To Pay or Not to Pay??

[winecountry]

My husband found this site a couple of months ago after receiving a call on his cell phone from someone at AHMSI who refused to identify themselves until my hubby stated who he was. When the caller couldn't confirm who they were talking to, they left the company name and a phone number. My hubby was so furious about the call that he researched the company name and found out who the company was. And this was all because we hadn't paid our mortgage in Sept. by the 15th.

First off, we wanted to thank Moe for founding this site. It's been helpful to read some of the posts and definitely hopeful to read the success stories.

We live in Temecula, CA where home values have absolutely plummeted. Some info on our loan:

Initial amt: 605, 000
Interest Rate: 8.4
3/37 ARM, set to adjust in August 09
Monthly payment covers both P&I
Current loan amt: 600,450

Our property taxes are not included in our monthly payment.

Never been past due late (over 30 days). I was late in Sept. (paid by the 19th) and I haven't yet paid this month. Of course, daily calls at 4 times a day from AMHSI.

My question: Will AMHSI take us more "seriously" if we are late at least one month? And how much of hit will our credit score take if we don't/can't start paying the mortgage?

We are struggling every month to pay all our expenses, esp. the mortgage. I didn't work for 5 years to be a stay-at-home mom. I did start working in March of this year from home and my husband also has a full-time job. Most of our credit card debt is due to my not working. Also, when we did our re-fi with Option One in June 2006, my husband was working as a contractor so he was getting paid more. When he was hired full-time permanent by the company he was contracting for in Oct 2006, he lost almost 12K in yearly salary. I've had to borrow against credit cards at least 4 times to help pay for the mortgage. We're basically living paycheck-to-paycheck.

Thanks to anyone who may be able to provide some insight/advice.

[Dan Bailey]

Winecountry,
Welcome to the forum. I don't believe anyone here can advise you to not pay your mortgage. That is a decision you will have to make . There are, however, some steps you can take to get the ball rolling and get some attention from people other than the collections dept.
You can start with writing a hardship letter and sending it to the appropriate channels in AHMSI, make calls to their home retention team within the company, etc. Many of these tools and contact numbers can be found through links on the Homepage of this forum.
*** or Moe will be by as soon as they can to give you some more specific answers . I did want to stop by and say hello, and thank you for joining...with it being the holiday, it may take just a bit longer for them to get to your questions.
Hang in there and good luck!

[elpjohnson]

winecountry......

Welcome!!! Here are some numbers to two vp's that you should fax your hardship letter and financial worksheet to.....

Jeanne Drake-Direct phone line 949-784-6011
Fax Line 866-642-4196

Jim Davis- Phone-904-996-9696
Fax-904-996-9653

Make sure you follow up with phone calls to both.

Welcome again.....and know you're not alone.

[Coloradofury]

WineCountry - While I can't advise you to quit making payments, I can tell you that Opt1 and AHMSI reps told me repeatedly that they couldn't do anything more for me - while I was current on payments. If you notice, most of the mortgage reduction and modifications in the news - are being applied to those who are 90 days or more behind on payments.

We were denied modifications twice over a 6mo period and only after falling several months behind did AHMSI make us an offer we couldn't refuse, taking our 9.9% rate down to 5%.

I know how beyond stressful it is to knowingly let your credit take a hit. Now we look back at the days we had our credit in the 700's and really wonder why we allowed that number tohold us hostage in axiety for as long as it did. You can only pay what you can pay and give the rest to the Lord.

Lifting you up in prayer and best wishes for a successful outcome.

[winecountry]

Dan, Erika & Coloradofury:

Thanks so much for your responses and encouragement. I made a conscious effort not to deal with anything re: our mortgage this past weekend. I wanted to enjoy my Thanksgiving.

With that said, my husband and I decided this morning to hire an attorney to deal with AHMSI. It was nerve-wracking, to say the least, to NOT make the November mortgage payment. We've never been late on any payments and have great credit. An additional concern is the fact that my husband works for a defense contractor and has a secret clearance. He wasn't sure how not paying on the mortgage would affect future clearance issues. He did talk with his HR rep and he was told that it's not normally a concern unless it's 90 days late - hopefully, we'll have some kind of resolution before the end of January. All I know is that it feels as though a huge burden has lifted off my shoulders and I can breathe and sleep at night again. I'm sure you can all relate.

I will post as things happen (or don't happen).

Thanks again for the support!

[elpjohnson]

winecountry......

I think it's a great idea that you hired an attorney to help you through the process. I know when I started out on my own I just became so overwhelmed and scared that I felt an attorney would be my best bet as well. Hopefully you'll get an audit done on your loan documents to find out if you have any violations to give you a little leverage when negotiating with AHMSI (that's what did it for me). Do pass on the VP's contact info to your attorney so he can use it to escalate your modification request.

Good luck, God bless you and your family during this holiday season.

[matt_in_arizona]

Winecountry,

God bless and good luck as well.

My family and yours are in the same boat. At least partially. If you read my other postings you can see what level of frustration and anger I have reached. Regardless, my conclusion to this crisis is totally counter-intuitive to how I was brought up and how I believe our society should function.

With that statement in mind, I believe in working hard, being honest and when conflict or hardship occurs, deal with it before it gets out of control. It sounds like you have attempted to be proactive in your approach. You saw the volcano smoking, the iceberg ahead and the tornado afoot. And did everything you could before the actual disaster occurred. And you may wonder why no one listened or gave a darn.

I encourage you to take back control. We are not helpless nor are we hopeless. This is not a one way street. Keep in mind the owner of your loan has a lot to lose.

First, depending on your interest rate, they will lose 7-13% annually (whatever your interest rate is) when you are unable or unwilling to pay. That is huge. Can you think of any investment that can give you a better return? As long as you pay on time, they have no reason to talk with you. Ask yourself why would a financial institution re-negotiate with someone who pays their super-high interest rates on time?

Second, your home is not worth what it states on paper. I can guarantee 97% of all houses in our market are not worth what they were 2 years ago. Does the amount on your principle exceed the real value of your home? If this is true, then not only is the institution still collecting ultra-high interest, it is collecting interest on a note that isn't worth the value of the asset. If they were to foreclose on you immediately then what would be the consequences (for them)?

If you follow my lead, then you can see. First, they lose a major revenue source. Second, their revenue source cannot be replaced because the asset will be devalued (depending on situation). Third, they will NOT be able to pass your interest rate on to another person who may or may not be able to purchase your home at a lesser value.

If you really think about it. They are playing the biggest fear game and chess match they can. They are banking that the vast majority of homeowners are good people that will exhaust all of their resources until they are on the verge of a total breakdown. When that occurs, and these institutions are faced with the loss of a revenue source and the "gain" of a depreciated asset, they "modify" your loan. This isn't brain surgery, it is highly trained actuaries working to the best interest of their "investors". No heart, no soul but cold and calculated.

This brings me to my previous statement. I was brought up differently. I don't like this game they are playing. But I believe that they have a great deal to lose if they don't modify legitimate loans to hardworking and honest people. Unfortunately, I think that they will only respond to us when it is in the final hour for them as well. Force the situation is my opinion. I am not afraid anymore and I don't think you should be either.

Matt

[winecountry]

Matt,

Thanks for succinctly identifying many issues. I don't like not paying, but have been forced to do so by the mortgagor's lack of action unless payments are not made. We had to not pay to start a loan modification process.

Clearly we and the mortgagor have a lot to lose if a foreclosure occurs. I'd even venture to say that the mortgagor has more to lose than us. We are hardworking people whose backs are against the wall.

I also see that those who really want to keep their home and have means to do so are also willing to keep a depreciated asset. Are we crazy? No, I don’t think so. This is “our” home and with it comes responsibilities. I’m still up for the responsibilities even with a devalued asset. All we want is some help from the mortgagor. You know what, when it is all done, the mortgagor will still be making money and we have an affordable payment. Win – Win.

Seems to be a no-brainer but we are fed-up with the stall tactics and lack of action from the mortgage company. We are being proactive and have hired an attorney to get us through this. There are no absolutes this will work for us, but I hear encouraging words and can only try.

If it doesn’t work out, then the mortgagor will have an asset worth less than half of what the loan was for, plus expenses of foreclosure, taxes, maintenance, marketing to sell again, etc. You get the picture. That is why I said earlier that the mortgagor possibly has more to lose than us.

I don’t like the game either, but have no other alternative.

I wish you success in your endeavor and God Bless.

Sincerely,
Winecountry

[matt_in_arizona]

Keep this forum posted, especially on the utility of your lawyer. I have my reserves but sometimes it takes an expert in the field to really make things happen. I can't imagine how many good families are in the exact same situation we are in right now. I do believe that if the lenders/servicers/banks etc, can just get their heads out of the sand they will realize that the old 6.5% rate for 30 years is still a great long term money maker for them. I just think they are still in the greedy stage and can't figure out how to continue to rape money out of their "clients".

[winecountry]

I just wanted to post an update. We had our Forensic Loan Audit performed a couple of weeks ago and were told last week that there were Federal TILA violations. The rate we were quoted was actually higher that what the loan docs stated which equated to almost 500K added over the life of the loan!

We talked to one of the partners in the firm we hired this past Tuesday and we spent about 45 minutes on the phone with him. He explained everything that had happened so far (procedures, processes, etc.) and told us that our loan mod package would be sent to AHMSI this week. Now, it's a wait-and-see for the next step. There's been a negotiator assigned to our case this week to deal with the mortgage company's negotiator.

I will post updates as things happen. So far, we've been happy with the law firm we've hired to deal with this stressful process.

Keep the faith, everyone!

[AGHome]

FYI - I was told by a mortgage representative that if you write a letter to your company and ask that they do not call you if you are not yet 30 days late, that they have to do that. He did that and the calls stopped. He said there was a law about that.

[winecountry]

Hi, everyone:

I just wanted to post an update to my original thread.

We did get a loan mod with AHMSI/Option One. It is a step-up loan with new payments beginning 6/1/09.

Here are the new terms:

1st year 4%
2nd year 4.5%
3rd year 5.5%
4th year thru remainder of loan 7%
So basically our payments went from almost $4400/mo to about $3200/mo

I wasn't happy about the step-up loan at first especially since the 4th year on it would be at 7% (our orig rate was 8.4) but my husband and I figured that things would get better with the housing market (we're in Riverside County are totally underwater on our loan) and I'll be able to find a better-paying job before it goes to the 7%.

We had to send their original loan mod offer back because they added delinquent property tax payments (although we were current) and tried to add future escrow and insurance payments on the loan.

The Law Offices of Griswold and Agdeppa were great in handling all our questions, inquiries, concerns, etc. I would highly recommended their services.

Now, here's the bad news - I lost my job in mid-March and have had no luck finding another job. We didn't tell AHMSI this although our lawyer knew and told us to wait to see if we would get a loan mod before doing anything else. I will be able to make our first new payment in June but my question is this: will we qualify under Obama's plan to try and get another loan mod so soon?

As always, this site with all its support has been a great source of comfort for us.

Thanks again for everyone's input and concern and keep the faith!

winecountry

[Moe Bedard]

we would not have an answer for the question...........that would be a question that AHMSI would need to answer as the MHA program only addresses the fact that you can only have one modification under that program.............but under some other programs there are stipulations that you would need to make 12 payments before applying for another modification.............you may want to see if you would be able to apply under the MHA program since it would be a different program than you were in previously.........

[gigem23]

I am in the process of a loan mod as well. Just an FYI, AHMSI has not started the Obama MHA program yet. They are in the process of setting up the program, but currently anyone who modifies with them will be on AHMSI normal modification program which has been in place for years, whick I was told you can try to re-modify after 12 months. I personally have a feeling that they are going to try and get as many people as possible under their orig. mod program before they start with the MHA, because with MHA they can charge NO fees and the rate can go as low as 2%. I got a step-up rate as well...5% 1yr...5.5% 2yr...6% 3yr...and a locked 6.82%. My orig was 9.05%...I am in Texas and luckily our housing market is not quite as bad as CA. Good luck to you...

[Solange]

Originally Posted by matt_in_arizona

Winecountry,

God bless and good luck as well.

My family and yours are in the same boat. At least partially. ...

First, depending on your interest rate, they will lose 7-13% annually (whatever your interest rate is) when you are unable or unwilling to pay. That is huge. Can you think of any investment that can give you a better return? ....

Matt

Yes, I can.

They either can manipulate the loan in their customary manner in order to foreclose on the home (a much greater return).

Or alternatively, they can create a modification with huge charges or balloon payment which will also be more rewarding financially, while appearing to be the "good guys" of the pantomime.

They even go after homeowners who have never been late once by faking late pay and adding bogus charges, after which they make false report to the bureaus to prevent refinancing and they hope to squeeze the poor elderly retiree into foreclosure.

That was their mistake, because the poor old retiree was trained by the Federal Government and will see them into court.

Your high ethics are commendable but totally wasted on money greedy crooks like AHMSI et al.