Very Unique Story... Need Advice Badly

[ysherriff]

Hello,

I am a new member and I live in Texas. I have a very unique story and need help very badly. Here it goes.

In May of 2004, we purchased our home for $137,000. In August of 2007, we made a principal reduction of $50,000 towards our note. The current value of the house is $160,000. Our monthly payment was $1307 including escrow and insurance. This is an FHA loan.

I recently in May lost my banking job earning $80,000 a year. Due to family legal issues, we depleted most of our savings including 401k. We could not qualify for refinance under company guidelines because we were delinquent within a 12 month period. Our credit was shot due to legal issues so we could not get refinance from a third party lender.

My wife was a stay at home mother and had to secure employment. She currently is employed making $30,000 a year. I was unemployed until recently. The job market is rather tough even with my experience and I wanted to secure any type of employement. I am working making $20,000 a year. So combined we are making $50,000 annually.

I want to do a loan modification so they can lower our monthly payment. The name of the company is Universal Mortgage Company located in Wisconsin.

My current payment of $1307 is based on the original $137,000 note amortized over 30 years not the current principal balance of $87,000. Here are my questions:

1. Do you think the bank will modify my note and readjust the amortization so my payment can be lowered.
2. I have over 60K worth in equity, what are my options?
3. Do you think I should tell the bank I am working also? We have no other installment or revolving debt apart from student loans. I did the debt/income ratio analysis based on her income and she has sufficient excess personal cashflow to service the debt on her own. I do not want to show my income if all they would do is give me a forebearance.

Please let me know your thoughts.

[Moe Bedard]

Hi ysherriff,


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

Do you think your wife might be able to qualify with the new guidelines for FHA going into effect on October 1st.?

Here they are.........

FACT SHEET: FHA TO PROVIDE ADDITIONAL MORTGAGE ASSISTANCE TO STRUGGLING HOMEOWNERS

[ysherriff]

Thanks for your reply. This is their qualification and I will answer it point by point.

FHA New Qualifications

Their mortgage must have originated on or before January 1, 2008;

• Our Mortgage Originated 5/2004

Their mortgage debt-to-income must be at least 31 percent;

• It depends. Based on our current payment of $1307, debt-to-income is insufficient. If based on $87,000 note, it will be more than sufficient.

They cannot afford their current loan;

• She currently can not afford the mortgage payment as it stands now based on $137,000 note. If they reamortized the current principal balance of $87,000, she can afford it with her salary alone

They did not intentionally miss mortgage payments; and

• No we have not

They do not own second homes.

• No second home. We are not rich.

[Moe Bedard]

It looks like she might qualify but it comes out October 1st............

So the payment currently is not taking up more than 31% of the income?

Who is the lender on the note?

[ysherriff]

***,

Thanks for the link. It was informative. I want to know if I should disclose that I currently secure a job. It is not making near what I was making but it shows additional income. I just don't want it to hurt my chances of a loan modificaiton.

[ysherriff]

The lender is Universal Mortgage Corporation. The current payment is taking up 31% of income or more with her income alone. She takes in $2,000 net income. The current payment is $1307 but this is based on $137,000 original note not the current $87,000 note

[Moe Bedard]

on your question about the job and modification............the issue is that we have not seen the lenders modifying fixed FHA rates..............so what you might want to ask for at this time is a modification reamortizing the balance left and see if that can be done..........

For a modification they will ask for all household income versus household expenses on the financials............so you will have to go after that with UMC to see what criteria the require.

[ysherriff]

***,

Thanks. Then what is an FHA Loan Modification for? Aren't most FHA loans fixed loans?

Greatly appreciate your responses so far.

[Moe Bedard]

What FHA normally offers for "modifications" are forbearance/repayment plans, and partial claims when someone is in default to catch up...........but we have not seen them modify the rates themselves because they are so low and they are not adjustable..........same with VA........on the government backed loans because most of the rates are lower than the current refi rates, they have not lowered them.........whether they will at some point is anyones guess............

[ysherriff]

I have read on FHA website that modification includes extension of term or reduction of interest rate. I guess if I already have a 30 year mortgage they can not extend it but if I want my loan lowered, they will have to reamortize it.

S**t. I guess I need to fill out the paperwork and see if they will reamortize the loan via a loan modification.

Thanks

[ysherriff]

To Whom It May Concern:

We are writing this letter to explain our unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home and we would really appreciate the opportunity to do that.

The main reason that caused us to be late is because the primary breadwinner, Yuhanna Sherriff, has lost his job in May. His wife, Yotaunda was a stay at home mother. Soon after being late and with minimal savings, we had fallen further and further behind. Now, it’s to the point where we cannot afford to pay what is owed to Universal Mortgage Corporation. It is our full intention to pay what we owe. But at this time we have exhausted all of our income and resources so we are turning to you for help.

Our situation has got better because Yotaunda Sherriff currently works and earns $30,000 a year and Yuhanna Sherriff has secured a job earning $20,000 a year and we feel that a loan modification would benefit us both.
In August of 2007, we made a principal reduction of $50,000 towards our balance. Our current balance is only $87,000. We would appreciate it if you can work with us to modify our note so our monthly payment can be lower so we can keep our home and also afford to make amends with your firm.

We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on.
Sincerely and Respectfully,

[Moe Bedard]

Looks good............

Please keep us posted on your progess........