Downey Savings

ElkGroveHomes · 08-23-2008, 10:16 AM

I have a home that I refinanced about 3 years ago with a broker. It turned out to be a Downey Savings loan. The home was bought to help a young friend who wanted to be a foster parent. The minimum payment in January was about $1599 and the rent from the home was $1400.

In January, I contacted Downey Savings as I was hearing about a lot of people having bad loans. I did not really understand what type of loan I had as I had set it up on billpay and just had the payments coming out automatically. I contacted the friend and told him I would sell the property as I was afraid the loan would reset. He asked me to let him buy the home, so I referred him to a loan officer. Of course his family deterred him and told him to watch the market first and he never went through with it.

So, I contacted Downey Savings about modifying or short-selling the property. They refused to discuss it with me stating that they just service the loan and they have an agreement with the investors to 'neither refinance or modify the loan'. They also state that it is an federally backed loan. I have contacted them several times with the same question. They state I have no option but to pay the mortgage payments. The home has dropped approx $100K in value plus the negative amortization. The home is now worth 210K and I owe approx 350K. I even tried to hire a loan mod com who stated that Downey would not allow a modification on the loan and they bailed out of trying to force them.

My payment escalated to $3900 per month in June (which I did not know until I made my July payment). Of course this means that I am a negative 2500/mo plus garbage and water bills. My income on my regular job is approx $5200 / mo. My primary home mortgage is approx $3700 / mo. Needless to say, I am already struggling with my primary mortgage, credit card bills, children in college, etc. Technically, I quit paying my mortgage payment in July.

Does anyone have any ideas on how to get Downey to allow a modification and/or a reduction in the amount owed for the home?

Also, I asked my primary home (ASC/Wells Fargo) to modify their loan, but they refused on the basis that I can't afford my mortgage even if it is modified. They also refuse to refinance because I owe $80K more than the value of the home and they will only refinance 80% ltv. With the difficulty with these two homes, I am now destroying my credit and will have no hope to refinance soon.

This may seem stupid to ask for help as I actually work in the real estate industry, but can't even get my own to deal!

schwefls · 08-23-2008, 11:06 AM

Ho elkgrovehomes 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 and know that we are here for you.

Moe Bedard · 08-23-2008, 12:45 PM

Welcome to Loan Safe and thanks for sharing your all too common story. Many people in the mortgage and real estate industry are having problems because this is new area of the business and really it is nothing more than a game of poker to put it in reality for you.

They hold the cards right now and are betting on the fact that you will do whatever you can to protect that FICO and or home. A loan modification and a short sale is a privilege, they say and also a form of loss mitigation for the investor who holds the loan. Not really for you. In the contacts that govern servicers, it states in most case that the servicer can modify the loan only if the person is at risk of default or default is likely to happen.

It appears that they do not consider you a risk and are just saying whatever they can to differ questions and blame on the investor to shu you away as they are trained.

Downey is notoriously tough. I feel they are really "may" be insolvent and the reason the are not working withe people is because of write downs and fear of BK.???

Principle reductions are rare and you do not see them much, if ever.

ElkGroveHomes · 09-04-2008, 05:31 PM

Does anyone out there know who owns the loans being serviced by Downey Savings?

Any Possibilities would be welcomed !!

I am willing to hound them all !!

Moe Bedard · 09-04-2008, 06:20 PM

It wouldn't be just one investor..........so that would be difficult...........

Corporate Headquarters
Downey Savings and Loan Association, F.A.
3501 Jamboree Road
Newport Beach, CA 92660
(949) 854-3100

StuGoTs · 09-04-2008, 08:01 PM

Elk,

I'm about an 1.5. hour drive southwest of your location here in Cali, I feel your pain as my townhouse as gone from being worth $328k to $179k in less then a year and a half. I owe about $279k between both loans. The house has been refinanced once just to include Impounds, and I took about 4,100 out to pay off a car loan (stupid idea). Should would have been nice too to know about Non-Recourse and Recourse loans to because it looks like I'm going have to let a full-blown foreclosure process take place. It's one big sh*T sandwich and I'm going have to eat it all, before I can move on! Luckily, I'm current for Sept. by borrowing money from relatives but I'm praying to qualify for the New Housing bill (HR 3221) if my Lender: Litton Loans will take a loss and let me do it.

ElkGroveHomes · 09-04-2008, 10:10 PM

Please contact Linda Armes at the California Association of Mortgage Brokers Sacramento Chapter. She is looking into my loan for me. She may be able to find a loophole or bring pressure to bear to get them to allow a short sale or modification. I'm praying that she can help us both. Provide your loan number and mortgage company to her.

Ledeen · 02-06-2009, 06:22 AM

I also have an Option ARM with Downey that was sold to that group. Its actually Greenwich Capitol and the Master Servicer is Wells Fargo, but I did find out you can request the info on who owns the loan if you do it in writing via mail. They will write you back with a contact name and the name of the company who is the Master Servicer.

I suspect its just like mine, Greenwich Capitol is the investment company and Wells Fargo the master servicer.

I also have been told same thing, no loan modifications on these loans.

I also have read on many blogs that even the loan modification company's cannot get them done on these loans through Downey.

If your still in the home and want to try to do something, I would consider and attorney to sue for predatory lending and fraud.

My loan was a complete lie, and they put me into a loan that was over 70% of my income. Downey did no due diligence to verify the brokers claims.

Part of the agreement between Greenwich Capitol, Wells Fargo and Downey states the loan must meet certain criteria, part being that the homeowner can pay the loan, it has to meet certan criteria and Downey must do certain steps to verify this.

I beleive they can be made to buy back the loan based on the fact it doesnt meet the criteria.....

anyway, please update us on your situation, but I definately would get an attorney, even if you have to make payments to them. I beleive our only recourse is to sue them.

Ledeen