PHH (Cendant) 1st, Beneficial 2nd, any chances?

[Airmech]

The story begins with a relocation due to the volatility with the aerospace industry. Anyhow...After we sold a house and moved we purchased our home in April 2006. The housing prices in the area we were looking were high compared to our previous home. The other odd thing was that although our new location (Georgia Coast) had significantly higher home prices, the FHA views the area as low cost with lower FHA Limits. Go Figure.

We finally find a home, and were approved through PHH Mortgage for a loan. We could not go FHA because the FHA limit at the time was too low. House purchase at 270K with NO PMI (Rate Increase). We are at 7.75%, We actually purchased the house with good equity, and were concerned about loan terms, but fell for the "just get in the house and refinance later". Seemed fair enough, after all we were buying before the "housing bubble" popped.

House payments high, but manageable. Fast Forward to Dec 2006....Still had significant debt due to pay cuts and such in the past, as well as repairs to the home we now affectionately refer to as the "money pit". We answered a solicitation from Beneficial for a 2nd Mortgage (equity loan). 54K or so at 12.24%. I Know, crazy, but we were going to re-finance in 6 months or so after we had the 12 month seasoning with our first loan. You know the drill "You can't look at the term or the interest rate because you will probably keep this less than a year". As the Real Estate martket started to slow, we really couldn't do any better rate wise, and now it is to the point of can't refinance due to the LTV ratios.

I know I should not have counted on the market staying strong, and refinancing into a better loan, but things had been so strong for so long I figured we may as well take advantage of the opportunity. The other thing I did not count on was the cost of Gas, Food, Clothing, Electricity, etc. to just about double since we bought our home. With the clarity of hindsight, I sure would have done things different. I have taken from 401K, sold vehicles, and bought necessities on credit to make ends meet, and have finally come to the conclusion that we need more drastic changes. With yet another Escrow shortage, our payment is 200.00 higher since closing.

With payments close to 3k, and the fact that I can not refinance I need to come up with something. We can rent a comparable house for less than half of our payment. I don't want to lose or walk away from my home, but I am out of ideas. When I found this website and looked at the loan mods, they seemed to make sense, but it looks as though the 2nd Mortgage holders seldom perform mods. Maybe a short sale to the 2nd mortgage holder? I'm pretty certain we could sell and cover the 1st fairly easily...

The new rescue bill doesn't seem like it will help much either.

Thanks in advance to all who take the time to read this. I'm sure not proud of this situation, but need to find a way out...

[Airmech]

By the way, everything is current, never late in 16 years of making house payments....

[schwefls]

Hi airmech welcome to our forum:

I wanted to stop in say hello and assure you, you are not alone. Shortly someone will be reaching out to you with some sound advice/suggestions in the interim please hang in there.

[Moe Bedard]

Hi Airmech,


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

Since you have two lenders you would need to contact both to see what options are available to you...........short sales are given on a hardship basis........since you have never been in default that could present a issue......but you would need to call and discuss the options....here is the contact info to get you started..........

Please keep us posted on your progress.........


PHH Mortgage
1 (800) 257-0460
For borrowers facing possible delinquency
1 (800) 330-0423


Beneficial
1 (800) 333-5848

[Airmech]

Here's the update....

Contacted PHH and Beneficial at the numbers given on 08/11/08.

PHH sent a package (showed up today 08/25/08) and wanted a lot of info as well as a hardship letter, and "proof of hardship".

Beneficial took information over the phone, and requested W-2's and pay stubs to be faxed. This was done 08/12/08. I spoke with them today (08/28/08) and they said everything was still being reviewed, but said the should have more info by 08/28/08... We'll see... They only look at 6 month modifications. One thing to note is that they did not send a package, and only requested info over the phone as far as a budget is concerned. I think I ball parked everything fairly close.

With the clarity of hindsight, I would have had budget info in front of me prior to calling. So...all be cautioned to have a carefully planned budget in front of you that you can refer to while answering their questions (don't forget the surplus that everyone talks about). For me, I'll just have to see how it goes.

A quick question...
While on the phone with Beneficial, I asked if anything is reported to the credit bureaus about the modification. He stated that the account would probably show in forbearance. Assuming you have no 30 day lates showing up, does anyone have any idea what impact this has on your credit?

Thanks All!!

[Moe Bedard]

If you are not in default, a modification will not result in negative credit reporting................but be clear on what Beneficial is trying to do with you.............if they are offering partial payments for 6 months then adding the difference that is left on top of the current payment at the end of 6 months, then that will be reporting as late through the process...........
If they are reducing the rate instead for the 6 month period, then that should not be reported negatively if you make the payments on time. So just be really clear of what they are proposing..........

[Airmech]

Hi ***,

Thanks for the quick reply...

I'll be certain to carefully look over anything they give us.

I faxed all 32 pages over to PHH. They state that they have a 30 day turn-around. I guess we'll just wait and see though...

It seems like we got stuck with 2 companies that will only do a temporary mod.

I don't see much changing in the next 6 months, but we'll keep our fingers crossed.

Thanks again!!

[Airmech]

Here's the Update...

Beneficial (HSBC) has offered a modification that reduces payments 70.00 for 6 months. With no late payments this offer would be extended for 24 months. This was done through an interest rate reduction.

PHH Mortgage is still looking at the paperwork submitted. However they did state that they DO NOT reduce interest rates or payments in any way. Their programs all revolve around increasing your payment by adding any lates in and re-amortizing the loan. Plus, you have to be late before any of theior programs would become available. What a Crock....If I'm going to be late, then there goes my chances of a refi or purchase of another home if this one is sold. If I have to be late, why not just walk away? This would put 10K in the bank, and maybe provide enough cash for settlement with the 2nd. Why be stuck with an unaffordable home that I would not be able to refi anyway? These Mortgage companies are killing themselves!!

My particular situation is due to loan products disappearing, and the cost of everyday living going up. My house was not unaffordable when we purchased 2 1/2 years ago, but it is now. I have been making payments, and have borrowed from 401K (I know...I shouldn't touch this) to keep things current.

Unfortunately none of the rescue products will help me. Who in the heck came up with the no 2nd mortgage clause anyway? It seems to me that there are a lot of folks out there with 2nd's. I guess this is just another way to disguise a big business bailout.

Why is it that I can purchase another home (if this one is sold), with no down payment or equity, but I can not refi my own house. This makes absolutely no sense to me. The Broker that I sat down and spoke with is shaking his head these days as well.

We should probably try to sell, but the market is so slow, I think it would take quite some time, and we are coming up on the slow (slower) season. It's frustrating things like this that make me just want to "send them the keys".

Anyhow, I'm meeting with a Real Estate Attorney to discuss the "what-ifs" in this process tomorrow. I'll respond back with their input, and maybe help out some folks facing this same crisis in Georgia.

If you got this far...thanks for reading through the venting above...

[butacska]

Hello, I was curious how this progress ended.
Airmech, if you read this would you please give us an update? I have 1st and 2nd with PHH Cendant and all I read is horror stories. I am trying to find somebody who was successful with them to give me some hope.
Thanks,
Marie

[ShinesLikeJustice]

I am interested in an update as well. My mortgage is serviced by PHH and I have been attempting a mod since January 09. I'm currently working with Acorn Housing who submitted another loan mod request on my behalf on 5/27/09.

I have never heard of a PHH success story