WAMU loan mods for Rental home ?

[sgtwhy]

Last August we gave up trying to sell our first home -- and rented it out instead.

I knew I was going to be laid off but had another job lined up. So we used the settlement $$ to buy our current home and found a renter for the previous house.

We've been current on both loans but the rental (and economy) has depleted our savings account.

So we have no "fall back" in case of emergencies now and we are unable to get "credit" because of a bankruptcy 8 years ago ... otherwise my credit scores around ~720-730 (which I thought was good!)

To boot -- I'll be done with school in ~6 months and will have to start paying on my student loans -as well as my GI Bill ($1000/month) will run out.

To me, it seems within 6 months ... I won't be able to continue paying the mortgage on the rental house.

But everything I have heard/read indicates that you cannot REFI or MOD a loan on a rental property -- it has to be your primary residence. Is this true?

The rental is mortgage is owned by WAMU and my current home's is owned by WELLS FARGO.

Should I try a MOD with both lenders ?

Do I have to be in foreclosure before they will even talk with me ??

What happens if I simply quit paying the old mortgage ? No doubt my credit will be further ruined - but can they garnish my wages ?

Can I do a short sale to get rid of the property ? What happens to the difference between what I owe ($204k) and its sale price (~$170k?? guesstimate)



ARE THERE ANY OPTIONS FOR ME?!

[Moe Bedard]

Welcome to LoanSafe!

But everything I have heard/read indicates that you cannot REFI or MOD a loan on a rental property -- it has to be your primary residence. Is this true?

Yes and no. You can't get free help through a non-profit or through the Making Home Affordable program. But you can do it yourself or through a lawyer if you wish. It is not easy and definitely a lot harder than a primary residence. But is something that can be done and I have seen done many times in the past couple years.

The rental is mortgage is owned by WAMU and my current home's is owned by WELLS FARGO.

OK, so you will be dealing with Chase on the rental. They are tough, but willing to work with you if you can prove that you will not re default again.

Should I try a MOD with both lenders ?

I would.

Do I have to be in foreclosure before they will even talk with me ??

Most likely you will have to be delinquent but you don't have to be technically in foreclosure.

What happens if I simply quit paying the old mortgage ? No doubt my credit will be further ruined - but can they garnish my wages ?

Credit and possible wage garnishment. You should try and work with them and avoid this at all costs. If you cannot get a loan mod,m then try for a short sale and get a good Realtor or lawyer to help you avoid any future legal repercussions.

Can I do a short sale to get rid of the property ? What happens to the difference between what I owe ($204k) and its sale price (~$170k?? guesstimate)

You could be sued for that amount, but it hasn't happened much since this crisis has unfolded.

[vegasunderwater]

You're lucky you're underwater by a relatively small amount! Some of us are not so lucky. But, if you're smart enough to "quarterback" this well in advance, YOU will be the winner and the bank, the loser (or at least in a compromised position), which is the ideal goal.

Here's my gameplan:

1) Safeguard Your Assets well in advance - see an attorney who specializes in asset protection. Like buying insurance, you want to CYA just in case.

2) Hoard Your Cash - at this point - trying to save the sinking ship by continuing to make payments is a lost cause. DO NOT pay down debt - including credit cards. You're throwing good $$ after bad and making your opponent rich and you poor. It's all bad debt anyway - and the banks will wipe it from you as soon as you pay it off. Better to grab it all and beat them to the punch because they will never lend out $$$ like they did on the past. And don't worry about your credit. It's pretty much meaningless at this point now when 99% of investors can't borrow another dime anyway and the banks have frozen their underwriting. It'll take at least a couple years for the lenders to come out of their shell, if not longer, and by then, you're credit will be looking better - as long as they don't foreclose, as that takes 7 years before you can borrow again.

3) Do what it takes to mod your loans. I am. If you try to DIY and fail, hire an expert attorney to fight them. Perhaps he or she can find predatory lending violations with the lender that you might not even be aware of. There's a lot these lenders did to screw us that's hidden!

4) Stop being the victim like everyone else and start thinking like an investor again. This is a time of great opportunity, the ball's in our court, and deals abound and you're better off not using your own $$$ even if you have any left! Stand by and wait it out for even greater deals because it's gonna get worse before it gets better.

This is a game of chess and survival. May the best man win!

[Moe Bedard]

Great plan!

[Dan123]

To: Vegasunderwater

Can you explain what you mean when you say you are hoarding cash and not paying credit cards. Are you still paying the minimum or did you work out a lower payment plan with them?

Thanks for the input.

Dan