How do I get a loan modification with ASC

[mona31]

I have a loan with america servicing company. THe balance is $277,378.00. my interest rate recently jumped from 7.25% to 9.75% (mortgage went from 1675 to 2300 per month) because my 2 yr arm was up. THis is an interest only loan.This is not my primary residence. I bought this home as an investment property (hoping to make some quick cash, like most people). It has been rented out to help with the mortgage (but the rent only covers half of the mortgage) this does not include the taxes/insurance that I have to shell out additionally. I am so new at this, that I didn't prepare my self before I called the lender to get a modification. THey put me on the spot and starting asking for expenses/income right away. So I gave them what I could think of. They said I was at a surplus. I had them re enter the info, then they said I was in a deficit. So I did not get approved. THey said I could try again at a later time. What kind of figures are they looking for?? Here is my info
Income
8470 (not gross, this is after taxes)
$799 (rental income)
Total income
9269.00

Expenses
3604.00 (mortage of my residental home i live in)
2253.00 (Mortgage of the house I ham trying to get a mod on)
250 pge
groceries: $300
$160.00 DSL/TV cable
$400.00 for auto gas/maintenence
$300.00 baby expenses
$50.00 gym
Auto Insurance: 133
165.99 home insurance
320.88 property tax (on home I am asking for Modification)
550.00 property tax (oh home I live in)
$300.00 other bills/misc

Total: 8,786.87

Surplus of: $482.13

Question: is this too much of a surplus? Should I Show more expenses? The lender told me I have to either show a little surplus or a little deficit. Not sure what that means. I am so confused.

Mona31

[schwefls]

Welcome to our forum Mona31:

Generally speaking lenders only want to to see a surplus of 100.00-250.00 each month. I am sure you can do something with the groceries and gas if you know what I mean

[mar639]

Welcome to the board.
Ok from what I see from your expenses , I was in your same postion. Now the lenders want to see a surplus between $100 - $250. What you can do is : call Asc and ask to re- submit your financial information and add a little extra maybe to your groceries, gas bill . You can add your cell phone too.
try to fit in the surplus amount listed above. You should be pre- qualified by Asc.
Let us know what asc will tell you.

[mona31]

I need some honest advice here.
My husband and I have a investment home that had decreased in market value substantially. Since this is an investment property and not our primary home, we are wondering if we will not get a modification based on the fact that it is a investment property and not a primary residence.

We bought the house in December 2005 for $359.000
initially we had a 80/20 loan on it interest only .
277,000 (7.25% 2 year )on the first loan and 82,000 on the second loan.

Later on we decided to refinance our Primary residence (the home we live in..which had alot of equity built in it). So refinanced it, took out 82,000 and killed off the second loan of the investment home.

Then ofcourse the markets fell and our investment house is probably only worth about 200,000. now. and we have a 277,000 interest only loan that has now shot up to 8.25%.
My husband just wants to walk away, but It hurts me too think that we put in 82,000 from our primary residence into this house, and not only that, to make it worse, we continued to make payments for over two years now on this investment property. It is rented out, but we are not breaking even. We are shelling out 820.00 a month of our own money on an investment that is in the pits. I calculated the numbers and so for we have already put in about 120,000 dollars into this investment property!!! I know you must think we are stupid and crazy to keep puting 820.00 a month into a investment that is going nowhere, but I dont know what to do. I dont want to forclose and ruin out credit. we are willing to stick it out with this property if we can just break even with the mortgage and the rent. I cant raise the rent anymore. The only option is to see if ASC will lower our interest rate. However, I would need it to be lower that what we even intially had it oat (7.25%). Have you ever seen ASC modify a loan at an interest rate lower that what the orginial interest rate was??

This home is in the Central valley area of California, the hardest hit area. I dont foresee the value of our home going up soon. Like I said, we bought it for 359,000. we owe 277,000 on it. it is worth about 200.00 now. What are the chances of this house going over 359.000 aagain???? and how long will it take???
When I Think about this, I think that maybe it is better to walk away.

Help!!

[Moe Bedard]

Mona,

You submitted for a modification on this property almost 6 months ago back in May and didn't get approved and then were going to resubmit financials........did you do that............what did ASC say at that time?

[mona31]

too be honest, I tried with them twice back then and just got so nervous and scared when they told me I had too much of a surplus then the second time told me I had too much of a deficit. I want to call them again, but i dont want to mess up this time. can you help me with the math. when adding expenses, do they want us to put the initial morgage we used to pay or the new adjusted one. for example, when we bought the house the mortgage was 1675 a month (7.25%) now it is adjusted to 2022 (8.75%). Interest only. Do I put the 1675 in my calculation or the 2022. I could have sworn when I talked to one of the reps at asc they told me that the lender wants to see that I can afford the initial rate.
another question. if I show I am in a deficit by 100-250, will they consider lowering even the intial rate (7.25%)??
Mona
Mona

[Moe Bedard]

What you would need to do is to go over the financials with someone from ASC..........some investors calculate off of gross, some do net........some only calculate a certain amount of credit card debt and some don't use it at all............in order to get the best picture of what they are looking for, they should be able to let you know what they look at...........and you would need to use the current payment amount as this is part of your expenses.