We applied for a construction loan with BB and T in 2006. The conditions of our approval were that we sell our current home, put at least an additional $100K down and modify 80% LTV.
It became obvious shortly after construction began that the market was shifting. We had both homes on the market and fortunately our previous home sold but for far less than we had anticipated. We did not have any additional money to put down on the house and didn't have 80% LTV.
We moved into the new construction house and it took over 1 year to modify the loan into a permanent loan. Jumbo rates were high and our payment would actually go up and we were already in a house that we couldn't afford. We have been in constant contact with BB and T since 2006 that this house is not affordable. We finally modified the construction loan and based on our situation they kept our loan "in house", no PMI, interest rate at 5.5 and to increase to 6 in January 2010 and extended the loan to 40 years. We made it clear that we did not think this was a permanent solution and one year later...we were correct.
We submitted a modification request to BB and T last week.
Here is our problem. I do not think they will modify our loan because we are not late. We are 200K underwater in this house (we live in Florida). We can't sell it and I don't know if it makes sense to keep it. I think it will only make sense to stay here if they will reduce our rate to 2%, 3% at the most. Even though we are not late, it is taking a financial toll to stay in this house. We stopped contributing to 401K, taken on credit card debt and just one major expense away from not making our house payment.
If we are denied the modification, we are seriously considering not making any more payments after December. We will ruin our perfect credit but then again, that is what got us in this mess in the first place. I think a modification is more likely once we become delinquent.
My hardship letter was in a nut shell, "we didn't meet your qualifications to buy this house in 2006 and we certainly don't now".
Has anyone had any experiences with BB and T with a modification?
Any advice in general???????