Homecomings Financial - Please help

[Pandorah]

Hello. This is long, I apologize. We bought our house 2 years ago - we live in California - land of high cost everything. We bought our home for $317k, and financed 100% - that included everything, including closing costs.. (I am sure you can see where this is going). At the time we were looking for a bigger place for our family, and weren't able to find one to rent (we had 5 children, now have 6 - and another on the way due in June).. (we have 6 children 1 with special needs [well, really 2 but one is undiagnosed].. and with a family as large as ours there are not really other options and no where else to go.. 3 of our children are teenagers, 2 are 7 and 9 and a 9 month old baby) we looked into home ownership, we wanted more education on what we needed to do to make ourselves ready - to get a grasp on what we needed, etc. Well, welcome to the world of the loan sharks... and the sub prime market! My fiancee has some derogatory stuff (old medical collections) - and I had 2 things that are now gone (they were about to expire).. We found an all too eager realtor, who we actually liked who we thought was really in it for us.. and a mortgage broker he referred us to. We got into a 40 year mortgage with a fixed 2 year rate - with prepayment penalty, then an ARM for our 1st mortgage, (the second is fixed, but with a horrendous interest rate) with the assurance from all involved that it would be SO easy and NO problem to refinance before it EVER went adjustable! ANd we'll have such a better rate, what with our payments always being on time - who wouldn't want to refi us!? The mortgage broker and realtor were even so nice as to pay $3000 for us as the lender required we pay the property taxes before getting the house... which we didn't have, so we were going to have to back out - they paid this for us. As well as the realtor giving us $1600 cash back at closing. Now I see it for what it was, they needed their $ - I am not so sure how much they were actually trying to help us. Yeah well.... now the market has dropped - which doesn't concern us as much as everything else - we're now upside down on our loan but never planned to move - we really plan to stay in this home forever. Except, that we can not refinance it - a couple of reasons. 1. the value of similar homes in the area is about 40k+ less than we bought ours for... 2. the new lending standards... 3. We have a high debt to income ratio - but all payments are timely and current. 4. we have no savings for any closing costs or fees. We were notified by mail that we received a few days ago, our first mortgage is now being adjusted. When we were looking into refinancing we were told that most companies aren't actually adjusting the rates right now due to the foreclosure rates and new legislation... well no one told our company that.. Our payment is going up $180 per month... beginning in December (Merry Christmas!). And is then scheduled to increase again in June (when our baby is due). I now found out that they have paid our taxes, which we were behind on due to having a baby in January and our income being reduced due to being on disability.. we threw our tax $ to the bills rather than the taxes. Well, we haven't gotten official notice yet, but it's actually going up from $1606 to $2684 to cover the escrow for the taxes as well as our ARM. This is also to take effect in December. That is more than a thousand dollar increase, just in our first mortgage. The second is $655. (30 year fixed interest rate 11.99%). Homecomings has submitted a proposal to pay the escrow over 24 months instead of 12, which would make the payment on our first mortgage $2369.68 + the second, we don't know yet if that will be approved. I had thought about filing bankruptcy on my credit card debts in order to have more $ to go to the house, though I am guessing this will probably drive our rate up further - I admit I don't know how this works really. And in order to pay the mortgage I will be forced to do this, as the mortgage will be over $3k per month, our income is a little less than 5k per month, and we have two car payments and 6 children. I did contact Homecomings, they took some info from me and said they'd see IF they can help... they will 'notify us in 30 days'... well nice. Thanks! We're struggling but making our current payments... our mortgage was already nearly half of our income! Yeesh. We have struggled for a couple of months now, and we have been told before that they will not help us unless we are delinquent (nice!)... we had to repair our broken AC this summer $800, and this month our hot water heater broke, another repair. We've wiped out the little savings we had... and I fear that this IS the month where we will become delinquent.... I just don't know if we should pay the 1st or 2nd mortgage... I can only pay one - I simply don't have both. I have contaced the HOPE program, but am having trouble getting through due to so many people calling - I am waiting for them to call me back in 24-48 hours. I had also contacted NACA re: their home save? program... i have to find some documents to get to them. Any advice or help is greatly appreciated. We really really don't want to lose our home, I'm scared, stressed, and am not really sure what to do. And I am fairly certain that our children will have no Christmas.. and maybe no home. I wish I knew how to explain that to them.

[Moe Bedard]

Hi Pandorah,

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

It sounds like you have your information into Homecomings, NACA , and HOPE.............so I think you have the bases covered..........unfortunately now is a waiting game...............try to get updates as often as possible to see at what stage your file is in..........

Homecomings/GMAC
Loss Mitigation
1-800-799-9250

NACA

Homeownership Preservation Foundation

[Pandorah]

They have responded to the modification I requested back in October by requesting a repayment agreement for 3 months (which is about $80 less than our original mortgage payment) - as "good faith" and they will then review our case at the end of those 3 months to see about the modification.

This only includes my first mortgage, as the oh so lovely *drips with sarcasm* person who submitted my original request apparently only did so for the first mortgage, though I had requested both at the same time.

I ended up hiring an attorney in November.... they are unable to change the terms of this modification thing that the lender has already begun - homecomings says it's this or nothing.

Is this normal????

This is so easy for some but we hit brick walls every turn

[The Professor]

As *** would tell you, I'm a bit of a realist in responding to situations like yours. I need answers to a couple of questions that will help me to provide you with the realistic assessment I believe you need to hear. Please respond to the questions. I don't often come to this forum so if I don't answer your questions, go over to the forum I frequent (Deed in Lieu -- Walkaway) and leave me a reminder. The questions are as follows:

1. Can I fairly assume the subject property is located in California and is your primary residence?
2. What is your estimate of the fair market value of the property?
3. Provide information on your loan(s) including loan balances, and the identity of the lender(s). Also identify whether these loans were created at the time you purchased the property or are the result of a subsequent refinance.
4. Do you pay homeowners association dues?

Daniel

[Pandorah]

Hello,

1. Can I fairly assume the subject property is located in California and is your primary residence? Yes and Yes

2. What is your estimate of the fair market value of the property? About 260k is the median price right now for our home, purchase price was 317K

3. Provide information on your loan(s) including loan balances, and the identity of the lender(s). Also identify whether these loans were created at the time you purchased the property or are the result of a subsequent refinance. The only mortgage we have had was the purchase - it is a first and second as we financed 100%, so we still owe nearly that - we have had the home for 2 years and have paid approx $3k down of the principal loan.

4. Do you pay homeowners association dues? No

[The Professor]

With a purchase price of $317K, I'm guessing based upon an 80/20 division that the balance on your first is approximately $252K and the balance on your second is approximately $63K. Given that your estimate of the fair market value of the property is $260K, I think it a fair assumption that the entire amount owed the second lender is unsecured from a practical standpoint.

In determining a course of action to take, you need to look at all options. They appear to fall into three distinct paths. The first, and probably from a pure business perspective the best, would be to stop making payments and accept the eventual foreclosure of your home. Given the other two choices, I see it as the best approach. But then again I'm not emotionally involved.

The reason this may be the best approach centers on the application of California Code of Civil Procedure Section 580b. That law effectively makes you not personally liable for the first loan and the second loan because their proceeds were used to purchase your personal residence and they were created at the same time you bought your house. All either lender can do is foreclose. Yes your credit will be impacted as the result of defaulting on these loans, but you will not be personally liable. That should be a big relief.

The second approach is a negotiated short sale of the property, where you get nothing and the proceeds of the sale will go to reduce the debt. This may have a less negative impact on your credit (frankly that is a questionable "may"). The problem is that it is hard to coordinate this sort of transaction where you have two lenders and the second lender isn't going to get much, if anything, out of the sale.

The third approach is to seek a modfication of both loans. Problem is from a practical standpoint the only real help would be a principal reduction and neither lender is likely to follow that path.

Let me be honest and upfront. Look at your monthly outgo for your loan payments (including real property taxes). How much does that amount exceed the fair rental value of your home (what could you rent a similar home for)? That excess you pay might be looked at throwing good money after bad. There is a reason 8 out of the top 10 cities in the Country feeling home value reductions are here in California. This downturn in property values isn't over and I firmly believe we won't see a bottom until 2011. Bottoms in real estate are flat over a period of 4 to 5 years. We won't hit the end of this bottom cycle until probably 2016. Does it make sense to keep up this fight until your home value reaches the price you paid for it?

Perhaps a better approach is to simply stop making payments and continue to occupy the home until you have to move out, placing money you would have had to pay on a house payment in a savings account so it can be used to pay the costs associated with obtaining a rental home. Common sense should rule your decision and not emotions.

Take care,

Daniel

[Pandorah]

Thank you for your reply. Unfortunately, there aren't available rentals in our area big enough to house our family... and when they do come up the rent is near the same as the mortgage.

[Pandorah]

I just heard from the attorney's office - which I feel completely retarded for hiring in the first place. With 6 children, I have little time to do all of the research etc that needed done, I felt that an attorney would help. Boy was I wrong.

The 2nd mortgage: The attorney office just heard from Homecomings re: the 2nd mortgage modification - they want to put us in a 'repayment agreement', where we pay the same amount of $655 for 3 months and THEN they will review it. Whatever. We paid them faithfully for 2 years, went into default and ravaged our credit as the only means of hope for fixing the loans we had so we could keep our home. They know we pay them, we have paid them.

AND the 2nd offer, they aren't planning to send us anything at all in writing - any sort of agreement or anything. Just pay them for 3 months. At the same amount. We're paying about 50% of our income for the mortgage, which we CAN keep doing I suppose, but we were led to believe that it would be reduced as the interest rates would be reduced. The 2nd mortgage alone has nearly a 12% interest rate.

If I didn't have to worry about housing us all I'd just about throw up my hands and walk away. But now our credit is wrecked beyond belief, there are no rentals big enough for all 10 of us, and when you DO happen to find one rarely - the rent is nearly what the mortgage is.

I am beginning to wish we had never done this, but we didn't have other options at that time either.

I am so frustrated, irritated, and upset. I am a high risk pregnancy, so I am SUPPOSED to take it easy - but I can't with all the stupid stress from this crap. GAH.

Anyone have any advice?

[Moe Bedard]

What happened with NACA? You were getting your information to them when you had originally posted along with HOPE too................we have had several successful outcomes with members using NACA recently.......were they not able to work with you?

[Pandorah]

They haven't ever gotten back with me.. I submitted all of my information but never heard anything from them again..

I know we'd have to attend some seminar thing too I think, but it's 2 hours away and we both have to work, so I was trying to figure out how to fit that in - and last they had spoken with me they told me about needing to attend that and they would call us when they had openings, when I've checked they have been booked - so I had assumed they were unable to help at this time.

Maybe I should resubmit my information?

I am so frustrated about this stuff.

Homecomings is saying that I broke payment arrangements with them - well funny thing is I never HAD any payment arrangements with them - the only payment arrangements made (and now accepted) was the 3 months for the 1st mortgage - not the 2nd, so I have no clue what they think they're talking about. Our loan #'s are very close, so I am thinking that the note may have gotten put in the wrong case or something, but I haven't broken that arrangement anyways. I mailed the payment priority etc.

I guess I should have just kept paying them the $ instead of trying to help ourselves out of this situation. Now we're stuck and I am afraid we'll end up being messed up in the end. THey say these arrangements are to show we want to keep the house.. Uh HI! Where am I going to go with 7 kids, us and a Mother in Law??

[Moe Bedard]

You should still try to pursue the modification with NACA.........you may be able to do the phone consult in lieu of the workshop......call them and see...........
NACA
1-888-302-6222
https://www.naca.com/refinance/refinanceTenStep.jsp

[Pandorah]

I will try that when I get home (I can't really make any calls from work)

Thank you.. I feel so darned hopeless

[Pandorah]

Well.... here's an update.

I have been making my payments as per the 'good faith' payment plan they put us on, this month marks the 3rd payment. I had received a letter from Homecomings, so I called them to find out what was going on - I am doing what they wanted me to do.... they said my modification was approved and I would be receiving documents shortly.

I haven't received anything. I called them back about a week ago, they said they would let someone know I have yet to receive said documents regarding the modification they approved.. (mind you, this is only for my first mortgage, I am not sure what is up with the second yet - I am in a same payment agreement on that one as well)...

I asked about the terms. They said that they approved a mod at fixed 5% for 5 years (I have no clue what happens after that, no docs yet)... and that payment will go up about $20 a month beginning April 1. March's 'final' payment as per their original repayment agreement is due in days, but that is the scheduled first payment of this modification agreement, with the 2nd payment being due April. Yet, I still have nothing to go with or go on to review.........

So I am concerned, I need to make the payment to not default on the repayment agreement (The only reason I stopped paying is because they wouldn't help me unless I did, and then the payments were going to go up 1k a month just for the 1st loan)... yet, I am afraid that making this payment will show that I "agree" with the modification they have set forth, when I don't even know all of the details! Seems quite shady to me on several levels.

I have no idea who our underwriter is, I do know it's not Fanny (and I Doubt it's Freddy too)... they wouldn't tell me or didn't know when I asked. The worthless attorney I have wasted $ on is also not helpful... and they also do not know (seems to me that should've been something they found out).

The original loan counselor with the attorneys office was very competant and helpful, that gave me hope - all they have done is just agree to everything my lender wanted, and take my $. They truly haven't helped in any way. I started this process by myself, I should've stuck with it that way.

Our home is worth about 80-100K less than it was when we bought it......... what happens in 5 years??? Then we'll be back in this same boat, I fail to see how this helps do anything but prolong some sort of agony while they try and wait for the market to recover so they can profit on forclosure of our home??

The attorneys great solution?? Make the payment and agree with the mod and you can mod it again in 4 years. Yah, thanks. Whatever.

Meanwhile, our credit is trashed, I have used everything trying to stay afloat - and I was considering filing bankruptcy on the debt of all the credit cards I have. UGH.

AND we have 6 kids, expecting our 7th this summer - I have put our taxes aside to be able to compensate for the loss of income when I have to be on leave.

Is this the standard of modifications? I thought they were a more permanent solution. And now I am concerned reading that someone got approved for GMAC loan mod only to be denied by someone else?!

Ugh. This is a mess and I don't know what to do with it.

[Pandorah]

I just received word from the attorney office (for what good they have been I have no clue, People, seriously you can do just as much on your own - save your $. I feel like a total moron for paying one dime to the attorneys office, as I could've done this entire thing and have done it, they have been little if any help! They have 'claimed' to try and negotiate terms downard, but since the mortgage co refuses they say OK... so seriously - what a waste)

Terms are this from what I know (still no documents in the mail)

Terms of the first mortgage 5% fixed for 5 years. I have no clue what happens after that 5 years is up, and neither did the attorney's office - they said it will be contained in the loan documents.

Terms of the 2nd mortgage are a fixed 9% for the life of the loan (Down from 11.99% fixed).

The payment is about $150 cheaper than it originally was and does include property taxes, which it did not prior - we were to pay that seperately, approx $3200 per year.

This total payment is still 45% of our income.. and the home is not worth what it was (which whatever, we just want to keep our home).

My fear is that we'll be back in the same boat in 5 years =/ At this point the 2nd mortgage is unsecured in it's entirety based upon our home value.

I'm quite jaded, sad, frustrated, and scared at this point.. I guess we continue to live in limbo for the next 5 years as the attorney office is unwilling or unable to fight for anything better?
We just want to keep our home.. and hit road blocks every which way =(

[Moe Bedard]

Did you ever pursue NACA again and try to go through the phone consult instead? Members have been able to do this if the workshop is too far away............and their workout would be a low fixed rate for the life of the loan...........and their Home Save modification services are free.

[Pandorah]

I did leave a message for them.. and I admittedly didn't follow up as I should've probably.. had a lot of catastrophe's lately... my dad died, I was his next of kin, starting a new job which I like but hate where I work(and I can't use the phone for personal stuff while there except on 15 min breaks or 30 min lunch), and high risk pregnancy stuff, along with my 1 year old being ill and not sleeping...

I need to get back on that one! I am going to call them back again. But I probably have a limited time with these modifications before they will just foreclose.......... ugh.

Thanks for the reminder about that ***!

[Moe Bedard]

I am so sorry to hear about your dad, and all you are going through right now.........it is hard enough just to have to deal with the mortgage....and then all the rest on top..........

NACA may be able to help you get the low fixed rate............so you don't have to worry about the...........what's going to happen after 5yrs.....

here is the link again...........
https://www.naca.com/refinance/refinanceTenStep.jsp

also members use the online chat that is available during business hours at the top of the page................
and
call the counseling center
1-888-404-6222
and
email
homesave@naca.com


so all these lines to help get you going again...............you can do this


Keep us Posted..........

[Pandorah]

I have updated the information with NacA, I am waiting for them to contact me back.

I received my loan modification docs for the 1st mortgage today.... yeah, funny they are. 5% for 5 years then 1.1% increase every 6 months after 5 years to a max of 13%.. what a joke?

They also want another payment to start it - I just made a payment on the 1st as per the agreement, but they want another $1560 by the 18th (I JUST received these documents today, mind you - and it all has to be back by the 18th or it's null and void)... and then the next payment due April 1st... and they arent open to be able to talk to them on the weekends, and they close Friday at 5pm CST, when I am in PST. So helpful - not! Especially since I am unable to call them while at work. I only have 15 minute breaks and 30 minute lunch. I get off at 4:30.

I am so dismayed... and more scared than ever that we'll lose our house, but this "modification" is less than helpful, as I don't have the money to double pay the mortgage for this month (as I am anticipating that the 2nd modification will include similar terms)... not to mention in 3 months time my income will be reduced in half due to having a baby... so I have 2 months in which I have to figure out how to make up that defecit, when the total of the two payments equal 45% of our income at it's full force now.....

All I can do is hope to be able to actually connect with NACA. Seems we always miss eachother, but what if we can't comply with these terms set forth in this "modification".. which the interest caps out HIGHER than our original loan. This thing is absurd and rediculous! And I am sure NACA can't get things fixed any faster than those 5 days they oh so gracefully gave us *rolls eyes*

Gah! I am so frustrated, and this is NOT helping my stress level any - I am getting hives all the darned time and am already in a high risk pregnancy, if I can't get myself under control then the Dr will take me off work even longer than the 2 months to have the baby, which reduces income.........

I just want to crawl under a rock somewhere.... we love our home, and I have been looking for a rental suitable for the 10 of us, but there is nothing big enough out there.........

I am so stuck and so scared and stressed.

[Pandorah]

Well,

I have further clarification. The "extra" payment I thought they wanted, they aren't asking for another payment, the payment I made a week or so ago was the payment they are referring to - so I am in this without signing anything it appears.

The loan mod people suck, they are rude and less than helpful and won't transfer you anywhere to someone who might help. I guess they hear the "sob stories" all day, that they just don't care much about any person or their homes. One of them told me after I had requested a fixed interest rate of 5.5% on the first loan that it was never going to happen, because I must look at it from their point of view, after those 5 years are up and the rate again goes adjustable then the property value should be improved so they would then have further stake in jacking my rate. Uh thanks, they just want our home, but they want to wait until the value improves. The house is seriously worth about $100k less than when we purchased it.

He tells me he will "be nice" and forward my request for a fixed 5% to the person responsible to review the loans, but that there was "no way it would happen", but to check back later in the week. I attempted to ask how I was supposed to return the documents for the modification by the next day if they want me to check back later in the week? He says "Maam, this conversation is going no where as you keep asking the same questions" uhmmmmm well maybe if you gave me the answer to the question I wouldn't have to ask again?! He finally relented and said "Fine what if I give you an extention of 3 days, 4 days, 5 days. How about 7 days!" Ugh they are so frustrating and condecending.

I called back that evening to speak with someone as I had forgotten to ask about the Obama plan, I was told by that guy "who is a senior rep" that he saw I called earlier in the day and that a request was forwarded to request to fix my interest rate for the life of the loan, instead of keeping me in an ARM. And remarked of how kind it was for the rep to forward that email for me, however, there was absolutely no way that would actually happen. And to call back later in the week to find out about the Obama stuff.

Gah, these people at loss mitigation are so frustrating - most of the ones I have spoken with are difficult to understand at best, as they have quite thick accents.

I emailed Gary Neuman as I had found his information on this site, but have not heard from him at all - so I am guessing I won't. I wish I would have emailed Javid long ago...

I tried to contact our "attorney's" office, and of course haven't heard back from them either in days.

This whole process has sucked from the word go.. and it seems as though there is no one who can or will help us.

I suppose I resign and will just take the modification deal and hope for the best.

We are going to look into filing for bankruptcy as under the new obama plan it looks as though the bankruptcy judge can reduce the principal of our loan... though I need to look more into this. I think a bankruptcy is in our future anyways. Any thoughts or insight?

[Pandorah]

Well the attorney's office is finally doing something beneficial.. at least I hope it is. They said the modifications are "ok" but not good enough. Our house is worth more than 100K less, and there are no principal reductions nor is the interest rate a fixed rate and the 2nd interest rate is still insane.

They would like to deny the modifications, though apparently this can put us back into forebearance (which was the 3 month payment plan that we had to do).. they were trying to get us all wrapped up prior to the baby coming, but that's apparently not going to happen - but if it helps us in the end it is fine I guess.. I just hope we don't get screwed over. I am afraid if we deny the modification they won't accept the next one... but with the Obama plans and the mortgage company just getting it together with that, I am not sure... I know that is part of the hangup. And I missed the call with the attorneys office, Darnit.

[Pandorah]

Not that anyone is reading this but it helps me to keep it straight I guess. I spoke with the office today (not the mortgage co though, I was on hold for 45 minutes and still no answer so I gave up)... anyways, it's a gamble if we don't accept the mod and re-submit to re-request mod because they don't really have to offer us any modified terms next time, they can just flat out deny it and move toward forclosure.

I just don't know what to do either way. If we sign this we're stuck for a year and have to HOPE that it'll work next year. I did talk to NACA, they are to call me again next week.. I just don't even know what to do either way.. I don't want to lose our home.. but I guess we're going to file bankruptcy either way likely, so if we file it will stop forclosure proceedings if I understand correctly - though I don't know if that will mean that they have to give us a chance. But they won't have the Obama plan ready to take action until the 1st of April, and the attorney office says it appears we qualify for it..........

It seems that every darned decision I've made has been made of suck, despite my best efforts.. so maybe I should go the opposite of what I want and just give in.

[Moe Bedard]

I am reading......