Is Loan Mod (Interest Rate) possible at Virtual Bank or World (Wachovia)?

[Granny]

With 44 rental homes & duplexes in the low desert area of So. California, I've gone from being a "millionaire" to a "MINUSaire" in the last couple of years. The Riverside County Tax Assessor recently sent out new "independently reviewed market values" of the properties, showing their new values were 1/3rd to 1/2 of the appraisals which were done upon my husband death in mid-2006. The current balances due on the mortgages are about TWICE this new market value. The unemployment rate in my town is almost 20%, so I've had to lower rents, have more slow and non-payers, and more evictions. Because of the recession, the local water company was unable to put in the scheduled sewers, so I had to replace 4 septic tank sustems (at almost $20,000 each) and also had to put new air conditioning units in several places. This depleted reserves quite rapidly!

The EZ solution would be to WALK AWAY from all the mortgages. This would not result in a tax consequence. I really don't want to do that, so I'm trying to obtain an INTEREST RATE MODIFICATION for 2 properties with VIRTUAL BANK and 4 properties with WORLD SAVINGS (now Wachovia). By simply lowering the current rate 2% on an interest only basis ... the properties would meet their expenses, and be at rates the bank currently lends at. It would be a "win-win". While both banks initially verbally said "no" - I kept asking for a transfer up the line until I got a "maybe" and forms sent out. I stopped payment this month on the 6 loans, so that they would take my request seriously. Foreclosure would NOT result in an income tax consequence ... my only problem would be if the banks went for judicial foreclosure, which is unlikely.

QUESTION: As I fill out the forms they sent - is it wise to put down all bank accounts. The total looks high - if the bank is considering it as available money for just 1 property - but the accounts consist of the Security Deposits, Tax and Insurance reserves, and operating and repair expenses for ALL the properties.

Any other tips for filling out the forms? They are not set up for rental properties.

Has any investor here had luck with an interest rate modification?

[chasepmt2hot-firefighter]

I can't wait until someone answers you.

[vegasunderwater]

I will tell you my strategy is that I've been sacrificing putting off the loan mods on my units while I scurry to safeguard all exposed assets just in case these bastards get a deficiency judgement. That way, I needn't disclose what they don't need to know. They're more interested in INCOME AND ONES' ABILITY TO REPAY THE MODDED LOAN. But liquid assets - yikes, that's a problem because it's a sitting duck for them and easier for them to seize than, say, fixed assets like real estate. I would suggest counseling with a good asset protection attorney asap before disclosing ANYTHING TO THESE EVIL JERKS!

[otisanddinga]

hi moe,

I have 7 loans which all need modifying. Are the banks allowing rental income to be used as income for qualifying? There is a lot of confusion regarding this.

also, in regards to an initial audit on my loans, showing illegal practices, are the banks liable? What incentives do they have to modify? Is it worth a lawsuit if they refuse to modify?

Thank you