2 Mortgages with Wells Fargo - Mod on 1?

[strider]

I've just started contacting wells fargo and they first mentioned repayment plans but I don't have the available funds for the repayment. Loan mitigation also received our hardship letter as well as expense/income sheet we made along with my paystubs. I just sent it out and will follow up in a few days. I'm wondering what all my options are. Here is my situation:

We purchased a home in CA in 1999 and have refinanced it at least twice since then to either pull equity out or get a lower interest rate. The current mortgage on the home is roughly $2225/mo. Summer of 2007 we moved out and stayed with family while we rented the home out so we could use the rental income of $1500/mo. to pay off bills. In Feb 2008 my job relocated me cross country and in doing so we purchased another home with a $1500/mo. mortgage. Due to various expenses (moving costs, medical bills, major repairs to the home we moved to, etc.) we are no longer able to keep up with the $725/mo. difference needed to cover the rental property in CA. The home in CA has a loan of $295 but has a market value of around $200k. The home we're living in has a loan of $185k and has a market value of around $270k. If we sold the home in CA we would probably only get about $200k leaving us close to $100k negative. If the negative balance was transferred to our new home, we still wouldn't be able to cover the new mortgage since we will lose the rental income from the home in CA. Any advice or ideas as to what will happen in my situation?

[Moe Bedard]

Hi strider,

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

The modifications given would be up to the investors on your loan....and your current financial state.....so each member would have a different outcome..............you would need to see what options are available on your loan from the investor.........when you contact Wells Fargo next week.

Wells Fargo Loss Mitigation
1-800-416-1472


Please keep us posted on your progress................

[strider]

I followed up with Wells and didn't get too much additional info. The person I spoke to said I don't qualify for repayment because my expenses are more than my income. She also said I probably wouldn't get approval for a loan mod for the same reason. I mentioned to her that I expect my hardship to be temporary and that in a few months we should be better. What she then suggested is to send in a new income/expense sheet once our income/expenses have gotten better...so basically she is saying I can't do anything until then. Is this really the case? She said not to make any mortgage payments unless I am able to pay it in full. The problem is if I make a full payment I was told it would cancel out my loan modification request!?!?! Any suggestions?

[Moe Bedard]

if you are able to, continue to make the full payment.............they are not supposed to be telling you not to make payments...........Wells Fargo is notorious for continuing the foreclosure process after missing payments..........so if you can..........make them.........
also on the income and expenses...........is there any expenses that you might be able to work on...........such as groceries, gas, and items like that..................if it could help you to start the mod now........

[strider]

I may be able to make a full payment but I know I will be short again. I've looked over my expenses and there is not much I can do. A lot of my expenses are from credit card bills. I did speak with a mortgage counselor today and after giving him a rundown on my expenses/income he recommended doing a short sale. As of now, the only reason I would like to hold on to the home is because of the idea that if I am able to hold on to it long enough so that I can sell it and break even, or even possibly making a profit. Unfortunately though, the market being the way it is and the fact that the home is in Stockton, CA...it would probably be many years before I can see breaking even on the home or even profiting on it. My concerns with a short sale are how it would effect my credit as well as tax. Also I'm worried if the lender could go after the home I'm living in. Any ideas?

[Moe Bedard]

If it is mostly credit card debt..............what about CCCS (Consumer Credit Counseling Services)...........they are a non profit that might be able to help you trim that debt and qualify that way.............

[strider]

I haven't thought about credit card counseling. Maybe my credit expenses aren't as much as I assessed. Basically I've kept up on everything but after my expenses and paying the minimums on my monthly bills I don't have enough to cover the mortgage payment. I have about $800/mo in credit card debt. The rest of the roughly $4500/mo in expenses is split between mortgages and living expenses (groceries, utilities, etc.) Would CCCS still be able to help me?

[strider]

I didn't want to start another thread but my question is:
Being that I'm upside down on what is now a rental property and it will probably be many years before the property is profitable and I can no longer float the difference of the rental income/mortgage payment - am I better off trying to do some sort of loan mod, or should I look at doing a short sale?

[Moe Bedard]

That is a decision that only you can make based on your current situation and whether or not you want to ride out the market conditions..........

As far as CCCS........they are a non profit, so it wouldn't hurt to at least call and see if they can help.........if you are paying $800 a month minimum in credit card debt...........that is too much.......they can help cut that down............if they were able to cut that in half, that saves you $400 right there.