I am new here...

[Kathy1234]

Hi Everyone! I have been reading this forum and REALLY, REALLY NEED YOUR ADVICE!!! asap. We are in a real quandry. We would like a mod or rate freeze but more than likely my husband will have to file chapter 7. Here are the facts:

In Dec 2006 we got an ARM with a 5.85 rate/interest only but it says 7.99 APR. For 2 years we pay $2047 per month until Feb 1st of 2009 when it goes to $2887 per month.....didn't know that until a month ago! When we got the loan, I thought we were getting a 2/28 I/O ARM but it changed when we got to the Office to a 5/1 I/O. They hurried us through and we signed away. When I got home I noticed the income was inflated also and an additional broker fee was added at the Office they said. The loan was full doc and we gave them copies of our income. The house is worth $530k (tax value) down from $548k. The loan is $420k.

At that time, the plan was to get me back to work (stay at home mom) and refi to a better rate. Well, in Jan 07 my daughter had unexplained breathing episodes that lasted months, she missed 30 days of school and it simply resolved itself in May 07. I was fatigued, had memory issues, brain fog and
gained a lot of weight. I couldn't really function to the point I sat in a chair fatigued. I finally went to the doctor in Dec 07 and found out my thyroid was off. I got the medicine in Jan 08 and am now feeling better but no job yet. But now, we are drowning in credit card debt and our ARM adjusts in Jan 09 with an increase of 40%. We got turned down for a refi this month with a less than 500 score on my husband and mine at 560 or so.

My husband has $26k in debt ($500/mo) that is delinquent and I have $11k ($300/mo)that is barely hanging in there, with only one that is 3 mos behind that I can work with hopefully. If we go for a loan modification, the $500/mo credit payment on my husbands cards is going to make us need more income to have that $200 left over in the income/expense worksheet. If we file chapter 7 on my husband soon, that will eliminate the $500 (which we are not paying) and make the income needs less. Should we file the Chapter 7 asap, wait for the discharge and then ask for a rate freeze or mod? Either way I have to get a job but if I make make more than $25k we will exceed the means test for family of 4 or make too much for mod but too little to survive the reset.

My husband grosses $65k, net per month is about $4285, mortgage now $2047, taxes are $320/mo, home insurance is $90 per month, credit cards w/out chapter 7 are $800/mo (only $300 if chpt 7 on husband), cable/internet/phone is $150/mo, cells are $100/mo (need for communication w/kids), Electric is $183 this month but varies, oil is $200/mo but varies, prescriptions $30/mo and we can play with gas, food amounts but don't they look at your statements? I have reduced the food and gas this month as much as possible.

We are current on the mortgage but are going to have to put ourselves behind on regular bills to pay our property tax bill due August 1st. We are frozen with fear. I don't know if we should file chapter 7 first on my husband to reduce the expenses on paper or try to get a mod/rate freeze first?????? SOMEBODY PLEASE HELP ME TO FIGURE THIS OUT? I am willing to go to work now that I feel better but I don't know how much money I should try to make to make everyone happy and still qualify for chpt 7 and a freeze/mod. I'm SO CONFUSED. HELP!!!!!

[Maurice Bedard]

Kathy,

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

We can not advise you on whether or not to file a BK.............for a modification if you are showing a deficit the lender will not be able to offer you a modification until you can show a surplus...........

If you would like to know what the best action to take for your situation you would need to consult with a bankruptcy attorney as they would be able to explain to you your options..........

[Kathy1234]

hank you for responding. Our servicer is Wilshire. Orig loan w/Mortg Lend
Network. Will lenders work out a mod if you file a chapt 7 and are current?
What about a rate freeze possibility? We have more than 3% equity but have low
credit score, ARM to reset in 1/09, denied a refi, current on mortg. Will a
lender give a rate freeze after a chpt 7, should we try before it? I am
desperate for info so I can see the steps to solve this............increase
income, chp7 for one of us to eliminate $500 in monthly expenses, modify or
freeze rate possible? In what order? Any info about what you've seen happen is
helpful. I know that you can only give info on what you have seen or heard and
are not advising us as a lawyer etc.....

[Kathy1234]

Why is there a thumbs down on my post? I am sorry if I'm phrasing things incorrectly but I'm so riddled with anxiety and fear and desperation that it's hard to pose the questions so that you can answer them. Please advise me any way you can. Has anyone done a chp7, then gotten a rate freeze or mod? Was it before during or after the discharge? We are facing an increase from $2047 to $2887 in Jan 09 with Wilshire but have a nefative on the income/expense. Do they actually add up everything on your statements? Wonder if you are making cuts that are not on your statement yet?

[RudyJay]

Hi Kathy1234.. nice to see a new member... the thumbs down you would have had to place it at the time you posted it .. Yes I know how it is to be anxious .. If you read some of the threads here , there are some members who were successful with filing chapter 7.and then applying for a loan mod. Depending on who the lender is there were members who worked toward their mods after discharge and some not. Just depends on the lender. As for the income vs expenses the surplus is important 100-250. You should read some of the success stories and other threads.. Maybe it will help.. Have you approached your lender regarding a loan mod? I guess you need to figure out if you want to keep your house or not.. hang in there...rj

[Maurice Bedard]

Kathy,

I am sorry that you are in this situation as it is a very difficult decision to make............
for the questions you are asking you would need to ask the lender if they will offer you a rate freeze.........the types of modification that they are able to offer come from the investors...........and they hinge on your income and expenses and every investor is different on what they will or won't do............so even if one member received it another member in the same situation might not..............

We have a member going through a modification with a Chapter 7 that was discharged and they had to reaffirm the debt to get any help with a modification and they are still in the process.........

You would need to contact Wilshire and start the process and see what they can offer you at this point..........they will tell you if your expenses are too high to do that...........

Also if the debt is credit cards you might want to consult with CCCS (Consumer Credit Counseling Services) to see if they can help to lower that debt in anyway without having to file a BK.........


Wilshire Loss Mitigation
1-888-952-7339

also send your hardship letter in the body of an email to:

wcc_hope@wcc.ml.com

[Kathy1234]

Thank you so much for caring and trying to give me answers...I am so grateful. The person that filed ch 7 had to reaffirm the debt....do you mean they had to reaffirm the mortgage loan? If we get the CCC and they lower payments does that make things better for a freeze or mod? Does a ch 7 of one spouse decrease the chances of getting the freeze or mod? What is the advantage of doing the CCC and having a payment to cover with more income?

[Kathy1234]

There is an exemption of homestead that you can take that lets you keep your house. Can you explain what that person is going through ....

[Kathy1234]

If I contact HOPE can they tell me how much more income I need to qualify for a freeze or mod with Wilshire? I figure I have to contact a BK atty (who I cannot afford but will shoot for a free consult) and HOPE. If I contact Wilshire will they tell me how much income I need to make something work and can you apply for a mod/freeze again after being denied?

[Maurice Bedard]

I don't know what thread you are referring to in your post above...........

If you are both on the mortgage and one files a Chapter 7 BK you will still have to wait for the discharge to try for a modification as everything is included in a Chapter 7 including the mortgage............if you consult with CCCS instead of filing a Chapter 7 BK the lender will see that you are working on your expenses and they do look favorably on that for a modification.....

I gave you the Loss Mitigation number to Wilshire............what you need to do is open a line of conversation with them and tell them that when the interest rate adjusts in Jan. you will not be able to afford your payments at that point and ask them what options the investor on your loan will allow.........each lender is different.........you can also ask them if the modifiation gets denied will you be able to reapply if your circumstances change...........they will tell you the reason for being denied............


If you feel that this is something that you can't handle on your own........then contact HOPE for help.........at 1-888-995-HOPE
they also are able to go over a budget with as are the folks at CCCS.

[Kathy1234]

Hi RudyJay....lots of feedback....thank you so much. We definitely want to try to keep our house. We bought it 20 years ago and raised our 16 yr old son and 11 yr old daughter here. It would devastate all of us if things went south. I need to get a job now that I am on thyroid meds and feel better. Just trying to position us to deal with the reset and chp7 of my husband. It seems to be all income/expenses so I'm scared that I will make too much and be stuck with a 40% mortgage increase for years or make too little and won't qualify for a freeze or mod before reset. The husband's bk would eliminate $500/mo from the income side needed.....if I can land a job after being home for so long. What happens if the rate resets.....how does that change the income/expense qualifiers? It's like a maze but I'm trying to get it down to step 1,2,3 etc because timing is everything at this point.

[Kathy1234]

Cat, I really want to thank you for your patiece and understanding as I am trying to make sense of it all. I am grateful to you and this forum because it's the only one I found with real info and it helps, believe me. It's just that it's so important it freezes you to inaction because you don't want to make a mistake. If the CCCS sees a negative cash flow can they suggest how much income you need to look good?

[Kathy1234]

When lenders etc have you fill out an expense worksheet is it the basics or will you have to include haircuts, home maintenance items, pet care, and all of the extraneous expenses that life requires? Does anyone have a form with the expenses they use to deduct from income?

[Maurice Bedard]

Kathy,

Just so you understand...........there is no magic formula that will automatically get you a rate freeze on a modification.........and nobody has the answer to that.........if we did we would be able to help everyone get modifications.........
This would be up to the investor on your loan and only Wilshire will know what that investor is looking for and if you are able to qualify for it..........all that CCCS can do is to help get that credit card debt down for your husband without hurting the credit like a BK will...........and also without having you have to wait until a discharge to try for a modification.............

HOPE works with the lenders to facilitate modifications and they also do the budget sheets with you so they can help you too..............what you need to do is to start calling tomorrow to get those options.............and then begin the process with whatever they ask you for...............before you have to file a BK.........at lease see if you may have options now...........it wouldn't hurt to try..........


There is a form to follow in the Homeowner Tool Box to the left of the forum.................just click on the link to see the sheet.........this should be able to guide you when filling one out............and the expenses like haircuts...........unless you get those every month you wouldn't have to include those...........

[RudyJay]

Kathy .. it takes all of us awhile to get through all the information in this forum.. CAT is great..and follow her recommendations. Like she says you should start talking to Wilshire. Then you maybe you will find the direction you need to move toward which appears to be keeping your house.. hang tough... rj

[Kathy1234]

OK, I am so scared but will call because I guess that's the answer. Please advise-- I Call Wilshire to say that our loan adjusts in Jan 09 and we can't afford it. We are current but have a negative income/expense right now but are working on a credit resolution and me getting a job to improve the income. What is available to us from our investor in terms of modification and rate freeze? If I get told we are not in a position to mod/freeze because of the income/expense, I ask how much is needed? Should I mention the possible chp 7 of one spouse and how that works with the mod/freeze? Can they take some kind of action against us with this info I give them even though we are current? I don't know what I'd do without you guys because I've been researching for weeks and thinking of all these scenarios 24/7. It's good to have objective people telling me......

[Maurice Bedard]

When you call you just tell them that your rate is adjusting upwards in Jan. and you want to see if you are able to obtain a rate freeze from the investor on your loan because at that point you will not be able to afford the adjustment.............
keep it simple and to the point.........

Let them tell you what they need to make that happen if it is possible on your loan.........

you don't need to go into any other info unless they ask you to provide the hardship letter and other paperwork...........

Also don't point out the obvious that you have a deficit..........let them ask you the questions regarding your income and expenses.........they will let you know what position you are in and what your options are..........

Don't tell a lender that you are going to file a Chapter 7 BK as that will include them and once you divulge that type of information whether it has happened or not...........they won't be very forthcoming on any type of workout.......

Make the call and update us on how it goes..........

[Kathy1234]

It's a good thing this forum is available......it's making me realize I have a lot to learn and how this works, what to say etc. I cannot express my gratitude enough, Cat.....I will do as you say and post the results.......thank you for the telephone number. I'm going to call and not email, right? It's sad.....I'm so business minded and have so much managerial experience before I stayed home with the kids and have run events as a volunteer but this situation has brought me to confusion and lack of know how until you set me straight, Cat. I needed someone to say the path to follow.....I'll call and do it as you say......pray for me, ok?

[elpjohnson]

Kathy...

Just remember we are all here for each other....I can tell you're scared and confused but you need to try to relax, stay focused and follow all of the instructions Cat gives you.....believe me she has helped so many members (almost all of them ) to modifications. So, she's a real expert (Moe too). Just do what they say and post your results.....You can do this!

I will definitely pray for you and your family.

Take care, good luck and God bless!

[Kathy1234]

Thank you elpjohnson...........I will pray for you too.

[evel1999]

This is hard on everyone in this situation. We have all been down this road of seeking a Loan Modification to save our home.

First, come up with a Income and Expense statement. Try to have a suplus of at least $150.00. You will need pay vouchers for proof of income. Look on this site and follow examples of Hardship Letter to request help with a Loan Modification because your rate and payment is adjusting and you cannot afford to make the payments. Fax and send by Certified mail all of this in a package to the Loss Mitigation Dept. You can talk to them on the phone, but if you do, also fax and mail all documents. You can ask them to lower your payment and rate. Some have been successful and obtained lower rate and payment. Some are only offering to freeze at the initial rate. It never hurts to ask for a lower rate and payment. They may not be able to do that, but it never hurts to ask. It is based upon what the investor will allow as far as modifications.

This is a long road, lots of work, lots of stress, but hopeful you will be successful and get a Loan Modification.

As far a bankruptcy, you would need to consult an attorney. Most offer free consult.

But, if and when you file bankruptcy, to keep your house you must not have any equity and your payments must stay current(even if they adjust very high). If you have equity, the Trustee will want that money and probably will force the sale of the home to pay off debts.

But, with the market and inflated appraisals done in the past, most of us have found ourself upside down on our home. Mostly husband and wife file a joint bankruptcy as both usually have debt that could be discharged to give you a fresh start. Only an attorney can advise on this matter.

But like Cat said, CCCS and Hope are available to help in these areas so please contact them asap.

[Kathy1234]

Could you please give me the CCCS telephone number? Thank you.

[Maurice Bedard]

Kathy,

What state are you in?

[Kathy1234]

I'm in Massachusetts. Sorry it's been awhile since I've replied. I've been trying to get an opinion/help from my husband(difficult) and all of the info for a budget. Plus I'm trying to learn Excel to re-enter the job market. I just got a card from Neighborhood Assistance Corp. Is this org bonafide? They are having a 5 day event in Wash DC. Can you tell me anything about them?

[angel83]

How much surplus is too much in a month? Any guidelines there?

[schwefls]

Hi angel:

They usually like to see 100-250 monthly, I wouldn't go to much higher than that, if you need to bury some $$ I am sure it could find it's way to your gas tank.

[frazzledma25]

Hi Kathy, sorry you are having a tough time....I just wanted to mention...I live in NH...I've visited a BK lawyer...some equity is protected under the homestead act...go to a couple of lawyers...have your questions written out....just from looking on line about Mass bankruptcy laws....it looks like there would be help for you and your family...I was explained that the federal guidelines apply but then each state will have other limits in place. Also, some of the credit card companies are also working out lower rates and payments to keep their customers current...so just calling them my also add some help....wishing you luck...

[Kathy1234]

Thanks, Frazzledma25..........is anyone going to that 5 day Neighborhood Assistance workout event in Wash DC? They say hundreds of counselors will be there and can work out deals that day. I'm wondering if using all of that gas$ would be worth a try? We cannot afford to stay there, just drive down and drive back....even that takes away from bills. It has stopped us from contacting our lender directly because maybe Hope or Neighborhood can get farther? Opinions please???!!! Stories?

[Kathy1234]

Hello Cat and everyone! I just attended an event at Gillette Stadium in Boston for homeowners in trouble sponsored by Federal Reserve Bank and Hope Now. We were able to talk face to face with a counselor and filled out the financial form. The counselor only required the financial form and two pay stubs. We got two minutes but the counselor was very nice. We just got out that we are current but struggling sacrificing credit cards and other basics to stay that way. We were asked if the property fell in value so I told her that it went from $548K to $530 so she wrote "property value down" and asked me what payment figure I was looking for. I was stunned because I thought they would tell me the options! I didn't want to say a low figure or the same figure.......so she said that she was our advocate and would lobby for what we wanted as long as we qualify....but made no mention of the qualifying factors. She said maybe a three year mod could be done if we qualify. I filled in the expenses/income showing a breakeven at $1700. My current payment is $2047. I was confused by this approach. It was so rushed and she will call me next week. What do you make of this approach from your experience? I told her our credit cards were the drain and she said to go to CCCs......what is their telephone number in MA? It was scary to make the first step with a crowd of hundreds of people and many lenders but CAT, do you think it will go faster because it was at one of the big events?

[Kathy1234]

I told her the payment adjusts upward 40% to 2887 from 2047 in 1/09 and absolutely no way could we afford it.

[Maurice Bedard]

Hi Kathy,


Hopefully it will go faster........it sounds good........but if they had alot of participants just try to stay in contact with the person who was helping you.

Here is the link to the CCCS in the tri state area by you........

CCCS Credit Counselors

Please keep us posted on how it all goes..........
Good Luck with the mod!!

[Kathy1234]

Thank you, Cat. (My daughter's nickname is Cat...short for Catherine!!). I woke up thinking why didn't the Hope counselor ask for a copy of the mortgage? She only wanted 2 pay stubs and the financial statement which asked for the loan number.....no bank statements or hardship letter.....the hardship was summed up in two categories of medical and unemployment but with no detail at all...just a checked box. In your experience, do Hope counselors have a direct access to your mortgage info via servicer/investor so they do not need anything except for the loan #? I have her name and tel#. She is in Oregon and the company is Wilshire on the address label.

[Kathy1234]

I WOULD BE HAPPY TO LET ANYONE KNOW ABOUT THE WILSHIRE FINANCIAL STATEMENT......just ask away. It would have lessened my anxiety if I had prior knowledge so please ask.....we're all in this together.

[Maurice Bedard]

Kathy,


Mine is too........ The HOPE counselor will only need the loan number.......they have a set of access numbers to the lenders that are just for their use so they will be able to get whatever info they need from Wilshire.

[Kathy1234]

Cat, thanks again. I don't know what I'd do without you in this forum. It helps so much and it's like a support group. I'll take your advice about the staying in contact. The counselor said she would call next week so if we do not hear from her on Friday, we'll start calling her. I'm hoping that HOPE has a new streamlined system in place but I'm prepared for the opposite also.

[Kathy1234]

Cat, I'm going to give a step by step progress on Wilshire because there is little on the forum about them. The counselor at the event said she would call us next week. Today, a Wilshire HOPE Team person called to thank us for attending the Gillette Stadium Hope event. She said that the paperwork is being flown back to OR and will be assigned to an Officer who will call. Is this a HOPE Negotiator who will do the mods request etc with Wilshire on our behalf?

[Maurice Bedard]

I am not sure about that one............they are most likely sending the file to the loss mitigation person at Wilshire that they will be working directly with.....

[Kathy1234]

The call from Wilshire's Home team after I attended the Gillette Stadium event was on 8/13 saying I'd hear from someone the following week. I haven't heard from anyone and it is now 8/28. We are going to call that contact person who called us, who is a different one than we talked to at the event. Cat, we have given them enough time to call us, right?

[Maurice Bedard]

Kathy,

This is more than enough time..........call that other number that they gave you and see if you can track down your info.............
Also put a call into Wilshire and email them on the situation too.........


Wilshire Loss Mitigation
1-888-952-7339


wcc_hope@wcc.ml.com

[Kathy1234]

Cat,

Called the person who called us and found out that the file was worked on on Aug 19th and they are looking for tax info. and someone is supposed to call us by the middle of next week or the following week. They gave us the names of people who are contacts. We were told we could call next week if we do not hear anything. I'm concerned about the tax info because we haven't paid the Aug 1st quarterly tax payment. We had difficult choices to make this month. What does this sound like to you? I'm not sure if this will work for or against us? Does any of this sound familiar?