Second Modification with the 80 and strong arming the 20 to settle

[BillB]

I have an 80/20 loan on a condo I purchased brand new in Peabody, MA in September 2005 for 264k that was originally with New Century. I wasn't too crazy about the idea of the 80/20 but was told I'd be able to refi 6 months later and because they were with the same company I would be able to combine the two loans at a better rate, etc. Since the PMI I would have to pay on 100% financing couldn't be written off and the fact that I was led to believe I would only be in the original loan a short time and was backed against the wall with the closing date, etc. I accepted the agreement.

A short time after the 20 was sold to Chase and the 80 was sold to Litton as New Century went bankrupt. As that was happening the market collapses making it impossible for me to refi with two loans in two different companies despite the fact that I have no late payments on anything on my credit report with high credit lines but the condo is underwater like most properties are.

I actually got a modification done with Litton in November 2007 when my interest only arm jumped that basically which ultimately kept the rate the same and extended that for 22 months once the modification was complete. The 22 months will be coming up at the end of the year and the rate will jump again so I'm being proactive in getting a modification on that one now and not waiting until it actually jumps and I'm hoping it will be easier to do now that modifications are much more popular. I'm pretty convinced that my 80 percent loan falls under the umbrella of that Goldman Sachs settlement that recently became public with the Mass AG but when I called they said it wasn't and took me over two weeks to finally get someone to reveal who my investor was (C-Bass) which I'm not sure is entirely true.

My 20 percent mortgage with Chase that is fixed at 10.65% interest is another one where they wouldn't tell me who the investor was. I did the same thing of calling a bunch of different times and talking to different people and finally got someone to reveal that Deutshe Bank in Germany (currently on fraud charges from what I understand) are the investors although I'm not entirely sure of that.

Either way ideally I'd like to do a standard modification with Litton on the 80 and put some muscle behind it doing it with a qualified expert (lawyer, etc.) rather than myself and then trying to strong arm my 20 with Chase to a settlement since my condo's under water and if I filed bankruptcy I could throw the 20 in the bankruptcy and they'd get nothing. Also I have a feeling if I submit a QWA neither of these loans are going to be able to produce the original notes to foreclose making my case better whether it be a settlement and forgiveness on the 20 and or better terms on the 80. Right now I have perfect credit, etc. but have a lot of credit card and loan debt and look like the perfect candidate for bankruptcy on paper although I'd rather not do that.

I am significantly more knowledgeable on the above mentioned subjects than most people to the point where I'm looking to hire at attorney to pursue it assuming I can find a competent one that specializes in this area so I wouldn't be a client that would have to have my hand held through everything. I'd spoon feed all of the necessary paper work including but not limited to (hardship affidavits, financial statements, tax returns, etc.) so this wouldn't be something that would take up a lot of an attorney's time with grunt work. There are other factors in my situation (eg. high credit card and loan debt, etc.) that could make filing a BK my best option but I'd have to present all of the fact to an expert to see what my options are.

At the end of the day if I could get the 20% loan forgiven or significantly reduced so that my 80% loan which I currently owe 210k on would be the only money I owe on the condo which I'd have to guess is worth rougly 225k at the moment then I would be able take the instant equity and my perfect credit score to basically anywhere and do an actual refi. At worst if I were able to get rid the 20 and work with Litton to get a good low rate fixed for the rest of the loan I could even be better off just sticking with them. I am sure there are violations on both mortgages as I had a friend that was my mortgage broker and told me. I just would want to make sure anything I do wouldn't get my friend in trouble even though she is completely out of this business.

I know this is long and complicated but figured I'd throw the whole situation out there and see if it's possible to even get a second mod on the 80, if it's worth hiring an attorney to strong arm the 20, and if the person that worked at the broker I originally got the loans with could end up getting in trouble if violations are found.

[Moe Bedard]

I think that this can be accomplished provided your friend qualifies for a loan modification and bankruptcy. It's actually quite difficult to find an attorney that does both well.

You could look into the loan documents but this is a purchase loan and there is very little recourse on purchase money mortgages nor is there really any consumer protection. If there was fraud, maybe you can sue the broker, but many brokers are broke now. Broker brokers mean no recovery and spent legal fees going after someone you cant collect from.

[BillB]

What I meant to say with the "friend" was that the friend did the mortgage for me when she used to work for the mortgage broker (she's in a different career now) and I'd rather not open up something that's going to get her in trouble for doing me the favor to get me in in the first place. She didn't fudge anything bad that had to do with me. It was more the owner/occupancy rate was fudged since it was a brand new building and the underwriters wanted 80% owner occupancy which was impossible since it was an 80 unit brand new building and I was roughly the 10th person in the building to close and move in. If they just go after the broker company or New Century itself then I wouldn't care but I wouldn't want to put the person that did it in trouble.

[BillB]

To be honest with you I'm not even 100% sure that she was the one that did it. It was going back and forth a million times in underwriting and I was clueless about mortgages back then. I found out in conversation a while after I had purchased the condo and don't really talk to her anymore since she moved out of state but I figured I would just ask to make sure I wouldn't get her in trouble in the event that it was her who did it. If she could potentially get in trouble I would try tracking her down and asking her if it was her personally that did it but if she can't I wouldn't even bother asking if it was her. I just figured this was one potential violation (although not exactly bad) that could help my negotiating position and nothing more but don't want to create any problems even though it had nothing to do with anything I personally did or knew about.

[Moe Bedard]

OK, Gotchya. I would just pursue the loan modification with NACA or an attorney. You can maybe perform a loan modification on both your first and second top get a rate and payment that you can live with.

I have seen 1st mortgages go down to 1% and 2nds to 0%. So anything is possible and the fighters usually get the help. But as far as legal recourse, you can speak with a few attorneys, but my experience in working with lawyers on similar matters is that they usually will not take these cases.

I wish you luck and please feel free to join other discussions if you'd like. Also, please keep us posted on your progress.

[BillB]

Yeah I see what you're saying about lawyers not wanting to take these kinds of cases on. It's gotta be a time consuming thing and I'm sure what they would charge people like us to do a thorough job may not be worth it to us unless we had a guaranteed victory. Yes, I would certainly like to participate in other discussions on this forum and will be glad to keep anyone posted on my progress.

So you're saying that it isn't totally uncommon to get a second modification done on the 80? My thought was that either they would give me a hard time because they already gave me one (which was really just a band aid) or in the best case scenario they give me one without as much grunt work since they should have more up to date records on me from doing the first mod less than two years ago and that this could be more of an "updated" mod since they would basically just have to reopen the first one. I've never tried with the 20 but will certainly do so now and am just trying to determine what my best plan of attack is.