Aurora loan services modofication process

[shangamir]

Hi all... I am new to this site... AWESOME JOB ***, MOE AND EVERYONE ELSE___ GOOD THINGS WILL HAPPEN TO YOU GUYS!!!

So here is my short version of a long story (it will still be long but I will save you guys the endless calls, waits, and misinformation and problems we had with AURORA… I am sure all other threats are similar to mine if it comes to that....
We are in San Diego, CA.

We have been trying to modify our loan with aurora and finally received a call from the underwriter telling us that the only mod we qualify for is the OBAMA plan. Our reason is that my wives pay went down 30% and we had a second child … and it has become quite hard to survive on a monthly basis... a daily struggle if one can say... we both have good secure jobs (knock on wood).

We have 2 loans;
1st one with Aurora 417K @6.5% (10 year interest only option over 30 years fixed rate)
2nd with Citi 172K @8.75% (fixed over 30 yrs)

Ã*Income before taxes is currently at $8432
--------------------------------------------
1st loan is $2230 (interest only)
2nd loan is $1370 (interest + principle)
Tax $500
HOA $511
Insurance $40
-----------------------------
TOTAL HOME EXPENSE: $4640

Our financial income over expense shows no surplus …We are current on our payment and told AURORA that we do not want to do anything to hurt our credit score. We are responsible folks that are going through rough times…
Well, the condo and the loan are both in my wives name only. That is good I guess (my score is the higher one)... We both have +730 and +770 credit and are current with all of our payments (we pay our taxes using credit cards.. so the debt is piling up but will do anything not to fall behind!) Savings is all gone as well …

She (Jamie), the underwriter, told us that they are able to qualify us based on our financials but they will only consider the 1st loan + taxes + HOA + home insurance and would not consider the second loan in their calculations... this would mean that to calculate to the 31% margin she is using $417K and not $588K. ???WHAT????

She said that she will adjust our payment from $2230 interest only to $2105 (this included our TAX and Insurance that would go into and impound account with them). This would save us $700 month ... I still don’t know how they came up with the number and what type of loan that would be (I am confused since they do not use they second mortgage as part of our overall debt)... she would not disclose the details. Anyone have similar experience with this!!!!?!?!?!?!

Also, this would create a balloon payment for the 4 months of trial period which, according to her, we would not need to worry about. This will apparently be added to the loan amount (we are nervous about this balloon payment since other ppl have had nightmares with that… what if they deny us???).
The Citi loan would not be affected by this (we are trying to mod that one also, but Citi has not answering machines and they do not call ppl back I guess… but we have an app in with them)

We have to make the discounted payment for 4 months but it will show as delinquent with the credit agencies and hurt my wives credit. Funny enough, we would only have a 3 month trial period if you were behind our payments (so much for being responsible and making all of our payments on time).
We called Experian and they told us that we should call the Federal Trade Commission. We called them and they took note of this practice and are currently gathering data for a possible class action lawsuit against various companies (I ENCOURAGE EVERYONE TO CALL THEM IF YOU HAVE COMPLAINTS, THERE IS SOMETHING BREWING UP… CROSSING MY FINGERS).

There seems to be a huge disconnect with the OBAMA plan and what the banks are doing… well, if the administration allows them to do it and everything is just voluntary … do I need to say more? Mr. Obama ‘YES, WE CAN� should go for ppl that you taking the tax dollars from and giving it to the banks and not vice versa (I am angry and disappointed about what is happening…)


We were also told that it is up to the loan agency to report the negative entry with each of the agencies. We would have the option to fight it right after each non payment and if Aurora would agree (or not respond to within 30 days of our action), they would remove the entries and my wives score would be almost as good as it was before the mod… I guess this is easier said then done, but at least a glimmer of hope. Jamie told us that the late payment would be reported by Aurora... well, go figure. She could not answer me when I asked her… “what are you guys going to do with the 800 million TARP money Aurora just got last week�… “I can not comment on that� she responded… HAHAA! (Should I cry or laugh)
Well, we told Jamie to send us the documents and maybe we can get some details from that … she will be sending in the initial contract for us to agree with the modified terms and send the final package after our second trial payment had been done (I assume this one includes the details). I will have this looked over by a lawyer (thank god for legal insurance)
After that, they would review our INCOME ONLY (not expenses) and if nothing has changes, well, they would then modify the loan and we could expect the payment to be similar to the trial version … but no GURANTEES…well, it would be nice to know the terms ahead of time so that I know what I am getting myself into. I do not want to go into foreclosure and it looks like this system is designed to set ppl up for that. I blame the administration for that… the banks are doing what Tim Geitner and his wall street and banking friends have told him to do!

My worry is that if we agree and do the modified payments, and there with be officially delinquent even though we would not need to be, they will have the upper hand, deny us and start foreclosure … after they have destroyed my wives credit and my children’s’ future.. IF I COULD ONLY GO AND SOMEHOW ASK SOME QUSTIONS TO Mr. OBAMA AND HIS SECRETARY! They would be in for a though time… (Anyone want to nominate me for this?.. I accept already … maybe more to come on this)


Please advice.. I am sure many of you who have applications in progress will face the same question and I hope my scenario will help you guys…
Contact your state legislature, THE FEDEEAL TRADE COMISSION, ALL CREDIT COMPANIES and so on…. do not stop! They have to change this practice.

Any suggestions.. Comments… hints … are greatly appreciated… I will keep you all posted!

[Walking Away]

Shangamir; Aurora is using the $417,000 because that's what you owe Aurora. The other amount is owed to Citi, so Aurora can't do anything about the money you owe Citi; unless you were to qualify for a refinance; that could cover both loans. When you bought your house house, did you put any money down? Most of us struggling borrowers here; don't qualify for refinancing, but you could ask Aurora if you qualify for a refinance. If you do; then maybe you could get a refinance without ruining your credit. If not; then a loan mod is the only way you'll lower your payment, so it's affordable. For borrowers like you who have fought to stay current; it's completely bogus that if you make your trial payments; that it would be reported as delinquent. This is just another example of the complete disconnect between the Washington politicians and the average American. Does Obama, Gaethner and the Senate even know that people staying current will have their credit ruined? Anyway; not sure what else you're really asking here. I guess you have to weigh your options.

[folide]

shangamir,
You cannot have your cake and eat it too. The way I see it is we took out loans in good faith of paying it back and for different reasons we need help because we cannot honor our commitments. Now we get a once in a lifetime opportunity to lower payments, interest rate, even principal. I feel that a hit to credit is a sacrifice we might have to accept for being able to modify our loan terms we would otherwise not be able to. I for one think it is a good and fair trade off and have accepted it. If you do not want to hurt your credit then just keep paying the loan you signed (contract) to pay.

[Walking Away]

Folde, I agree with you that borrowers made mistakes and got loans with interest rates that were too high. And for those of us(like me), who fell in delinquency before applying for a loan mod; then our credit does deserve to have some dings. But I don't agree with you that borrowers who have worked hard to stay current and who then make their trial payments on time; should then have their trial payments be reported as delinquent payments. That's completely bogus. If you and the bank sign to have a new lowered payment for 3 months and you make those payments on time; you should not be penalized at all. And you know; as more and more credit card companies go broke due to soaring delinquencies and bankruptcies; the banks and politicans might wake up and realize that once a person's credit rating is destroyed; they no longer care about missing credit card payments. So the politicians should very quickly change the law that allow people's credit rating to be destroyed, when thay make timely trial payments. The banks currently are allowed to hold the trial payment money in an expense account instead of applying the money towards principle and interest. Then; as I understand it; only if the borrower gets modified; will the money will be used towards principle and interest. But if the borrower gets rejected for a loan mod; the suspense account money can be used towards fees and foreclosure expenses. This is why borrowers should be cautious in agreeing to these 3-4 month trial payments. If you get rejecdted for loan mod, the money you sent the bank does not go towards your principle balance; the bank pockets your money

[folide]

You are correct in that it is ridiculous to have to have a hit to your credit just to be put in the plan. I misunderstood the post.

[shangamir]

Originally Posted by Walking Away

Shangamir; Aurora is using the $417,000 because that's what you owe Aurora. The other amount is owed to Citi, so Aurora can't do anything about the money you owe Citi; unless you were to qualify for a refinance; that could cover both loans. When you bought your house house, did you put any money down? Most of us struggling borrowers here; don't qualify for refinancing, but you could ask Aurora if you qualify for a refinance. If you do; then maybe you could get a refinance without ruining your credit. If not; then a loan mod is the only way you'll lower your payment, so it's affordable. For borrowers like you who have fought to stay current; it's completely bogus that if you make your trial payments; that it would be reported as delinquent. This is just another example of the complete disconnect between the Washington politicians and the average American. Does Obama, Gaethner and the Senate even know that people staying current will have their credit ruined? Anyway; not sure what else you're really asking here. I guess you have to weigh your options.

wlaking away (Thanks for the response); no, did not put any $ down.
How can they only use a portion of the loan without considering that you have anothet payment to make? Then this 31% margin is completely bogus... if they use only 80% of the loan, well then they should then use only 80% of my income to determine the new payment/ rate. I work with financial data for a living and everythig they are telling me does not make any sense...

.. Noone will refinance with us because our condo does not meet their loan ratio (i would do that in a heart beat if i could).. Not to mention that we have a 3 year pre payment penalty on our loan that will run out in May of next year !!!!! ...

I asked aurora about the refinance option, but they can not promise anything to be definite and they want us to pay for closing cost, appraisal ..etc. (if we qualify) and we simply don't have the means. Also, we would have to refile all the paperwork if we decide to go with the refi and don't get approved.. I don't want to go through all the run around again...it took us months to get them to talk to us.


Well, I contacted NACA and they told us that we have a predatory loan (surprise!) and they will work with us. Lets hope that they can help and that our income does not get slashed again...

[auroraproblem]

Originally Posted by Walking Away

Folde, I agree with you that borrowers made mistakes and got loans with interest rates that were too high. And for those of us(like me), who fell in delinquency before applying for a loan mod; then our credit does deserve to have some dings. But I don't agree with you that borrowers who have worked hard to stay current and who then make their trial payments on time; should then have their trial payments be reported as delinquent payments. That's completely bogus. If you and the bank sign to have a new lowered payment for 3 months and you make those payments on time; you should not be penalized at all. And you know; as more and more credit card companies go broke due to soaring delinquencies and bankruptcies; the banks and politicans might wake up and realize that once a person's credit rating is destroyed; they no longer care about missing credit card payments. So the politicians should very quickly change the law that allow people's credit rating to be destroyed, when thay make timely trial payments. The banks currently are allowed to hold the trial payment money in an expense account instead of applying the money towards principle and interest. Then; as I understand it; only if the borrower gets modified; will the money will be used towards principle and interest. But if the borrower gets rejected for a loan mod; the suspense account money can be used towards fees and foreclosure expenses. This is why borrowers should be cautious in agreeing to these 3-4 month trial payments. If you get rejecdted for loan mod, the money you sent the bank does not go towards your principle balance; the bank pockets your money

As someone who was current on their loan going into the trial payments, I would agree with the ding. No way was there ever going to be something offered like this without something showing on the credit report. Even if you settle with a debtor it is most likely going to be reflected on your credit score.

Perhaps there was a better way, but frankly that sort of ding you will make up in 6 months easy without any new inquiries.

As for the second mortgage you have, you will need to talk with them directly. I have had little success in getting anything other than a temporary reduction with all those reductions added to the end of the loan as a balloon. Wish you better success than I have had so far.

[Walking Away]

shangamir; I think the 31% of your income would be fair if both banks took part and did the 31%. I'm not the best with numbers, but I think the 31% on your 80% loan should still save you a lot of money. Obama is coming out with some new programs for people who have the 80/20 deals. So if you get the large loan going; maybe in a month or 2 there'd be help with the 20% loan.

[shangamir]

Well, I hope that we would save some money and have a fixed rate.

Submited my data to NACA and they will forward it to Aurora. We shall see what happens. They came up with about the same number our contact at Aurora came up with but it would not include this crazy trial oayments and the hit on the credit. They said that it is unacceptable to have ppl who are current to do what Aurora is suggesting...

Maybe they see the 20% (2nd loan) as unsecured debt (here in CA) and I could try to get it written off or reduced (I want to pay it in full if they would just reduce the interest rate... why do they want ppl get to the point where they lose all the $$$?)

HELLO CITI... I WANT TO PAY YOU THE FULL $$$$, JUST TURN IN ONTO A FIXED RATE OVER 30 YERAS FOR GODS SAKE!...

Anyone out there with a success story on their second?

[auroraproblem]

Originally Posted by shangamir

Well, I hope that we would save some money and have a fixed rate.

Submited my data to NACA and they will forward it to Aurora. We shall see what happens. They came up with about the same number our contact at Aurora came up with but it would not include this crazy trial oayments and the hit on the credit. They said that it is unacceptable to have ppl who are current to do what Aurora is suggesting...

Maybe they see the 20% (2nd loan) as unsecured debt (here in CA) and I could try to get it written off or reduced (I want to pay it in full if they would just reduce the interest rate... why do they want ppl get to the point where they lose all the $$$?)

HELLO CITI... I WANT TO PAY YOU THE FULL $$$$, JUST TURN IN ONTO A FIXED RATE OVER 30 YERAS FOR GODS SAKE!...

Anyone out there with a success story on their second?

I have been trying to work with the second since Aurora now has us on the trial payments. Though I saw on another thread that there is no credit hit for the trial period (confirmed by another user here).

The second has given us nothing to work on, they will not modify and the interest rate is almost 10%. We have now given them the option of settlement for which we made an offer (funds from friends and family), it is not much so I don't know if they will accept. If not, then my family may loose our home even after all this fight.

Our only other hope would be a BK filing to try and get the 2nd crammed down.

[shangamir]

auroraproblem-...I HOPE IT WORKS OUT FOR YOU! How much longer is your trial payment? Will they record it on your credit (did you ask them?)

FYI- for all: I was told that Aurora has a designated NACA contact that processes all NACA applications in house and to expect an answer within 30-45 days. The funny thing was that aurora took over 70 days to get back to me with their modified offer that did not make any sense....

[auroraproblem]

Originally Posted by shangamir

auroraproblem-...I HOPE IT WORKS OUT FOR YOU! How much longer is your trial payment? Will they record it on your credit (did you ask them?)

FYI- for all: I was told that Aurora has a designated NACA contact that processes all NACA applications in house and to expect an answer within 30-45 days. The funny thing was that aurora took over 70 days to get back to me with their modified offer that did not make any sense....

I have 3 more payments to go (they put us on 4). I was told by Aurora that the first payment we missed could impact our credit (as we had to miss one to pay the mod payment early as they requested). Another user here on another thread posted after completing his trial period there were no hits on his credit at all.

As for Aurora, although they were a pain to get information from at times, so far they have done exactly what they told us they would do. The 70 days is about what it took for us as well which is what we were told (60-90 days) by Aurora. The amount we were offered was not what they originally talked about; however, their amount added principle into the loan where the original did not. In the long run, we are okay with what they offered because it was at a going interest rate which according to Aurora will not require us to be on the 5 year reduced payment, but instead a permanent modification to the loan.

The only thing I did not like, is to get our payment within their 'target' range they reduced our escrow amount to an unreasonable amount which I know will leave a shortage and them later having to raise it.

Hope the info helps and good luck to you.

[shangamir]

Originally Posted by auroraproblem

I have 3 more payments to go (they put us on 4). I was told by Aurora that the first payment we missed could impact our credit (as we had to miss one to pay the mod payment early as they requested). Another user here on another thread posted after completing his trial period there were no hits on his credit at all.

As for Aurora, although they were a pain to get information from at times, so far they have done exactly what they told us they would do. The 70 days is about what it took for us as well which is what we were told (60-90 days) by Aurora. The amount we were offered was not what they originally talked about; however, their amount added principle into the loan where the original did not. In the long run, we are okay with what they offered because it was at a going interest rate which according to Aurora will not require us to be on the 5 year reduced payment, but instead a permanent modification to the loan.

The only thing I did not like, is to get our payment within their 'target' range they reduced our escrow amount to an unreasonable amount which I know will leave a shortage and them later having to raise it.

Hope the info helps and good luck to you.

Thanks much fopr the details. I have been told the same about the 4 months (except the credit hit, hopefully this will change)... I hope they get their act together and start helpng the backbone of this country, IT'S GREAT PEOPLE!

Please keeps us posted on any news... I am sure many ppl can use our example as a guideline, I remember how nervous I was when I firts started and did not knw anything about what could happen...

[Walking Away]

Auroraproblem; if they made a mistake with your escrow; why not tell them? They're getting incentive money but they're not supposed to rip people off. They did this to me and I told them they had the escrow wrong and they redid the numbers with the same rate. My escrow was off by $120/month which I would have had to pay. I thought they made an honest mistake with mine; but I've seen a few Aurora borrowers say their escrow was shorted.

[auroraproblem]

Originally Posted by Walking Away

Auroraproblem; if they made a mistake with your escrow; why not tell them? They're getting incentive money but they're not supposed to rip people off. They did this to me and I told them they had the escrow wrong and they redid the numbers with the same rate. My escrow was off by $120/month which I would have had to pay. I thought they made an honest mistake with mine; but I've seen a few Aurora borrowers say their escrow was shorted.

Ours was off about $150, do you think it would be better to say something now in the trial periods or wait until we are being offered terms on the permanent? I would hate to disrupt the trial period, we have already made our first payment.

[Walking Away]

Your payment would be 31% of your income, so they'd want you to make the same payment amount anyway. Best case scenario would be if you have your underwriters name and number and a direct phone number to her or him; you could call; so they mark it in your file. You'd want to let them know before they finalize everything; I could see where you want to just get the trial payments done with.

[RetroBoats]

They won't let you talk directly to the underwriter. The underwriter called my friend originally offering the "new deal"and gave her email address. After that she never answered emails and calls to Aurora would not connect my friend directly to the underwriter.

I hope they aren't leading folks down the path of foreclosure at the end of three months.

[auroraproblem]

Originally Posted by RetroBoats

They won't let you talk directly to the underwriter. The underwriter called my friend originally offering the "new deal"and gave her email address. After that she never answered emails and calls to Aurora would not connect my friend directly to the underwriter.

I hope they aren't leading folks down the path of foreclosure at the end of three months.

Are you saying that they completed the trial period payments and now no one is talking to them?

[RetroBoats]

No. she will complete the 3 payments in July. My point was the Aurora underwriter called her twice about the program and more or less put her on the program before she sent the signed paperwork back. She had follow up questions and never could get back in touch with the underwriter at Aurora......gave me a uneasy feeling.

[Walking Away]

Retro; I've got the same uneasy feeling. I've made my 3 trial payments but I'm told to send a 4th by June 1st. The day after they cashed my 3rd trial payment; I got locked out of their website and now they tell me I won't be getting a May statement in the mail. They said I'm approved and that sometime in June; my account should update and the website should work again with new terms and lowered payment amount. But for now to mail payment in. As I see it; this still remains a flip of the coin.

[Evan Bedard]

Walkingaway was your trial payment significantly lower than your normal mortgage payment?

[sval82]

Wow, these stories are all very interesting... I paid my first modified pmt for my trial period in April for 5/1, paid 6/1... Heard that my application is with the underwriter, that was end of April beginning of May maybe... They said the underwriter will be contacting me, so I'm doin my best to be patient, afterall I'm happy paying my modified payments... Also, I was told by Aurora that I would be getting dings on my credit rolling 30 day lates. Word on the net is that that is out, current barrowers are not going to get dinged for making trial period payments. My situation is similar to Shangamir's I am the only one on the mortgage, not my husband and I am using only my income to qualify for the modification... Shangamir is this what you guys are doing using just her income, or maybe that isn't an option because her income is too low? But if it is I'm that would help get your 1st even lower.

[shangamir]

Well, we had to submit both of our income since her income would be too low. We have other bills to pay and with her working @ reduced %time ... it's not going to work.

Did you talk to the underwriter before you started your trial period???

I am very curious if anyone has been modified after the trial months w/o their credit being hurt.

We have been talking t NACA and their mod process seems to be goinf faster and easier. We submitted all docs to them and they will represent us. I hope to hear from them within June and get an offer since the payment suggestion that NACA made was about $250 higher than what the AURORA underwriter had told us.

I am assuming that Aurora just populates whatever they got, qulifiy ppl for modified payment, then analyze the data while ppl are making the modified payments... you will have to resubmit some upated info .. and then adjust the financials at the end of the modified term. (lets hpe they mod ppl and don't trap them with foreclosures)

In contrast, it seems like NACA is looking at the detail data right away and comes up with a realistic numbers that shoudd be pretty solid. We have been told that we probably wont have to resubmit any other info once everything was submitted to AURORA.

We decided to use NACA since we felt like it is the safest way to have someone that knows hat they are doing talk to AURORA. If NACA can't get them to modify the loan, then who will.

[sval82]

Hmm... NACA sounds like the way to go... That is the toughest part just hoping that I am doing everything right and not really knowing, I've been reading stuff on this forum for a while and also on Zillow... But it seems like nobody really knows. I don't think that anyone should have completed the trial period yet because the program is so new MHA, that is... I guess if they come back and tell us that we don't qualify at the end we could try NACA, but I don't want to mess up the process, I'm just going to pay my payments, which are about 750 less than my unmodifiend mortgage and hopefully I'll hear something in July and if I don't I'll be calling them daily...

As far as the credit being hurt I am keeping good documentation and I plan to fight any negative reporting relating to the modification... It isn't right I have always paid on time and I paid the mod payments according to our agreement... Although, I do think it is a small price to pay for a big modification...

[Walking Away]

Evan, my normal payment had been around $2200 and my trial payments are around $1,700. I'm eager to wrap this up and move on; been fighting for mod for 15 months now. The trial payments are made and underwriter said I'm all set--just waiting for website to update and show the new terms or June statement to show mod is finalized. Website shows new balance as outlined by docs but has old rate still--they said Aurora's working on it