Not foreclosure quite yet.

[pfletcher]

So here goes a very long story. My husband and I bought our house 4 years ago. We were both doing ok. My husbands family business went down and he was left without any money and owing lots in personal and property taxes. It was concluded by all that the best course was for him to declare bankrupcy. During all this happening our variable interest rate kicked in. We have not been able to refinance our home because I don't make enough to do it on my own and with his bankrupcy he does not qualify. We have made sure to pay off any credit cards, have only one car loan and everything else goes to our home and daughter.

My concern is that we jus found out that I am pregnant again, I realistically don't think we can continue to afford an increasing home payment and day care for two. All we really want is to stay in our home and continue to pick up the pieces.

Would it be possible for us to even get a loan modification? 5 years is all I really need before my husband is discharged. Any ideas and help you can offer will be more than welcome.

[Dan Bailey]

pfletcher,
Welcome to the forum and thanks for joining! Cat, Moe or Andrew will be able to anser your specific questions when they pass through.

Who is your mortgage company?
Where is your home?
What are your details on the loan now (rates, value, etc...)?

Dont lose hope! Great things happen here! And you're not alone!

[pfletcher]

Our loan is with Litton, in McKinney TX. we have an 80-20. our 80 began at 7%and change and we are now at 9%. Our home has been valued at $195000 and the loan was originally for $180000. We have rarely been late in paying.

[Moe Bedard]

Welcome to Loan Safe!

If you are still in BK, Litton may not want to deal with you on the mortgage until the automatic stay is lifted on the BK. Your attorney will need to do this and or get a letter from the judge allowing the loan modification on the mortgage to happen.

I have seen Litton offer loan modifications at 4-5% for 30 years. Can you afford that rate on your current mortgage balance?

$1,046.80
Monthly principal & interest

[pfletcher]

Yes, all we really need is a little wiggle room. We have been fortunate to have affordable child care and are just trying to make sure that with the addition of another child we can continue to pay for our home. We also just want to get over the fear of what our interest rate will be the nest time it goes up. We have made a commitment to stay here long term.

[pfletcher]

What steps would we need to take to get a modification?

[Moe Bedard]

You are a perfect candidate. All you need to do is start the process and act ASAP. Here is some info I copied and pasted from before. I hope it helps!!!!

A loan modification generally occurs where the parties to a problem loan mutually agree to workout the problem by creating new and better loan terms. The hope is that the new loan will enable to the borrower to meet their obligations.

When applying for a loan modification, make a game plan on how exactly you are going to approach them. These people are trained in minimizing loss for their company and they get paid to by getting the most amount of money out of you as possible or declare that your case is un workable and foreclose on you. That is how they mitigate loss. If you understand this, then you'll know that you have to approach them and all conversations very carefully. Everything can and will be used against you.

Items You Will Need When Applying For a Loan Modification

Document income and expenses. Keep all correspondence (even the envelopes) Before negotiating a deal, gather all the information you need, starting with any correspondence from your lender. That includes anything that you have unopened from the lender. Don't throw away envelopes from the servicer -- postmarks sometimes can make the difference between being eligible or ineligible for relief.

Collect everything that relates to income and expenses. Find your last four pay stubs. They want to see at least one month of income. If your income is very sporadic, the support your story by showing how you're getting paid so we can calculate an average over time. Gather at least three years worth of W2s and tax returns, plus three to six months of bank statements. Find all the mortgage paperwork and add that to the file. Pull together all bills, paid or not, from the times you were falling behind on the house payments until now. Include utilities, auto payments, credit cards, student loans, child support, medical bills. Find the winter and summer heating and cooling bills.

You need to also include everything that documents why you fell behind. An employer's notification of reduced hours or a layoff, an invoice for an auto repair or a furnace replacement, a shutoff notice from a utility.

What to Do When You Call Your Lender:

Your lender has two platoons of employees who talk with delinquent borrowers. The first is the collections department, which consists of people who try to pry money out of you and get you current on the payments. The second group consists of the loss mitigation specialists. These departments go by different names, depending on the servicer, including foreclosure prevention, loan resolution and delinquency customer service. We'll use the most common name for the department: loss mitigation, or loss mit. It can be difficult to get through to the loss mitigation department if collection agents are discouraged from transferring calls. This is one of the benefits of having a helper, such as an attorney or a housing counselor. The first will intimidate bill collectors and the second might have contacts within the loss mit department.

The trick with any bank and getting a work out done is learning to navigate their phone system so as to increase your chances of getting a live person. Over the years Ive learned some tricks that help, sometimes you hear options that you know will lead to a person like when it says "to speak to a representative press ___" but sometimes they don't give you these options (cricket wireless is the worst at this) so you have to think, what options WOULD get a live person. For example often anything that involves new clients signing up will get a live representative...cause they always want new business. You have to be a little savvy though, you cant just tell the sales guy you called them so you could get a warm body to answer the phone!

Once you get a live person, you want to be working your way up to a decision maker. This is sometimes harder to do for a homeowner than a 3rd party. Often with the homeowner they get stonewalled at the first level, and sadly the first tier in Loss Mitigation is really a glorified collections department. They are paid hourly employee's who have very little if not zero motivation to go the extra mile and help you get some needed comfort and relief while resolving your problem. Often they just compound the problem by being rude and demanding, telling people things like "just pay your bills". So its essential that you get beyond these people and to a specialist.

Sometimes to get to this point you have to put up with the hourly employee's through a process of filling out their forms and information. Providing them with items such as pay stubs, tax returns and a whole host of financial information. Once everything is provided, then some lenders will assign the file to someone higher up in the loss mitigation department.

The MOST crucial element to this whole process is your Budget and if you have dome your due dillegence, you'll be ready . They will ask you for a detailed list of your monthly expenses. If its too tight, you may not get approved, if you have too much extra income you are going to have an outrageous payment plan. Don't agree to it!

[Moe Bedard]

here are some more links to help.

Hardship Letter
Sample Income & Expense Sheet
Essential Tips to Help You Get a Loan Modification
Lender Loss Mitigation Phone Numbers
Short Sale Tips

[pfletcher]

I see that many people had to send a QWR. Is this somethig I need to do as well? Also I am writting my hardship letter, do I have to wait for the permision letter from bakruptcy court to send it in? My atty says get the deal first then ask for the permision.

[Cat Damiano]

The QWR is used for servicing issues...........click on the link for info........

Free Foreclosure Help - Loan Modification - Mortgage Help

If you are still in BK the lender will require permission and your attorney would need to take care of that...............
For the hardship letter you would need to call the lender and see what your file is coded as................if it still has the BK code......then they will not talk with you about modification..........that is where your attorney would need to help.....................

But call to see if you are able to submit your items for the modification.....and what the status on your file is.........

Executive Resolution Team
Direct: 1-713-218-4592
Fax: 1-713-966-8852

[pfletcher]

Just make sure I am clear...
My account is in BK. Once I get the letter from the judge they would work with me? My husband wont be paid up with his bk for 4 years.

[Cat Damiano]

Since you are still in BK, Litton may not want to deal with you on the mortgage until the automatic stay is lifted on the BK. Your attorney will need to do this and or get a letter from the judge allowing the loan modification on the mortgage to happen.
You will have to contact Litton at the number that I gave you to see if they will work with you or only with the court.

[pfletcher]

Well I emaied our our attny last night asking for help wiht the BK letter and will call Littton on monday. Just to be ready I went ahead and wrote my hardship letter anyways. Would you mind giving me your opninion?

August 23rd
Litton Loan
Executive resolution team
XXXX
XXXX

For the past year and a half my husband and I have been experiencing financial dificulties, which in the near future may affect our being able to continue our on time payments.

First , my husband's business had to be shut down on December 22nd of 2006.In trying to keep the business afloat he had taken numerous pay cuts and in the end was responsible for paying all his own personal taxes (18%).The closing of the business caused him to file for chapter 11.

Second, our family has grown from just hima nd I to include a toddler and one on the way. Though neither was planned we welcome them both, but now fear the added cost of daycare.\

We have taken steps to improve our financial situation by paying off and not using credit cards, taking on a second job, cutting out all unnecessary expexpenses. Finally, my husband now works for a growing company and is up for promotion in October.

Please consider modifying our loan to a lower fixed rate. We love our home and have numerous ties to the community. We have made a commitment and are here long term.

We hope that you consider our request for a loan modification.

Sincerly

[Cat Damiano]

That is perfect...........short and to the point.........

Good Luck!!

[Moe Bedard]

I agree! Good job and make sure to be on top of your attorney to get this letter or to ask him to schedule a hearing so you can request the automatic stay to be lifted while you negotiate your loan modification.

[pfletcher]

Thanks. Will make sure I get that letter. Out Attny has always been very good at responding immidiatly.
Thanks for the support.

[pfletcher]

Well I spoke with Atty and he gave me the phone for the trustees office. I also spoke with them and now have the paper work on the way to request permision. So now at least I am on my way. I have already gotten all the stuff I need for Litton, pay stubs, expenses ext. As soon as I get that letter I will be on my way (hopefully)

[pfletcher]

Just an update on what's going on. I sent off the paper work to bk judge and am waiting for the permision letter. I also spoke with litton and they said no problem with the bk as long as I got the letter. They already faxed me the financial paperwork and I got it filled out. As soon as I get the letter off it goes.
Thank you so much for all the help so far!!

[Cat Damiano]

Thanks for the update............

Everything sounds good so far.............

Please keep us updated on your progress.........

[pfletcher]

So after a few set backs and other things that kept me from going forth with the loan modification I finally got the process strated and this is what has happened so far:
faxed in all paper work on 1/25
Called 1/27 nothing
Called 1/29 nothing
Called 02/02 and they said they did not have it faxed it again
Called 02/06 no one ever answered
Called 02/10 spoke with exec res. team and they said it was in the system but I needed to talk to BK team, Spoke with BK team and they said they could see it in the system but I needed to talk to their Atty, Spoke with Attorney and they said there was no record of my paperwork ever being sent or recieved. I faxed once again.
Is this much run arround normal? I am keeping a detailed log of all faxes as well as conversations just in case but it seems to me that there really isn't a system to process my paper work.