]

Originally Posted by Coloradofury

.......I quit paying my home loan in April and after too many dead end calls with India .......

Hi,
I wanted to comment on this part of the original post. When dealing with AHMSI (Option One) I have learned the hard way not to talk with anyone inthe India call center. They are often rude and/or incompetent and couldn't care less about you. To anyone dealing with AHMSI, I suggest that you ask immediately to be forwarded to the United States offices when they answer, or you are wasting time at best.

Besides the rudeness and being given false information on several things, I had a serious error in how a payment for a payment arrangement was handled becuase of miscommunication and poor attitude on their end. It took many calls to clear up (this is how I learned that I don't "have" to speak with them). Now that I am in the midst of a loan mod application process, I immediately ask "is this the US office?"whenever anyone answers, and if not, I insist on being transferred. (Never ask for an Indian call center "supervisor" either...that's a joke. I think the US reps are mostly based in California (?) so you will have the most luck calling during west coast business hours.

[Maia7]

Originally Posted by tryingtostay

How devoted to the house are you?

I think AHMSI must be getting pressure from somebody so they are sending these (IMO) ridiculous offers to make them appear like they are trying to work with homeowners.

I think you're spot on tryingtostay. If I were a betting girl, I might be inclined to make the assumption that there must be something a little more advantageous to the homeowner possibly on the the horizon forcing AHMSI's hand to move quickly. I don't know, like a moratorium on foreclosures for 90 days. And maybe also the possibility of the government purchasing these loans at a loss to the servicers and refinancing them for the homeowners.

It would be much for profitable for mortgage companies to keep the original principal in tact (add on back payments even!) and reduce the interest to a fair fixed rate over the next month or so before they're left with NO choice on how to restructure loans and do foreclosures.

Seems to me like we're in a pretty good spot at this particular moment to negotiate new, fair terms for both the homeowner and the investor. They might not have a choice a month from now how this goes.

Or perhaps, all these mucky mucks that are getting indicted are making AHMSI investors think twice about how important the appearance of working with the consumer might be to their future happiness.

Either way, if you can now afford your house after experiencing some bad circumstances that have set you back - there is NO REASON they should participate in SABOTAGING our economy by not working with you. That, would be unAmerican.

Good luck!

[Maia7]

Sorry, Maia the blabbermouth has more to say:

I also think we need to be aware because of the changing playing field we're going to see foreclosures accelerate over the next few weeks as well. Do not be disheartened if this happens to you. Be tenacious, be reasonable, propose what is fair and reasonable in your loan mod!!!!!!

Good luck!

[Coloradofury]

I guess we can speculate all day long (there'd be no Fox news or CNN for our entertainment if we had to stop guessing)... All these sudden offers also has gotten me wondering - If so many of us are being asked to make up 2mos payments suddenly bringing our defaults current in December - is this for the puppose of loan packaging, making us an attractive bunch to a not so savvy investor? Or is this for the purpose of salvaging Q4-FY08? Not too many banks are going to be able to share in those bragging rights.

Either way, it does appear we have gained some bargaining power and momentum and we need to use this position wisely. To quote from Maia's earlier post:
"Ever hear that term "manage up?" It means when you've got leadership that is dysfunctional you manage the leaders. It's done very carefully, subtly and with stealth. Quietly and honestly trying to fixing the problem by getting way out ahead of it going at deliberately and repeatedly. I think it would be an incredible reinforcement of American ingenuity if we approached this situation by managing our financial system up. Some of us will surely fail but maybe we can change the top of system from down here, eh?"

Am I crazy to think there's a possibility in the bundling of all of these offers - and going back collectively to lay out our terms as a package deal -something to the effect of 4% fixed across the board? I may be way too visionary but I'm really hoping my attorney or another reviews some of this thread today with some bold and clever gusto.

[Maia7]

Originally Posted by Coloradofury

Am I crazy to think there's a possibility in the bundling of all of these offers - and going back collectively to lay out our terms as a package deal -something to the effect of 4% fixed across the board? I may be way too visionary but I'm really hoping my attorney or another reviews some of this thread today with some bold and clever gusto.

hells yes Colorado! I think organizing is always a great idea. I'm a naive idealist but if a group got together that really had the means for a fair and reasonable work out but weren't getting it, they should try to go at it as an organized collective. It would be a great press opportunity for those running at the moment to stand beside them as well.

I'm listening to my favorite fight song right now, here's inspiration for the the fight today all:

"Oh the foes will rise
With the sleep still in their eyes
And they'll jerk from their beds and think they're dreamin'.
But they'll pinch themselves and squeal
And know that it's for real,
The hour when the ship comes in.

Then they'll raise their hands,
Sayin' we'll meet all your demands,
But we'll shout from the bow your days are numbered.
And like Pharaoh's tribe,
They'll be drownded in the tide,
And like Goliath, they'll be conquered."

Good luck!