Help! Reaching out for Everyone and Anyone's Help and Advice!

[caroline]

Hi,

After reading everyone's posts for the last 2 hours, I decided I feel safe enough to actually admit my problems and ask for help (kind of like they do at AA--but not speaking from experience!) :-)

I just received a letter from Countrywide (today, May 9th), telling me that they are increasing our monthly payment by more than double for the payment due June 1, and yes, it is an option arm loan. We took it out in August of 2005 to pull some money out of our home to finance rental property. We actually went from a fixed loan, with high 700s FICO scores into an option arm, so we could cut our living expenses to support our real estate business. (Of course, the mortgage broker told us not to worry about the loan type because we had great FICO scores, more than 20% equity in our home (even after the new loan), and that we would be able to refi in three years.) However, who knew this is what it would be like three years later. . . Before you resign yourself to the fact that I am an idiot (which I will be the first to admit wholeheartedly that I made some very foolish mistakes, and was probably a bit naive and overly ambitious), let me explain. . . after the stock market crash, my husband and I decided that to be able to pay our kids college bills and have a secure retirement, we would invest in real estate with a local real estate network. So, I took the money we had left, out of the stock market, and bought our first rental in 2002. From 2002 to 2005, we ended up financing 10 properties, all with 5-20% down. All were cash flowing, and I set aside $50k for any monthly shortages due to vacancies, problems or emergencies. We did not spend one penny on anything that would be considered a "toy" and we haven't had a vacation in over 4 years. We've really tried to make our real estate business succeed, but because the real estate market has gone down so much, we now have an overall negative cash flow. Long story short, here we are, 2008--the reserve is gone, due to what is was for: vacancies, tenants not paying and many small emergencies. I think I can find a financial partner or someone to take over the properties, because I do have some equity left in a couple of them.

But the payment on our personal home is more than we can handle at the new amount. And I guess it has adjusted early because the letter said we have exceeded the maximum loan limit. We have three small children, and I am so scared, I don't know what to do. Do I call up HOPENOW for help, or should I call Countrywide first? Will Countrywide even be willing to help me knowing I have rental properties? I've read about the Bush plan that allows anyone who got an ARM loan from Jan 1, 2005 to Jul 31, 2007, who will get a reset between Jan 1, 2008 and July 31, 2008, and who hasn't missed a payment, may be eligible to have the interest rate frozen for five years. We fall into those time frames, and we've never been late on one of our mortgages (yet), but how does it work and is it really true? Does anyone have any experience getting their loan frozen under this plan, and with Countrywide? My husband is a firefighter, so we have a decent, steady income. We also have credit card debt , but I think we will be able to show up to $250 in excess income.

I would really appreciate anyone's advice so I can keep our home! I will also tolerate constructive criticism as long as it helps! I just need to know what to do next. Please help! Sincerely, a Really Extremely Nervous Nelly who is Sleepless in SoCal

[schwefls]

Hi Caroline welcome to our forum:

Please do not beat yourself up over decisions you made that at the time seemed good, we have all been there dun that. What you need to do is read the success stories and know that you can be one of them to with patience and perisistence. Shortly someone will be reaching out to you to get some additional info regarding your mortgage/financials. In the meantime han in there and know tat you are not alone, we are here for you.

[jennifer]

Good Morning Caroline
If are like me you keep checking every few minutes to see if there is a miracle answer and did not get much sleep ......
There is you will find hope and help here. NONE in this forum will ever think poorly of you and your decision. You are not a idiot as far as over ambitious will be using that quality.
Some one with much more knowledge will help you and lots of us will be here to support you.
You can and will get thru this. The stress of all this will be gone !!! You will find peace and serenity again !!! THIS I KNOW !!!
I am sending you hugs OOOOOOOO my grandpa sais if you give a hug you get a hug so go hug somebody you will feel better I promise you it works.

jennifer
LIFE IS LIKE THE BEACH !!!!!!!!!!!!!

Hi Caroline,

Welcome. As posted earlier, please do not be upset at yourself over this! Let's see what we can do to help you sort this out.

We know Countrywide is the lender. These other things will help me out.

• Balance when you started?
• Balance now, right before recast?
• Interest rate now? It's variable I know, but what was last months rate?
• What is the "Margin" on the loan? The margin is the "add-on" to the index which is the Monthly Treasure Average, LIBOR, etc. It may be on the letter you just received from Countrywide. For sure it on the Adjustable Rate Mortgage dicslosure in your loan docs.
• Is it a 360 month amortization or 480 month amort?
• Did the broker mislead you in any way and did he properly explain the loan?
• Where are you located?

As you know the terms of your loan require you to now pay prinicpal and interest on the recast loan balance. The interest rate is still variable, subject to change every month.

Any of the proposed rate freeze measures typically require the lender to freeze the rate, but you will still have to pay principal & Interest.

Countrywide does not want to OWN your house, that is for sure. And, being in the SoCal, your balance is probably pretty high, so Countrywide definitely has a need to work with you on this. As suggested, read the Countrywide thread and read the success stories. More importantly, move quickly, get educated, and take decisive action. This doubled payment will eat up money very quickly.

There are very likely some remedies available, but I need to know the answers to these questions. I'll be away from the forum until tonight, but Moe may jump in here to offer some advice. I will email him right now.

So, relax as best as you can at the moment. There are plenty of resources available here, let's get to work helping you out!

[Moe Bedard]

Hi Caroline,

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

If you feel that with the balance of your loan and if CW were to freeze your rate in the 5-6% range..........as Steve said, including the Principle, Interest, Taxes, and Insurance in your payment........if you are able to handle that comfortably..if you are able to answer yes to the question....then go for it.....

You do have to be honest while putting together the Household Income versus Expenses including the rental properties and you would need a surplus of at lease $100-$250.

For the Credit Card Debt you might want to try CCCS as they can help you with that........

To get started put your hardship into the body of an email and send it to each of the email addresses below........you should receive a response either Monday or Tuesday. Just make sure you have your loan number and contact information in the email too......

Good Luck........
Please keep us posted............

Also email hardship letter to each of these email addresses:
customer_service@countrywide.com
pressroom@countrywide.com
david_bigelow@countrywide.com
angelo_mozilo@countrywide.com
lisa_riordan@countrywide.com
elizabeth_moyer@countrywide.com
sarah_perek@countrywide.com
Sarah Perek
AVP, Investor Relations
818-225-3680 Office
chris_oltmann@countrywide.com
Chris Oltmann
SVP, Treasury Finance
818-225-3275 Office
818-324-4116 Cell

vice_president@whitehouse.gov
OCIP@do.treas.gov
service@naca.com

[caroline]

Wow, I am truly humbled and amazed. Thanks to all of you who have posted so far with so many kinds words and thoughts. You have already given me hope and succeeded in not making me feel like more of a fool. I really appreciate it and I'm ready to get down to work to become one of the success stories, if at all possible.

Steve, I will start gathering all the information you asked for, and ***, if my household expenses include my rentals--there is no way I will be able to show up to $250 in surplus. However, if I keep the rentals separate (which is how I always viewed it), I believe we can afford to stay in our home if I can work something out with Countrywide. On the other hand, two of the loans I have on my rentals are with Countrywide, so it probably won't be easy to convince them of that. Boy, if I do have to show my rentals as a personal expense I fear I must be really doomed. . .

[Moe Bedard]

Well...........the ones that are rented are income............and the ones that are not are an expense as you are paying the mortgages.........they do in most case pull credit........so they will see this.......

If you are current on them show them all as rented so you can at least have a chance of getting your primary residence modified........although I am not sure in this case...........I don't know how they will work out a modification with you, or what they will require for a modification...........

With the rental properties it doesn't seem that even a modification will help you..........

Answer Steve's questions and he might have some additional ideas for you as well........

Great Caroline!

There are some very experienced resources hanging around here, so why not take advantage of the "been there, done that" experience?

I'll check back in when you have some more info, it really is important.