Who pays?

[Shevablack]

How do I get the bank to pay a loan modification company?

[Dan Bailey]

Sheva,
Welcome to the forum and thanks for joining. ***, Moe or Andrew will be by shortly to answer your question I'm sure. Can you post more specifics of your situation, without posting the name of the company.

[Shevablack]

Well every one, loan modification company, that I spoke with wants to be paid. They want $1000-$1500. I know banks spend a lot of money foreclosing on people and a lot of money paying their own employees. I figure if a bank spends all this money, maybe $5000, $10000 or even more then there might be some way to convince them to pay the $1000 that loan modifiers want me to pay them directly. It seems like as win win for both of us.

It's just tough when someone is down on their luck, short of cash, to have to come up with more $ to pay a loan modifier.

I'm not close to foreclosure. I'm just researching the what ifs and such just in case.

[Dan Bailey]

Sheva....from what I have read here- the overwhelming majority of these "loan modification" companies are scams. Most here have either done it themselves or hired a REAL attorney.

[faith]

Originally Posted by Shevablack

Well every one, loan modification company, that I spoke with wants to be paid. They want $1000-$1500. I know banks spend a lot of money foreclosing on people and a lot of money paying their own employees. I figure if a bank spends all this money, maybe $5000, $10000 or even more then there might be some way to convince them to pay the $1000 that loan modifiers want me to pay them directly. It seems like as win win for both of us.

It's just tough when someone is down on their luck, short of cash, to have to come up with more $ to pay a loan modifier.

I'm not close to foreclosure. I'm just researching the what ifs and such just in case.

__________________________________________________ ______________

Sheba,
Good morning. You don't have to ask your bank to pay a loan modification company. You can do that yourself. All you need to do is to write a hardship letter to your lender, explain your situation why you are facing hardship and ask them for a loan modification. There's a hardship letter example on the left side, see homeowner tool box, it will give you at least an idea of how to write your hardship letter.

Most offer that companies mailed to us has only one purpose in mind: Fraud, Deception, and Steal from homeowners like you and me. So be careful, lenders don't work with loan modification company, they only work with the homeowners and the homeowner's attorney.

You can always check bbb search to verify if this company really exists and what their rating bbb gave them, you will be surprised to know that it only takes a "click" away to help you know if this company or any company really exists or not and how many complaints filed against them.

Good luck, hope everything will be fine.

God loves you and God bless you. Peace be with you.

If it sounds too good to be true, it probably is.

Faith

[Shevablack]

Thanks everyone.

[Moe Bedard]

Hi Shevablack,


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

If you do want to try to do this yourself please give some more info so that we can advise................

Who is the lender?
One loan or two?
What is the interest rate?
Is it fixed or adjustable?
Is it interest only or PITI?
Are you in default at this time?
Have you contacted the lender to start the modification process?

[Shevablack]

I was laid off about 8 months ago - I have about $100,000 in student loans. My wife works.

I'm really just getting the lay of the land, just in case.

Two loans on the house - one home equity, one mortgage - the home equity is about $8,000 the first is $105,000. Home value is $280,000, conservatively. The home equity adjusts with a cap. The home equity loan is at a low rate now. The first is at 5.25%. We also have about $8,000 in credit cards at 0% for another 6 months or so. The mortgage company for the first is GMAC. The home equity is with a smallish regional bank.

We're nervous because the calls aren't coming for the resumes I send out, she doesn't make a ton and unemployment isn't much either. I told my wife that a bank isn't going to foreclose on someone that has 60% plus equity in the house. If we had to we can use some 401k money to pay down the mortgage so we get into 70-80% equity. I can't see a bank wanting to foreclose on folks like us with 70-80% equity. The bank would spend more on foreclosing then they have in the house.

Any thoughts on the possible future strategy of paying the mortgage down from $105,000 to $60,000 and then working with the bank? Or keep the 401ks liquid and work with the bank proactively?

So like I said I'm just trying to figure things out.

Thanks.

[Moe Bedard]

You would need to get in touch with the lender to see what options you would have..the modifications are up to the investors on the loans.........I am not sure that they will be able to modify 5.25%........so you will have to call and see..........

GMAC
1-215-682-1000

also put your hardship letter into the body of an email along with your loan number and contact info and send it to the email address below:

javid.jaberi@gmacrescap.com (senior VP)


The fact that there is equity in the house is a good thing for the lender........paying down the principle to create even more equity with your 401k is not a good financial move.

[faith]

Originally Posted by Shevablack

I was laid off about 8 months ago - I have about $100,000 in student loans. My wife works.

I'm really just getting the lay of the land, just in case.

Two loans on the house - one home equity, one mortgage - the home equity is about $8,000 the first is $105,000. Home value is $280,000, conservatively. The home equity adjusts with a cap. The home equity loan is at a low rate now. The first is at 5.25%. We also have about $8,000 in credit cards at 0% for another 6 months or so. The mortgage company for the first is GMAC. The home equity is with a smallish regional bank.

We're nervous because the calls aren't coming for the resumes I send out, she doesn't make a ton and unemployment isn't much either. I told my wife that a bank isn't going to foreclose on someone that has 60% plus equity in the house. If we had to we can use some 401k money to pay down the mortgage so we get into 70-80% equity. I can't see a bank wanting to foreclose on folks like us with 70-80% equity. The bank would spend more on foreclosing then they have in the house.

Any thoughts on the possible future strategy of paying the mortgage down from $105,000 to $60,000 and then working with the bank? Or keep the 401ks liquid and work with the bank proactively?

So like I said I'm just trying to figure things out.

Thanks.

__________________________________________________ _____________

Shevablack,
It's NOT a good idea to use your 401K or your retirement money to use it to pay your monthly mortgage or your house. Putting good money into bad is not a good idea. If you use the money that is reserve for your retirement and then all of that money is gone, and your situation in finding a job remains the same, then what?

If you take your 401K and you're not 59 and 1/2 years old yet, do you know how much penalty you are freely giving to Uncle Sam - 10%, CA State- 3%, plus it will increase your tax rate. This is the money you worked hard for. I suggest that when you apply for a loan modification that you don't mention to your lender that you have 401K. Pensions, retirements and 401k are protected from any judgments.

Anti-alienation rule are disucussed in ERISA 206(d). Generally, civil suit judgments can't touch qualified retirement plan assets unless the civil judgment concerns a violation of fiduciary provisions of ERISA.

Several court cases on point. Guidry V Sheet Metal Workers Nat'l. Pension Fund, 493 US 365.


Hope this helps.

Faith

[faith]

[QUOTE=faith;31097]__________________________________________________ _____________

Shevablack,
It's NOT a good idea to use your 401K or your retirement money to use it to pay your monthly mortgage or your house. Putting good money into bad is not a good idea. If you use the money that is reserve for your retirement and then all of that money is gone, and your situation in finding a job remains the same, then what?

__________________________________________________ ______________

I forgot to tell you this:

We made a big mistake in doing that. We did that thinking the market will change, you know what happen to us, the 401k's gone, all the retirement money and savings were gone because we were trying to hold on to the house, hoping we could find a job but all in vain. We sold our house at a loss to avoid foreclosure and thanked God that CW approved the Short Sale and thanked God to loansafe.org, Moe, ***, Professor Shays and Andrew for the help they've provided to us .

So I hope you think it over and consider any other options.


Thanks,

Faith

[Shevablack]

Ya'll have more confidence in 401k's then I do. What I lost YTD so far would have more then covered the 10% penalty. Next year to stay even what return do I need? Don't put too much faith into the markets. What you got now, you got. What you don't have now you may never get. I think we're approaching a capital preservation era.

[faith]

Originally Posted by Shevablack

Ya'll have more confidence in 401k's then I do. What I lost YTD so far would have more then covered the 10% penalty. Next year to stay even what return do I need? Don't put too much faith into the markets. What you got now, you got. What you don't have now you may never get. I think we're approaching a capital preservation era.

Oops! I forgot that the 401K's are also a mess. When we took out ours it was in 2005-2006. With DOW now always up and down, it's better to take it out and put it at no risk cd or regular savings. At least you know for sure it's there when you need it. You're right with the loss now with DOW being low 200 points one day, and more the next day, it's best to take it out. By the time the market recovers, if they will ever recover, those 401k's may probably be not there and you are right those losses covers the 10% penalty.

It's up to you know, I was talking about the 401k's that I thought was still there and I've realized, oh no, take out that 401k and put it in a safe and not risky cd's. The decision is yours to make, I've given a conservative and not so conservative scenario. May God give you peace in making these decisions because I know it's very hard.

Peace be with you.

Faith