Countrywide - Foreclosure OR Modification OR Nothing

[mmmddd]

Hello,

I live in AZ. Bought my house to about 230K with 5% down and 80/15 from Countrywide. My first loan is remaining for about 175K (5/1 arm adjusting in October 2010) and second for about $34K (15 year baloon). My house value currently is about $150-$160K. It is my primary and only home. I dont have my wife on it at all. Its all only in my name.
I have a decent credit score of about 750.

I can afford the current mortgage and have calculated after reading my loan docs that my loan cannot go up more than by $550/month (MAX) because of the cap, which also I will be able to afford if things remain the same or improve.

Obviously, because of the value being down, I cannot refinance.

What would be the best option for me at this time?

1) Foreclose - Foreclose the house and buy another house (may be in wife's name, she is working and should have decent credit) and let the credit come back on its own in about 7 years. Think of this house as a bad investment and let it go? Because of the AZ law and Bush's foreclosure law, I dont think lender can come after me.

2) Modification - Should I even apply for modification? I mean, will I be even eligible for that? Would Countrywide even consider it? Any similar experiences will help.

3) Should I just relax and do nothing? I am not sure how much time will it take for me to even out in case I just wait and pay my mortgage which I can afford to do.

Mike.

[Moe Bedard]

Hi Mike,

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


A modification is given in a hardship situation............if you are showing that you can afford the payment, that would not be considered a hardship.........so modification is probably not going to be an option.......

If your wife can qualify for a house in her name only.........that may be an option.........

as far as the Arizona laws about deficiency I would suggest that you consult with an attorney familiar with those laws to give you all of the ins and outs of walking away from the home and then make your decision on what to do from there...............it may be a while before the property recovers............

[mmmddd]

***,

Thanks for your insight on the situation. I know nobody knows when will the market recover and when will real estate go up again etc... but I can wait out for about 3-5 years ... do you think market will improve by then? I live in the house, I love it... so I dont want to let it go... but again dont want to be stuck with it for 10-15 years to even out ...

Have you seen cases where countrywide has converted arm to fix without changing the principal? I did talk to countrywide over the phone and he asked me a few questions over the phone about income and expenses and asked me to wait for about 4-5 weeks to get a response. Inspite of repeatedly asking if I need to send ANY documentation, he said NO and that mine is a minor loan modification (changing arm to fixed without changing principal) and so no docs are needed.

Is that ok or you think he did that to just get rid of me?

[Moe Bedard]

I don't think he was trying to get rid of you..............a rate freeze is not a restructure.....so it is a pretty simple request, .....but it still would need to be approved with the investor which is most likely the reason for the waiting period...............in your given situation for the moment you indicated that you would have the means to sit it out for at least the 4-5 weeks while they work on the approval to fix the rate.......

You may want to call in a couple of weeks and also look online to make sure it is in process.............
1-800-669-0102

[mmmddd]

***,

Thanks for your input. I will do that and keep this updated.