First time Buyer put into refi loan

[sofla1]

I am hoping someone can let me know if there is any recourse to this situation. My husband and I were first time homebuyers when the mortgage product we were put into was a refi. It caused problems at closing (no check for seller) and my broker came up with a second loan (also structured as a refi) that was willing to fund same day but was a horrible loan at a high rate with a ppp. I instructed the mortgage broker to bring both sets of docs to closing as I thought I might be able to get the seller to wait the three days by offering an extra $5K... but the broker only brought the new loan paperwork. We were stuck on the last day of an expiring lease/option contract. This was in Sept 2005, and the home was worth more than we were paying for it, so we reluctantly signed, being told we can refinance after the ppp period ends, no problem. We felt like we had a gun to our heads. We had given money down directly to the seller, the house went up in value, and we were living in it a year already and were very settled with schools, friends, etc. We has to sign away the 3-day right to rescind at closing, and sign a lot of docs that we never saw before as this all happened in one afternoon. Any thoughts or advice?

[Moe Bedard]

Hi sofla1,


Welcome to the forum and thank you for joining.................
We can not advise you on whether or not to take the offer you were given, that would be a personal decision that only you can make based on your situation.................and it would seem that you have brought up some very vaid points as to why it would be helpful............such as the self employment, the lower payments than rent, and be able to allow the kids to continue in the school system that they are familiar with..........

What you can ask the lender when you call to go over the offer, is, if you were to accept the offer, will you be able to try for a fixed rate modification and how long would you have to wait to do that............some require payments for 12 months before trying for another modification.

[sofla1]

Thanks for the reply! Of course I know you can't tell me what to do, I was just trying to weigh the options. I didn't even consider attempting another modification down the road, but that is an excellent idea! Thanks again.

[Maia7]

Hi sofla1 - you definitely have a lot to consider, that's for sure. I’m so sorry you are in such a tight spot and I know it is tremendously stressful. There’s hope. Here’s how I arrived at this loan mod offer:

After falling behind on my mortgage while I was unemployed I took the following approach in August from the bottom of my deep deep hole:

I stopped thinking about the loan for a second and asked myself exactly where I wanted to be. My answer was I wanted to stay in my house.

After I made that decision, I made a monthly budget. When making this budget I had two simple rules for deciding if I could afford this house:

1) I need to both be able to afford the monthly payment as I financially exist today (in my case I had to find a job with a specific amount of pay immediately. Which I was able to do thank the Universe.)

2) I must be certain I could afford the payment for 30 years assuming I don’t lose my job and I don’t get a raise for 30 years - seriously. Affording the payment in the future MUST NOT HINGE ON HOME PRICES GOING UP, SALARIES GOING UP, OR BEING ABLE TO REFINANCE. Doubtful your mind or your body could go through this stress again. Avoid it.

WE THE PEOPLE of this country can no longer accept loans structured around doing a refinance in the next few years. PERIOD. WE HAVE NO IDEA WHAT THE FUTURE HOLDS. WE HAVE NO IDEA HOW OUR BANKING SYSTEM WILL WORK A FEW YEARS FROM NOW. That’s reality.

Given my particular reality, I created a budget with a mortgage payment that allowed me to avoid living paycheck to paycheck. I have room to save 200 per month. If I cut out some luxuries I can do more. Cash is king and you gotta save a little every month if at all possible. If you don’t you could find yourself in your car just about where I was when you lose your job at a moment’s notice.

After I got squared away on the only terms that would be acceptable for me to stay in this house, I put together two months of bank statements, a hardship letter, last year's tax return, a monthly budget, and a copy of my job offer. I sent that to Jeanne Drake and Christopher Lindsey via fax and certified mail. I was specific in my letter and in my budget how much home I could afford. The goal of this negotiation is a 30 year home loan with a fixed interest rate I am able to afford in my budget as it exists today. NOTHING TRICKY – no stepped interest rates or balloons. To hell with all that garbage no thank you. I don’t know about you buy I have no idea what tomorrow holds.

Sofla1 - I think a good approach for you might be to figure out if you can afford your house long term and if appropriate send a loan mod request stating under what terms you can afford your house in a hardship letter to Jeanne Drake's office. If you can't make a budget work that avoids depending on future variables I would strongly recommend starting the mental process of accepting a move.

The additional costs of this mod that I’ve accepted as my share of the burden for the mess I’m in:

1) House is worth less than I owe
2) Loan mod application fee
3) Back payments
4) Back taxes
5) Monthly late fees

I’ve accepted my house is worth less than I owe because I plan on staying here. Nail the lid folks you’ll have to wheel me out of here after all of this!

I'm hoping things work out for you, I know this is really really hard. Just be very methodical about everything you do and think it through. This is a crappy process and it will be good to get it all behind you sooner rather than later.

[Maia7]

Sofla1 - I also want to say (sorry, I have a lot to say) is that if the most responsible thing for you to do is leave this house please don't see that as a failure. It would show a tremendous amount of strength and wisdom to be able to operate from a place of adaptability. When we cling to buildings and things at the expense of people and our quality of life - we lose the beauty of living.

It's only a building. That's all. A home can be made just about anywhere.

Good luck!

[sofla1]

Maia7-- thanks so much for all the kind words of support. I actually came to terms with leaving our home, accepting a foreclosure and a move. I was just waiting, and then this offer came and it has given me hope of salvaging the situation. It took a long time for me to admit defeat, and now I am in fighting spirit again. The offer would be great if it didn't depend on exactly what you mentioned... I would need to refi in 5 years, or win lotto or whatever to keep the house. I will see what this week brings. Thanks again for your help.

[Maia7]

I'm thinking good thoughts for you Sofla1. If it works for you and for AHMSI I'm sure keeping you in that house is preferable for them if you can come up with the magic numbers. I can't imagine they want to go through this process again with you in a few years. Those loans they're pushing are lazy thinking and don't work. That's why we're all broken right now. I'm beside myself they're still running at this problem with the same bag of lame tricks.

You'll get through this, hopefully much sooner rather than later. Good luck good luck and make sure you're calling directly into Jeanne Drake and her peeps there in Consumer Advocacy.

[sofla1]

I keep getting sidetracked on the loan mod issue, but does anyone know if it was "legal" to sell a first time home buyer a refi product when they were never on the deed?

[Moe Bedard]

you would need to have an attorney look at those documents and answer this question for you.............

[Safford]

Quick question, what address are people using to send certified mail to Jeanne Drake? Thanks

[sofla1]

I was looking for her email, too. Does anyone have that?

[Maia7]

I sent my certified mail loan mod request to this address, which is the homeowner preservation office and should reach Jeanne Drake (I also sent a copy to Senators Dodd and Frank and indicated that copy on my hardship letter):

American Home Mortgage Servicing, Inc.
6501 Irvine Center Dr, Mailstop: DD-HPO - Irvine CA 92618

Other good OOMC/AHMSI contact info courtesy of ***..........

Jeanne Drake-VP Home Preservation Dept.
Direct: 1-949-784-6011
Fax: 1-866-642-4196


Home Retention Team
1-877-304-3100

jim.davis@oomc.com (FL VP I believe)
Phone-904-996-9696
Fax-904-996-9653

bob.dubrish@oomc.com (CEO)

fabiola.camperi@oomc.com (Senior VP of Loan Servicing)

christine.sullivan@oomc.com (VP of public relations, always good to CC her if you are writing letters to media)

Speaking of media and other folks you may want to include in your communications if you're not receiving a response (*** posted these a while ago - thanks!- and I've found the journalists at the other end of the emails really responsive):


Dateline@NBCUNI.com
Nightly@NBC.com
Today@NBCUNI.com
WebEditors@newsweek.com



Enjoy!

[Maia7]

..............but I'm sure you'll only need to send your letter to the homeowner preservation office because they truly are being very responsive and doing a great job, at least by me, these days :-)

[Safford]

Thank you very much!!

[Safford]

I sent my hardship letter via FedEx to Jeanne Drake at the address above this week. I followed up the day after they received it and they called back very quickly and gave me a list of info. to send to them. I'm hopeful that the timing is right and things will work out...