My battle with Litton up till now

[Gabbysdad]

A little background and some questions about MHA and other "Mod" avenues.

I purchased my home in December of 2001, the housing market in out area (CT shoreline) had started a steep upward trend during 2001 and my wife and I were tired of renting. (sometimes I wish we NEVER bought) and were concerned that we would not be able to afford a home if we waited too much longer. The unfortunate events of 9/11/01 were a bit of a "blessing in disguise" for us. In our area fall into winter is obviously a "slower" time for housing sales and coupled with the "funk" that the country and especially the northeast was in we were able to purchase or home for $139,500 with cash back to us at closing. Fast Forward to 2005 and we had unfortunately not "adapted" well to a monthly payment of $1,200 vs our previous $600 rent. My wife had returned to school and get a better job and the childcare expense coupled with decreased income put us in a "hole" with some excessive CC debt and about 5 months behind on the mortage. My parents who were just about to pay off their own mortgage were able to "rescue" us with WaMu and "loaned" us about $12K to get completely current with all of our payments.

Soon afterward my wife was fully employed and we wanted to "refinance" our mortgage, getting a little "cash out" to pay back my parents and all the "old debt" that we were not able to pay off with my parents "loan".

Enter the "wonderful wizards" at CountryWide....
Our original mortgage balance at this time was about $129K during our initial talks with the people at CountryWide we were told that even with our poor credit we would be able to refinance, cash out about $25K and since we were in the peak of the "bubble" our LTV could be kept under 70% and we would have no PMI. Sounded great and we started the process, they promised we could close in about 2 weeks. We provided all the info and waited. The "predators" at Countrywide were so slick through all this that we did everything the told us to do and despite a "fishy smell" we did not question anything. We were told that we should not pay the late payment to WaMu for the previous month and not pay the current month. So about 2 days before we were to close and the "rate lock" would expire we were informed that there were some "issues".
#1 Since my wife had horrible credit from her "single" time and very little income compared to mine we should take her off the loan.
#2 The cash out was going to be slightly lower because all of a sudden we needed to pay "points" (not mentioned prior to this)
#3 Because of the new "cash out" amount being lower they suggested that at closing their attorney should "hold" onto the "cash out" funds so that I could have time to make "settlements" with my creditors. This should "give you a couple grand more cash".

I am pretty much "locked" into this deal at that point since we were already 2 payments behind again to WaMu and they were "dangling" 20 grand in front of us. SO we did all that and made "settlements" with my creditors to the tune of about $4K off the total.

At the closing I noticed that our discussion of a 30yr FIXED rate with NO points had somehow been twisted into a 3 year ARM with 2 points!! Now I had little experience and knowledge of these things and had no choice but to go along with it. We were reassured that we would have NO PROBLEM refinancing within 3 years so why worry about the ARM?

To sum up how I got here to this forum, We closed on the loan and made our payments until about 2 years ago when it was about time to consider our "refinance" out of the loan because the first reset was looming. I made some phone calls and gave my info, and low and behold my credit scores were NO BETTER than they were when we started the loan! Turns out that CountryWide (since then it was sold to someone else and Litton is now the servicer) did not tell me (why would they the scumbags that they are?) that all the $4K they "saved" me in making "settlements" could be legally left on my report for 7 years!! Since, the rates we were looking at getting along with the points and closing costs would not leave us in any better a position we decided to tough it out and live with the first reset. I could pay off those "old" debts and get them off the report a little at a time till we could refinance at a more acceptable rate.

Now Fast Forward to today.

I had lost a job soon after the first reset and the plans of paying off the old debt went out the window. I got another even better paying job and my wife also settled into a new job. Last summer we were "sitting pretty", we would finish the year with a 6 figure income for the first time in our (and immediate families) lives! Should be "living the american dream right!" WRONG

In mid October I was laid off from my job. My unemployment benefits per month (without any tax deductions) are HALF of what my TAKE HOME pay was. The job market here in CT (like the rest of the country) is horrible and I am essentially penalized to try and work part time or at a low wage job because it reduces my Unemployment and with 2 children increases my childcare costs beyond the added income.

The FACTs
Mortgage Balance about $165K
Monthly Payment incl. taxes and insurance is $2,150 (11%!)
Monthly Gross Income $5386
So we are at 40% payment/gross income.

I had contacted Litton numerous times, Loss Mitigation, Collections, Customer Service and was getting Nowhere.

My wife found this site and in all honesty it owe more to this forum than could ever be expressed in words.

We have sent all the info requested
Pay Stubs, Unemployment stubs, 2007 Tax return, utility bills, 4506, 1021, Hardship letters etc.

I emailed everyone *** had posted, at Litton including Larry Litton. I got some response and good information from Shawn Wilson who should probably be made a saint.

Here's where I am at today and my questions.
My Mod request is being handled by a Loran Kaufman.
They have all the info that they have requested.
They seem to be "dragging their feet"
I have not paid Feb, March and April's payment's
I have save enough to pay Feb's today and March's by the end of the month. April's will have to wait until late May and so on and so on...

Questions.
#1 Is there a "Directory" in Litton's Phone system? L Kaufman will not give me a direct extension even though Shawn Wilson gave me his.

#2 Since my wife is not on the loan but on the deed (CT is a community property state so by law the house is 1/2 hers) will her income also be included? I do not want them to say I cannot afford the payment on my unemployment and deny me.

#3 Should I make the past due payments as I can? It seemed as though I only got any kind of response when I became 30 days late on the second payment and 60 days on the Feb payment?

#4 Anyone know if it appears that lenders are going directly down to the 31% threshold? and how about the arrearages? Is there a lot of "forgiveness"

I thank GOD for this forum it has at least shown me that I am NOT ALONE!

[Moe Bedard]

Hi Gabbysdad,


Welcome to the forum and thank you for joining.............



Try calling the executive team to see if you can be put in touch with your negotiator............
1-713-218-4592


These are the steps that the lenders are taking as a part of the MHA program.............

In summary, participating servicers will (in order):

• Determine that a loan meets the minimum eligibility criteria (owner occupied, originated before January 1, 2009, UPB equal to or less than $729,750). If yes:

• Obtain sufficient income information to determine if the borrower has a front-end debt-to-income (DTI) ratio of 31% or greater (verbal income may be accepted for initial evaluation subject to verification prior to final approval). If yes:

• Capitalize (add to the loan amount) accrued interest, past due taxes and insurance, delinquency charges paid to third parties (e.g., for inspecting the property), and escrow advances by the servicer – but not late fees or other default fees charged by the servicer;

• Determine how much of an interest rate reduction is required to get the borrower's mortgage payment to 31% DTI, and if the DTI still exceeds 31% at the rate floor of 2%, modify the loan in other respects specified in the Guidelines;

• Apply a Net Present Value (NPV) test to determine if modification (including the incentive payments) provides the investor with a better financial outcome than foreclosure. If yes:

• Put the borrower on a trial modification at the new interest rate and payment for three months.

• If the borrower is current at the end of the trial modification period, the servicer will execute a modification agreement that includes escrows for taxes and insurance even if the prior loan was not escrowed.










We can not advise you on whether or not to make payments........that is an individual decision that only you can make based on your situation.

Litton will let you know what you would need to send in for documents and if you would need to send your wife's income or not.

[Gabbysdad]

***,

Thanks for the info,

The NPV any idea how it works?

I am assuming they get a BPO on the property.
They then determine if they were to foreclose how much of that value they might recoup at a sale or auction.
Subtract from that amount the costs to actually foreclose and get me out of the property.

Compare that to the ROI on the lower interest rate on the recalculated principle + the Treasury incentives.

The "better" of the two wins?

So hypothetically because I was "smart" enough not to get "upside down" I might be S.O.L.??

[Moe Bedard]

There is an NPV test about half way down this page
FDIC: FDIC Loan Modification Program Guide – "Mod in a Box"

[Gabbysdad]

Update:

It appears that Litton as of last week 4/15 had all the documentation needed. I am in contact via email with the person handling my account but am unable to get a direct phone extension.

It appears to me that in my situation (and probably MILLIONS) of others, this process should only take about 15 minutes once a BPO or some other Valuation of the property is "in hand". Why then does it seem that Litton is dragging their feet?

I have a couple of questions.

As I read all the info available on the MHA it appears that if Litton/its investors plan to receive ANY of the Treasury Funds then they are required BY LAW to apply this test to ANY mortgage 60 days late. Is this correct?

Is there any timeframe specified that they must apply this test?

Has ANYONE out there gotten a successful mod via the MHA program?

Is there any "reporting" method for someone who thinks that they might not be getting fairly treated per this program. ie; can we submit a claim to Treasury that we think we are being "passed over" by a processor or investor that might be participating? (currently I do NOT think it is my case BUT would like to know ALL my options)

One other "hypothetical" situation, this loan is supposed to be tied to the LIBOR average. I cannot for some reason find my original loan documents but I am pretty sure that at some point in the past year my rate should have actually decreased since all the Libor rates had dropped at one point.

Should I submit a QWR to substantiate the ACTUAL rate I should be charged? Can I accuse them of charging the wrong rate even if I only have a "gut feeling" that it was incorrect? Will a QWR also provide me information as to who or what actually OWNS my mortgage?

[Moe Bedard]

Most members have just begun the Trial Modification step of the program...........if the loans were eligible and backed by FannieMae and FreddieMac, the Trial part of the modification has been automatically sent on these loans.

For the MHA program, If you report a hardship, your servicer will:

• Determine whether your loan meets the minimum eligibility criteria (owner occupied, originated on or before January 1, 2009, unpaid principal balance equal to or less than $729,750). If yes

• Ask about current income, assets and expenses as well as the specific circumstances relating to the hardship to determine if you will be unable to make your mortgage payment. (Your servicer may initially accept verbal information about your income and expenses, but eventually you will need to provide proof in the form of tax returns, pay stubs and other evidence).

• Determine if your monthly first lien mortgage payment is more than 31% (approximately 1/3) of your gross or pre-tax monthly income. If yes:

• Add past due charges (interest, taxes, insurance and costs that your lender paid to other parties on your behalf – but not late fees, those must be waived) to the loan balance.

• Determine how much of an interest rate reduction will be required to get your first mortgage payment down to a point where it is no more than 31% of your gross monthly income.

• Apply a value test to determine if the cost of the modification (including the government’s incentive payments) is less costly for the investor than not modifying the loan (loans held by borrowers who have a lot of equity or whose incomes are very low in relation to the value of their homes probably will not pass this value test). If yes:

• Put you on a trial modification for three months at the new interest rate and payment level.

• If you successfully make the payments and are current at the end of the trial period, your servicer will execute a permanent modification agreement that will lower your interest rate to a fixed rate for five years, and then capped at a low rate for the remaining life of the loan.




Here is the link to the list that they update as the servicers sign the contracts to participate and receive funds...........

Making Home Affordable -Contact Your Mortgage Servicer


The program is voluntary to other servicers that are not on the list as of yet, these servicers do not have to follow the guidelines to the program......



You can write a QWR to obtain a copy of your Adjustable Rate Note to see what your rate is tied to, most are libor, and calculated on a 6 month basis, however each note also may involve "percentage points" that are added per the note to the current index at the time the change is calculated..............depending on that percentage.........even if the libor goes down...........the rate wouldn't necessarily follow that path.

[Gabbysdad]

Thanks ***!,

Here is some further info I have obtained that will be of help to anyone whose mortgage is serviced by Litton. In addition there is also some info on mortgages in Connecticut.

Per the person handling my Mod Application at Litton, I have found out the following.

As of 4-20-2009 Litton has not gotten all their investors to "sign on" to the MHA program. They are however, proceeding with Modifications based upon the MHA guidelines. It took approximately one month for me up until this point to make sure that all of the required info was sent in to Litton Loss Mitigation. I was JUST told a few minutes ago that a "Package" was mailed to me on Friday. I am assuming it is most likely a "trial offer" so to speak.

If you are looking to MOD with LITTON here is what I suggest to do from experience so far.

1. On this forum you can locate the emails of the executives of Litton that *** has posted here to help members. (note: Litton's I.T. people have blocked the use of the addresses with "@litton.C-BASS.com" in them just use "@littonloan.com" for ALL emails) first.last@littonloan.com

2: On Litton's website login to your account and follow the "Trouble Making Payments?" link to get info on the required documentation and the fax numbers.

3: Prepare a "hardship letter" and fax that along with
IRS Form 4506 signed, (do not worry about what years to check, if they want to see them all they will force you to do it anyway so why worry)
Fannie Mae Form 1021
Last Filed Tax Return
1 months worth of Pay Stubs (ALL income in household)
Any documentation of the "Hardships"
Last 3 months banks statements
To Loss Mitigation.

4: If possible obtain a full "scanned" copy of what you faxed and email it along with a brief note to ALL the emails you can obtain at Litton.

5: Give Litton about 2 days from the time you faxed and emailed this info to respond. Then FOLLOW UP, FOLLOW UP, FOLLOW UP.

6: Logging in to their website and sending brief emails is also another way to "keep yourself in front of them", their email system ties into their customer service notes system and forces a response.



Connecticut has put a law on the books that allows for Homeowners who are IN foreclosure to participate in a Foreclosure Mediation program. It is FREE and voluntary for the homeowner but mandatory for the Lender if you so elect to participate. Just do a "google" search for CT Foreclosure Mediation program.

[Gabbysdad]

Please for EVERYONES sake do not try to apply for a modification if you do not meet the requirements of the MHA program. IMHO, there are a LOT of people, (from first hand knowledge) who are "bogging" down the system with applications who are WELL UNDER the 31% of Gross Income Threshold, with all due respect these programs are meant to help those of us with REAL problems. Also, keep in mind that you might be causing yourself an issue if you apply. Example, IF for some reason your home is worth significantly more than the UPB and you are behind on the payments, you might "raise an eyebrow" towards the possible benefit of foreclosure to the investors. Remember all the lenders are applying some sort of NPV test to determine the feasibility of a modification. While it is unlikely that you came across info on this forum if you are not experiencing a "hardship" it is possible.

This forum is probably one of the main reasons that I still have any "wits about me" and still have "hair on my head". The information here is invaluable.

One thing that has helped me tremendously through this is to remember that even though this is YOUR HOME, and it has HUGE VALUE to you, it is merely an INVESTMENT to the holder of your mortgage. They most likely have absolutely NO EMOTIONAL attachment whatsoever to your mortgage and could care less whether you stay in your home or not on that level. They DO however have a VESTED and SERIOUS interest in their investment.

Since I am out of work right now I have plenty of time to research Foreclosure law and the process in general and have found that in MOST cases Foreclosure would be the LAST thing that the investors want.

Think of it as follows.
In todays economy there are few investments earning significant interest rates. So even if the investors could "break even" at the time of the foreclosure, meaning all the costs to foreclose are 100% covered and the entire UPB is recovered, they still want to EARN with that money. Where would they put that money?

The recovery percentage is around 50% of the UPB right now and with foreclosures on the rise and home values already low because of the lack of lending, why foreclose?

It is most often in the best interest of both yourself and the lender to modify a loan to an acceptable payment. Especially true if your home is not "worth" significantly more than your unpaid balance. BUT, the lenders are not equipped to handle the huge influx of applications for MODs that have come about because of the new Administrations plan.

What we have here is the proverbiable "rock and a hard place" situation. Many of us can't make the payments as they are right now, that is the "hard place" the "ROCK" is the impending threat of foreclosure. We need to use patience, courtesy and a little "persuasion" to get out from between the two.

[nitag]

Just wanted to wish you luck.. I am trying for the MHA plan which we would/should qualify for with the reduction of income and hrs.. I called Litton last week and was told they have all my stuff and to call back in 10 business days to see where they were at.. Do you have a name I can email to that you could share??

thanks, and good luck...

Anita

[Gabbysdad]

Anita,

You might "think" you are applying for the MHA mod BUT according to Litton as of today they have not gotten all the "kinks" worked out in that plan.

They are going forward and applying the same MHA Guidelines to the MODS they normally have been doing. I have spoken with a few friends and relatives who are in similar situations with other lenders and have found that most processors/lenders are NOT going to process any MHA Mods until about the middle of MAY.

IMHO, the Obama Administration while having Good Intentions has actually "stalled" the process for many people. Like any other Government program that was concieved during a presidential campaign, the Treasury's program was high on "Ideas" and low on "Substance and Details". The News Media who we all know are tripping over themselves to prove that Obama was cleary the "right choice" have touted this program and "put it out there" with very little details. Since this is an issue that is "near and dear" to us, OUR HOMES, many people have rushed out to apply for this program. What was left out of the news and conspicously left out on all the Goverment Websites, is that it is an ELECTIVE program. The investors and processors are NOT OBLIGATED under this program. They are simply obligated to apply the tests once they have registered with Treasury. If they choose not to accept the funding and incentives for the mods then they are not obligated to help out in any way other than business as usual.

Now it makes sense for them to sign on, of course, since many would offer some sort of MOD eventually anyway. BUT, I do not see as how these guys are all rushing to be the "first one in the pool". Look at how the executives at AIG were treated even though it was the government who allowed the bonuses. (I ashamedly admit it was my Senator Chris Dodd who did it) Or look at GM the CEO gets canned by the President after they took bailout money? I think they are going to "tread lightly" on their way into this program. Especially, in the case of Litton and it's investors. Whenever a company bears your last name (Larry LITTON) then you might be a little "gun shy" of signing on to Goverment Money.

It appears though that the need for modifications is probably GREATER to the investors and processors than it is to the homeowners. I mean you "can't get blood from a stone" and many of us are pretty DRY stones right now. If they foreclose on me for instance, My current market value is about $160,000.00 I OWE them $165,000. There are at least 50 properties just like mine within a 5 minute walk of me on the market. Many have been on the market for months. They would be lucky to see $140,000 for it. Factor in the costs they would have just to get me out, rehab (I would leave it ok but they don't know that) and then market and sell. They might clear $100,000 if that. In the mean time they would be responsible for the property taxes and insurance etc.

I could (do not want to, but could) just stop paying all together, bank the money I was paying payments with and wait for the Sheriff to kick me out. I could walk away having lived rent free for months and they are left "holding the bag". My credit is so bad now that the foreclosure couldn't hurt it anymore.

If they just modify the loan to something around the current 30 year rates, they will make money and I will be happy. In fact, aside from the loss of my job I had intentions of refinancing out of this loan sometime this year. They would have lost the potential profits anyway. Now if they mod my loan to something near or even better than I was looking for they will keep me as a customer and have the income for the life of the loan.



As far as who to email there at Litton:

I would start with the ERT team as noted elsewhere on the forum by ***. In addition Sean Wilson is EXCELLENT, I am not exactly sure of his title or position but he has been the most helpful.

Try to find out WHO you have been assigned to. I got a name but no phone number, by using the email formula in my post earlier I have gotten responses, though they are mostly "canned" type responses they are at least something.

If they tell you 10 days call in 5 days, if they say a "week" call by Friday of that week. Try to be courteous and back off a little if you detect that they are getting defensive. These poor people are being inundated with paperwork, phone calls, faxes etc.

Remember what I said before this is NOT as important to them as it is to YOU, think about it from the investment standpoint and you will be on the right track.

I am "HOPING" that what was mailed to me Friday was a "trial offer" so to speak. If so I will keep everyone posted as to what is going on as I find out.

[nitag]

I was pretty much told they haven't gotten the guidelines blah blah blah.. Which I believe and I do believe they are overloaded.. BUT then Litton needs to handle that!! That's my opinion.. I've been through this before when it was Avelo Mortgage and got my mod however with a 50% reduction in income I am going to try again.. Worst they can say is no and then they can have my 365,000 loan... My house is worth so much less but we don't care, it's home...

I am not behind on my payments until April 30th, I did make March payment but not until April 15th.. I have April's payment but not going to make it until May 15th.. Kinda going to stay a month behind.. I don't want to drain my account incase of an emergency..

I will try emailing a few names I have in the ERT dept....

Thanks and keep us posted on the packet..