Is it Worth Asking for a Mod from AHMSI

[dianndara]

I've just found this forum and the stories have given me some hope that perhaps I can stabilize our finances *before* they become unstable. I am current on my mortgage and have never been late on the payment (except within the 15-day grace), but I see myself in real trouble in 6 months and am wondering if I have any chance at a loan mod from AHMSI BEFORE that happens.

I am in CA and have a $455K 2 year adjustible refi mortgage that is scheduled to reset on 5/1/09 and then reset every 6 months after that (a 2/28 with a 2 year prepayment penalty). The house is a very modest in Bay Area that I've lived in for 23 years and want to keep even though it needs about $50K in repairs at this point. The market value has been hammered from $675K in 2007 to about $375K (has happened to all the working class communities, sadly, but especially minority ones like mine with very high foreclosure rates), so I am now upside down at least 80K.

My income is the only one in the household as my husband went back to school after having been laid off 4 times in 2 years from retail management jobs. I have student loan debt from 2 kids I am paying off, and a car payment but no other credit card or other debt. I do take care of my elderly father who lives with us, too. Normally my income would be just enough along with my husband's annual student loans to make the monthly payment. However, nobody at my company got either a bonus (normally around $6K) or a salary increase this year due to the economy - like many I'm just blessed to still have a job - and I know right now that there is no way I can pay an increase in this mortgage of any meaningful amount.

Last month I got a letter from AHMSI warning of the upcoming reset based on 6-month LIBOR (which was on my original paperwork is estimated to be 2%, taking the loan from 8.05% to 10.05% - thank God LIBOR is currently under 2%) and inviting me to contact them before the adjust if I needed help. I don't know whether this is a serious offer or if it's just them covering their butts in the event that I ultimately fall behind. Has anyone had any success working with AHMSI BEFORE they fell behind on their mortgage? I've battled so hard to get my credit rating up from the 595 that necessitated me having to take out a mortgage with Option One to begin with. It's now at 675 but I can't refinance since I have zero home equity now - am I going to have to basically tank my hard work on my credit rating just to get out of this potential nightmare?

Any input or advice about next steps would be welcome. Thank you for hosting this wonderful forum!

[Dan Bailey]

dianndara,
Glad you found the forum and posted.
By all means, contact them as per their letter. Examples of hardship letters (pretty much first step in process-requesting a mod) can be found on the forums Home page in the "homeowners Toolbox" section.
Hang in ther, good luck and keep us posted on your progress.

[elpjohnson]

dianndara.....

Welcome to the forum and thanks so much for joining......yes, you can get a mod before the adjustment, it just takes a lot of hard work, patience and perseverance on your part....Dan is right, you need to start writing your hardship letter, gather your bank statements, w-2', paystubs and fill out your income/expense sheet (with a surplus of $100-$250 per month) and fax it to the following vp's

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

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

This should get the ball rolling for you.....if you have any other questions let us know and keep us posted on your progress!

[dianndara]

Thanks to both of you who responded. I am in the process of doing my financial worksheet now and had a couple of questions:

1) Do they want to see gross income or income after taxes? In my case, there is an enormous difference between the two (my employer deducts for health insurance, life insurance, etc.) and I worry that someone will look at the gross number and say "you can afford your payment!" when in fact on my take-home pay I cannot if my mortgage adjusts upward 3% as it is supposed to do in May. (I can barely afford it now)

2) I have a small (4%) deduction taken out of my pay for my 401K plan, something I was finally able to contribute to again for the first time last year having ended up with absolutely nothing saved for retirement due to a host of financial reversals. Are they going to require that I stop saving that amount, or do they see it as a legitimate expense? I'm nearly 50 years old and am terrified that if I don't keep saving this money I will end up on a ***-food diet when I retire in 20 years.

Hopefully these are not silly questions. I know I am in far better shape than some, but am also terrified of where things will be in 6 months if I cannot get this mortgage straightened out, especially since I've confirmed with a realtor friend that I'm now more 100K upside down on this mortgage and therefore will never be able to refinance out of it even if a national economic miracle occurs (highly unlikely) in the next few years.

Thanks to everyone for the advice, help and supportive forum here!

[elpjohnson]

They went by my husband''s net pay (take home pay) on our financial worksheet....so I'd say they would go by that. And 401K payments are legitimate expenses and I would fight with them over that if they say it is not....you have to be able to retire and live.....

Your questions aren't silly....

Hope I was helpful!

[ham1977]

If you are not comfortable call a nonprofit organization like NACA and have them do your financials for you. I not sure which other organizations are nonprofit.