Defaulted on Loan Modification - Need Help

[youngbel]

I never, ever thought I would be writing this, but I need help.

I received a loan modification late last year from Litton on a 2/28 ARM, and I thought everything would be fine moving forward. However, I fell behind on the loan due to loss of income earlier this year (I am self employed and the economy has not been good this year). I had lined up new contracts/customers to replace the income and had worked out a payment plan with Litton to catch up based on that. Then we had the economy implode and the new contracts were put on hold or delayed. I do have some income coming in, I am actively seeking new work -- including permanent jobs -- and am confident I am going to replace the loss but right now I haven't been able to make the payment plan. Litton has served a formal notice of default and the legal clock is ticking. What do I do? Any advice/help? I have equity in the home, have owned it for 14 years, never was late until the 2/28 ARM. Don't want to sell, especially with today's credit market. Don't know if this is a factor or not, but even with the mod my payments are $600 higher than they were prior to the rate adjusted upwards.

[Moe Bedard]

Hi youngbel,

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

You would need to contact Litton and see what other options the investor on your loan would have.............try the ER Team and see if they are able to help..........

Executive Resolution Team
1-800-247-9727
Direct: 1-713-218-4592
Fax: 1-713-966-8852

[youngbel]

Hi ***:

Thanks for the message. I think I may have been in touch with the department last month, based on the phone number you've provided. Do you have any tips on what questions I should ask of them?

Thanks...

[Moe Bedard]

You would need to ask if the investor on your loan has any other options for you as far as modification goes.............it sounds as though you had a repayment/forbearance plan..............ask if you can apply for a modification instead.......just tell them that the elevated repayment amount is too high to handle and see what options they have.

[youngbel]

Thanks, this is helpful. My current loan is a modification from the original 2/28 ARM, but what I had set up earlier when I fell behind due to loss of income was indeed a repayment/forebearance plan. I post my findings after speaking with them.

[youngbel]

Hi ***:

Here is the update on what I have been told by Litton:

- Litton will only do one modification for the life of the loan
- As such, my only option is a repayment plan with elevated payments -- if I qualify.

Do you have any advice based on what I have learned?

[Moe Bedard]

If this is what the investors with Litton are doing..........unfortunately there isn't much that can be done to change this as the modification approvals are given by them.........

you might want to see if you can get help through NACA with their program..........

NACA

[youngbel]

Thanks for the message, ***. Basically I was told by the rep that Litton as a rule only will consider one loan modification for the life of the loan. It seemed not to have anything to do with the investor on the loan. I have been leaving messages with Litton for the better part of two months now and none of the mortgage reps ever return my calls. I just have to keep calling and calling until I get somebody live...and I get a different person each time, even though I supposedly have someone assigned to my account at this point, and each tells me something different each time. Then I get letters from them saying that I have failed to contact them to work out the situation, even though I have contacted them and they are the ones that do not call back. I will try NACA and see what happens. I will post my results.

[youngbel]

Hi ***:

I have some positive movement with Litton. With the all the developments going on in the mortgage industry such as Sheila Bair's loan mod plan and the FHA/Hope Alliance SMP program, I did hold off on contacting NACA and decided to petition Litton again. I've been doing that almost daily since October 22 but no one would return my calls. I even sent a fax with my requests. They didn't respond to that, not even to set up a repayment plan. So I decided to bypass the foreclosure department and look for other departments or people in the organization.

To make a long story short: I was able to reach someone in the Loss Mitigation area directly; I received a call from another rep based on an email I sent to Mr. Litton; AND Litton Loan will indeed consider another loan modification from me. The gentleman in Loss Mitigation was in the Portfolio Rentention Department. He was very helpful and told me what I needed to put together for them, where to fax it and that I would receive a call back within 48 hours of receipt of the fax to discuss. I discussed my financial situation and the drop in income and he was encouraging that Litton did indeed want to work with me, that they did not want another home, and that if indeed I had some sort of regular income coming in that there could be ways Litton could work with me -- that the big problem is when there is zero income. But he did say there are a variety of factors they must look at in evaluating a request. The gentleman assigned to work with me by Mr. Litton's office said to call him anytime if I need help or updates through the process. I am encouraged.

My question for you is if you have any advice on how to write such a hardship letter or presenting the case. I do have a regular base of monthly income coming in and based on my historical earnings I will be making more. This year has been my worst year ever since becoming self-employed in 1995. I know that I can present a case with the current income to do a loan mod that includes lowering the interest and possibly extends the terms, but I think there are other factors used as well to determine what is more viable to the investor: foreclosure or modification. If you have some insight on this that would be great.

Thanks for your help.

[Moe Bedard]

Thank you for the update..........I am so glad they are working with you.


click on the link for examples of how to put together a hardship letter.......
Examples of a Hardship Letter

[youngbel]

Hi ***:

Thanks for the help. I did indeed download the copy of the hardship letters and will use those to assist. Do you have any general advice on working with Litton based in the current climate? My original mod with them was what they call a "program modification," where they sent the offer to me rather than me approaching them. At that time, I was so stressed about just making my payment each month which had adjusted upwards by more than $1000 per month that I didn't really stop to think about trying to negotiate a better payment from them. Plus, my income was much higher then, so even if the modified payment was more than half my income and nearly $600 more than my original payment on the loan it was not too horrible. This time though my income is reduced, but I can't imagine it would stay at this level. Any tips?

[Moe Bedard]

Just make sure that you follow up with them for updates once you have your information in at least 2-3 times per week thruout the process.

[youngbel]

Hi ***:

Here's the latest info from Litton. I have received some conflicting info, so am wondering if you can either clarify this based on your knowledge or advise me on what I need to get from Litton.

I faxed my package of information to Core Loss Mitigation yesterday, and apprised my rep in Executive Dispute Resolution of this via a phone message. Orginally I had been told by Loss Mitigation that I would receive a call acknowleding receipt of faxed package within two business days. I called Loss Mitigation today to confirm receipt of the fax, and they told me it can take up to five days to process the papers and that they don't call within two business days of receipt of the papers. I have a sale date scheduled, so I asked about postponing that while papers are being reviewed. He said that as long as papers have been received and are in the system, I can call back to postpone the date and Litton will guarantee to postpone the date, as long as papers are in the system. However, I cannot call any earlier than 10 days prior to the sale date to request this, which is cutting things rather close. Does this make any sense to you? What experiences have you heard? I did call and leave a message for my rep in the Executive Dispute Resolution as well trying to clarify this.

[Moe Bedard]

I have seen servicers postpone dates right up until the day before........so that makes sense...........but wait to hear from them directly to confirm.

[youngbel]

Hi ***:

Thanks for the message. I will confirm this with my rep in Executive Dispute Resolution. The way it sounded from the rep in Loss Mitigation is that Litton would guarantee a postponement on a sale date for a mod/loss mitigation request in process, but no earlier than 10 days prior to the sale date, and I am just wondering if that really is true. Frankly, in the past I have generally received very differing and often conflicting information from Litton, depending on who I am talking to. It seems to get better though the farther up I go, and especially since I am dealing directly with Loss Mitigation and Executive Dispute Resolution. I didn't have very good results in getting my past due status of my loan resolved by dealing directly with the foreclosure department at all...no one really ever seemed to want to work with me, and no one ever returned my calls.

[youngbel]

Dear ***:

I am hoping for some additional input on how to handle this. My request for a modification has been with Litton for two plus months. I called them for an update today and they told me that the modification had been declined due to insufficient income. I am self employed with variable income so I asked them what figures they used. I had provided quite a bit of documention but I was not sure what they had arrived upon. although I had provide figures I felt were accurate. They told me, and the figures for expenses for which I am short are exactly at what my expenses are with my current loan, for which I had requested a modification. I am only a few hundred under that at current income. I don't understand it. My current loan is at 8 percent interest, and is $800 more than my original payment on my 2/28 loan, which was at 7.5 percent. If they lowered my interest rate to a more normal rate and added four years to the loan, I could make payments without the investor losing money. Are they basically telling me that all they will consider is a repayment plan? The whole thing seems not only odd to me, but does not make any business sense to me, either for the investor, LItton or myself. Can you enlighten me in any way? I had sent an email to Mr. Litton as well, and had a rep from the Executive Resolution Department assigned to this, who said of course they wanted to work with me, but it sure does not seem like it at all right now.