Help with Loan Modification through Wells Fargo

[cahomeowner]

I need SOME HELP!

I have a primary residence in CA. I have been in the process of short selling 3 rental homes in order to cut my losses and save my primary residence.

I am currently 3 months in default with Wells Fargo on my primary and was denied a loan modification.

my ultimate goal is to get rid of the rental properties and try to get approved for the Hope for Homeowners program and have the loan refinanced at 90% of the current market value. the value of my home has dropped (owe 750K. current value around $580-630K) so I am upside down and have no equity. I have a 1st, 2nd and 3rd all with Wells Fargo and my 4.875% fixed 5 year ARM is going to reset in january 2010 so I need to do something fast. The 2nd & 3rd are tied to prime which has seen some relief due to the fed fund rate changes.

I received a letter from Wells Fargo saying I was denied then a couple of days I received an overnight envelope with what appears to be a forebearance agreement.

3 months of reduced $890 payments (reg payment of $2700) then a HUGE balloon $16K payment in the 4th month! Does this make any sense?

I need some advice. I don't want to sign anything that might preclude me from getting a better deal. if the 1st, 2nd and 3rd are all with the same lender. how do I negotiate getting the loans consolidated especially when you have to deal with mortgage side and the equity side? there are a lot of companies promoting loan mods and I am not sure they are going to do any better than I would. The investors have the final say does it make sense for me to shell out $2500-5K for a loan mod company? if I had the money I would not be in default.

I also heard if I modify the note and the house ultimate goes into foreclosure then I lose the protection of the forgiveness tax. is that right? how do I protect myself?

can you help me? I want to save my home. Do you think the bank/investory may forgive any part of the 2nd or 3rd and help me refi into a single loan with a favorable interest rate? Do you think the Hope for Homeowners program is a viable option for me?

I appreciate your advice and guidance. Thank You in Advance!

[oregonheaven]

Needless to say, your situation is quite complex. Might I suggest that you retain counsel. It may set you back a $2-$3k retainer fee, but it will be well worth it to have representation on your side before you make any significant decisions. Also, you need an attorney who is experienced in real estate law, and also can refer you to a professional tax advisor if you don't already have one. That said, I am neither an attorney or CPA, but have hired both in my situation.

Here is what I can tell you from my situation. I also have a loan with Wells on my primary residence that is about $100k underwater. First thing to know is that Wells does not negotiate very effectively or expediently. Second, Hope for Homeowners has had 312 people apply as of mid December, and 0 people accepted into the program. Yes, this is the same program that you saw Congress say would prevent 400,000 foreclosures this past summer. However, they got busy with Wall Street bailouts, so not a lot of time for commoners right now. Thus, I really don't see this program helping you or anyone else since it's not mandatory and banks aren't using it because they don't have to. Talk to an attorney asap.

[The Professor]

cahomeowner:

It may be helpful for you to read the following thread by a forum participant that also has three (3) income rentals and a residence.

3 Rental Properties No Mod

Daniel

[cahomeowner]

thanks for the response.

did you use an attorney and what was your results? was this an attorney who was looking for RESPA loan violations in the orig loan docs?

I have been reading the same info you have on the H4H program and the number of applications received vs the number approved. so far the program has done one thing which is to generate HOPE that there might be some help at the end of the tunnel. I anticipate the administration will put more pressure on the banks to step up. I know Wells Fargo received $25B so hopefully some of that money will get to "mainstreet" before it's too late.

I agree the big hole in the FHA program is that it is a voluntary program. I expect the govt to start putting pressure on these banks. The bailout money will come with some conditions. I have no problem splitting/sharing my equity with the govt if it's going to bail me out. I am hoping the 4-4.5% 30 fixed loan will become a reality and will be available to folks like me who have seen their credit score tank. We need real programs that are going to help people stay in their homes.

I am hopeful and optimistic that I will be able to get out of this mess and save my home.

everyone please continue sending me your thoughts, suggestions and examples of your dealings with Wells Fargo.

Originally Posted by oregonheaven

Needless to say, your situation is quite complex. Might I suggest that you retain counsel. It may set you back a $2-$3k retainer fee, but it will be well worth it to have representation on your side before you make any significant decisions. Also, you need an attorney who is experienced in real estate law, and also can refer you to a professional tax advisor if you don't already have one. That said, I am neither an attorney or CPA, but have hired both in my situation.

Here is what I can tell you from my situation. I also have a loan with Wells on my primary residence that is about $100k underwater. First thing to know is that Wells does not negotiate very effectively or expediently. Second, Hope for Homeowners has had 312 people apply as of mid December, and 0 people accepted into the program. Yes, this is the same program that you saw Congress say would prevent 400,000 foreclosures this past summer. However, they got busy with Wall Street bailouts, so not a lot of time for commoners right now. Thus, I really don't see this program helping you or anyone else since it's not mandatory and banks aren't using it because they don't have to. Talk to an attorney asap.

[cahomeowner]

1/5/9 UPDATE: I spoke with Wells Fargo and they said they could not offer me a loan modification at this time because I have a deficit. They offered me a 4 month Forbearance plan in order to give me some breathing room while I sell off my other properties. The investor on my 1st is Goldman Sachs, the 2nd & 3rd is Wells Fargo.

I am currently 3 months behind. the forbearance plan would offer 3 months of reduced payments with the 4th month as a balloon payment which would be added back into my principle. Meanwhile they will continue to report me 3-6 months delinquent.

all sounds reasonable to me. does this sound right to you? should I sign the forbearance agreement?

The Loss Mitigation dept said if I can improve my situation to show a surplus of income instead of deficit that they would approve a loan mod. what I really need is to consolidate my 3 loans into 1 with a principle reduction and to keep my current 4.875% interest rate. the icing on the cake would be if they could offer me a 40 year loan. I don't know if the Hope for Homeowners program is for real but it sure would help me if I could refi at 90% of the current market value.

any advice?

[Moe Bedard]

with the H4H program it is an FHA refi and your second and third liens would need to release their lien and extinguish their loans in order to be eligible for that loan you can only have one lien......