Help! Question about attorney's advice about loan modification process

[alexlikh87]

Hi everyone,

I just joined this forum and am in dire need of some advice and will appreciate any help. I went to see a group of attorneys and they are taking on my loan modification and are doing all the paperwork. I have high credit card debt and the minimum payments on those add up to a pretty big amount. My issue is that they told me to stop paying about 1/2 of my credit cards to show the lender (Wells Fargo) that I am doing and will do anything i can to keep paying my mortgage (I've never missed a payment). I'm a little apprehensive about this step because this will completely destroy my credit score and is a pretty big step to take just on someone's advice. I truly cannot afford to pay the mortgage the way it is now and have been using funds from credit cards etc. to cover that amount, but in my opinion wouldn't showing my high credit card debt and how I've been using that money for bills and keeping any cash I earned or even taking out cash advances on cc's to pay the mortgage have the same effect? Without me having to stop paying the minimum payments and ruining my credit? Also from the little I've had time to read I get the sense that for the most part people get loan modifications after they are delinquent a few months, but these lawyers are telling me to keep paying the mortgage and stop paying the credit cards and I'm not sure that's the right step. If anyone has any ideas about this or any advice I would really appreciate it! Thank you in advance.

[auroraproblem]

Perhaps speak with another attorney if you can (like a second opinion). I am not a lawyer, but my situation was not much different than yours. Global default is an easy explanation to any mortgage company (they should understand as many are banks and participate). If you miss those credit card payments they are likely going to apply a default rate, the other half of them you did not miss can apply default rate as well (hence the global part).

It did not sound as though you were planning on filing bankruptcy (since you were worried about the credit hit of not paying some of the cards).

[I'mSickOfThis]

Originally Posted by alexlikh87

Hi everyone,

I just joined this forum and am in dire need of some advice and will appreciate any help. I went to see a group of attorneys and they are taking on my loan modification and are doing all the paperwork. I have high credit card debt and the minimum payments on those add up to a pretty big amount. My issue is that they told me to stop paying about 1/2 of my credit cards to show the lender (Wells Fargo) that I am doing and will do anything i can to keep paying my mortgage (I've never missed a payment). I'm a little apprehensive about this step because this will completely destroy my credit score and is a pretty big step to take just on someone's advice. I truly cannot afford to pay the mortgage the way it is now and have been using funds from credit cards etc. to cover that amount, but in my opinion wouldn't showing my high credit card debt and how I've been using that money for bills and keeping any cash I earned or even taking out cash advances on cc's to pay the mortgage have the same effect? Without me having to stop paying the minimum payments and ruining my credit? Also from the little I've had time to read I get the sense that for the most part people get loan modifications after they are delinquent a few months, but these lawyers are telling me to keep paying the mortgage and stop paying the credit cards and I'm not sure that's the right step. If anyone has any ideas about this or any advice I would really appreciate it! Thank you in advance.

We're going through the same problem. I decided to stop paying my credit cards and when they became 60 days late, the creditors began calling. However, this time they slashed their interest rates. They closed the accounts (which were maxed out anyway) but they gave me very low rates (2% on some) and made the payments more affordable. Also, no late fees anymore. Even if you're late. They worked it out so that in 5 years the debt would be paid off. I know it's hard to stop paying, but it's really better to pay your mortgage then your credit cards. I think so anyway.
At the very least - even if this doesn't wind up being your best solution, you've at least gotten a better rate and a somewhat affordable payment.

Credit card debt did me in!

[brokemama]

Here's my story in a nutshell; stopped paying the cc's about 6 months ago. Three months later they were all willing to settle (I had banked the money I stopped paying them) and in the last 3 months all but 1 have settled for 20-50% of the balance owed . yes, it ruins the FICO but in the scheme of things, we are more than a number. Plus, that can be increased in the next 1-2 years quite easily, unlike a BK. On the totem pole, ccs are at the bottom, housing up on top . Yes, pay the mortgage first, food and utilities next. The cc companies deserve what they are getting for jacking up interest rates . Advulture (commonly known as Advanta) went from 7.99 to 32% overnight; no notice; one late payment. It was a pleasure to stop paying them. do your own debt settlement, you need no lawyer for that. Good luck! It's so nice to be out of cc debt and just concentrate on the house. And life is so much easier paying with cash or a debit card, leaving a store with a bag and knowing that no bill will follow..

[auroraproblem]

I should add that my above statement is in reference to a second mortgage. Would never stop paying on a first above any other debt.

A second mortgage though, I would. In our case, the second mortgage represented the highest balance, highest interest, and a 'technically' unsecured debt.

[brokemama]

Yes, I thought so, Aurora. Same here; I never stopped paying on the first even before it was modified, but used funds mostly from the HELOC. I am debating stopping paying them this month. It's 0% interest for 2 years which will revert next year to prime, but there is no equity in that lien whatsoever. I too consider it an unsecured debt and want to either settle or have it extinguished, just not sure which route to take at this point.