Indy Bank - loan mod or file for predatory lending practices claim -help!

[distressed daughter]

My parents, Spanish-speaking only, were swindled by a mortage broker in August 2007. The broker took 5,500 and left my parents with a interest only loan (7%) for five years; in 2012 it will jump to 12% for another 5 years (interest payment only); then the loan will go to a variable rate (interest and principal) for the next 20 years. The loan has a pre-payment fee (6 months of interest).

My parents only get a combined total of $1544 from social security. The loan was approved without verifying their income. On their behalf, I have filed a formal complaint against the broker and called Indy Bank to find out why they did not verify income prior to approving the above loan. I told them that I was also going to report them for taking advantage of senior citizens on a fixed income.

My parent's are not delinquent on their loan. They are on a tight budget and make every payment. I am know overseeing this and have full authority to make decisions on their behalf. For a fact, I know that when their loan adjusts, they will be in trouble. I send them money every month and that is why they haven't sunk.


After reading all the posts on this site, I am thinking that applying for a home modification is the best solution at this time. I am working out their budget and have already typed out a hardship letter (used examples found on this site). The Indy Bank representative stated that we may want to consider waiting until October or until they can't make their payment. I don't think this is wise but would like to hear another perspective.

Will we have difficulties getting a loan modification if not delinquent?
If they have at least 250 dollars left a month after all expenses, I will not show my "gift-aid" on their budget BUT if they do not have this left over, should I include what I send them per month or just reduce their expenses?
Should I try to re-finance and be a co-signer?
Should I go after a loan modification or follow the "predatory lending practices" claim as a means to get reasonable loan terms?
Are there other options that I am missing?

Thank you in advance for any words of wisdom you can share.

[Moe Bedard]

Hi distressed daughter,


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

Give this a try first with the advice I give here on the forum..........you can do this yourself............in light of the FDIC taking over IndyMac they have been accellerating the modification processing so try to get this going as soon as you can............

Take the hardship letter that you wrote and put it into the body of an email and send it to each of the email addresses below along with the loan number and contact info........once you receive the contact then they will let you know what they need for a modification from your parents........

frank.sillman@imb.com
drew.buccino@imb.com
eric.friedman@imb.com
mitch.oringer@imb.com

Hope this helps get you started.........
Please keep us posted on your progress.......

[distressed daughter]

Thank you for responding so quickly. I used one of the examples on the forum to create the hardship letter and then added what I thought was relevant to my parents situation. What do you think?

To Indy Bank:
We are writing this letter to explain the extreme hardship it will be for us when our loan adjusts from a 7.00% interest only rate to a 12.00% interest only rate in September 2012; thereafter, to a variable rate.

The first change will bring up our payment by approximately $90.63 per month on top of our 845.83 payment (not including impounds or the loan principal). A monthly increase of this amount will ruin us financially and we will surely fall into foreclosure; as senior citizens, receiving only social security benefits, we are fearful of this possibility. Therefore, we are requesting that our adjustable interest only loan be modified, without pre-payment penalties, to a fully amortized, fixed rate loan at the rate of 4.50% for thirty-years. This will reduce our monthly payment to approximately 751 dollars, an amount that is reasonable in light of our financial standing and it is the original loan payment before being victimized.

We tried to refinance out of this loan but cannot due to the fact that we are on a fixed income and we cannot get the value on the property that we need in order to refinance. In August 2007 we were swindled by a mortgage broker that resulted in a loan with your bank. We learned about the Indy Bank loan parameters when our documents were reviewed for our living trust.

To date we have made all of our mortgage payments on time and will continue to make all payments in full and on time. We are trying to be proactive because we want to preserve our good credit rating (FICO score: 725) as well as our most important and only asset, our home.

We are FULLY authorizing our daughter, ......, to handle this matter on our behalf since we are Spanish-speaking only. We are willing to provide you with verification of our social security benefits and our monthly budget.

We appreciate your time and consideration in this matter.

[distressed daughter]

I will also add my parents name, loan number, and my contact information at the end of the letter.

[Moe Bedard]

That looks really good..............but I would also add to where you said about your parents being Spanish speaking that the language barrier was a big factor in them not fully understanding the loan terms that were given to them too...........

Please keep us posted on how it goes..........