Modification of 5 in 1 arm Wells Fargo SUCCESS!!

[5in1arm]

Just thought I would share my experiences so far. I called Wells fargo and told them about my situation which is considered a hardship. Since both my Wife and I work for the State of California, our wages were reduced 10% due to our Governor's executive order. Things were tight before our wage drop but got extremely tight in the past few months. We bought our home in fall 2007 and got a stated income 5 in 1 arm with interest only fixed on 1st at 6.125. This was a 100% loan so I originally had $468,000 on first and $117,000 on the second. I currently owe $465,000 on first and $75,000 on home equity second. Both loans are through Wells Fargo.
We have never been late on any payment. When I called them, I was told by Wells to write a hardship letter and fax this and two recent paystubs to them as soon as posible. I faxed it to them on April 2nd. I followed up on Monday, April 7th and they said they recieved several items that was faxed to them and to call back in a few days to verify they scanned it into the "system". I called back in a few days on April 9th and was told that I needed to call the loss mitigation department. I was also told that my house had already been appraised and that it came in at $385,000 which is signifantly lower(approx. 65,000 less than Zillow). I asked why they appraised my home? The Wells representative said that it appears they may be looking to do a Principal reduction modification and to get you into a fixed interest rate loan. He gave me the number to loss mitigation and said I should call between April 13th and 15th to talk to them.
It seems like it is going very smooth so far. Does anyone know what I may be offered? Has anyone else experienced this with Wells? My expenses are about 80 to 90% of my income at this point. If anyone has any input it would be appreciated.
Some research I have done indicates that some of these institutions are reducing or Craming loans, modifying them quickly and selling them off to minimize losses. Is this true?

[Moe Bedard]

Hi 5in1arm,



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

There is a uniform set of guidelines and steps that the participating servicers and investors are following to modify loans on a principle, owner occupied residences, to a target mortgage payment on a first lien alone, of 31% of gross income..............a principal reduction isn't what they are using to get there.............the very last step if they can not get to the 31% by lowering the rate and extending the terms, is a principal forbearance which takes the principal from the front end of the loan and places it on the back end in a balloon payment that will not be due untill you sell the home or refi the home..........

Try contacting the executive team instead to see what the options are for modification on your loan type........
1-800-853-8516


To be eligible for a Home Affordable Modification, a borrower must:

• be an owner-occupant in a one to four unit property, and have

• an unpaid principal balance that is equal to or less than $729,750 (for one unit properties and higher for two to four unit properties, consult the Guidance for limits),

• a loan that was originated before January 1, 2009,

• a mortgage payment (including taxes, insurance, and homeowners association dues) that is more than 31% of the borrowers' gross monthly income, and

• have experienced a significant change in income or expenses, to the point that the current mortgage payment is no longer affordable.


Home Affordable Modifications are designed to prevent foreclosures by making mortgage payments affordable for working homeowners struggling to retain homeownership. The plan is not intended to replace equity lost by home price depreciation.



Here are the steps being taken and links to the program information............

In summary, participating servicers will (in order):

• Determine that a loan meets the minimum eligibility criteria (owner occupied, originated before January 1, 2009, UPB equal to or less than $729,750). If yes:

• Obtain sufficient income information to determine if the borrower has a front-end debt-to-income (DTI) ratio of 31% or greater (verbal income may be accepted for initial evaluation subject to verification prior to final approval). If yes:

• Capitalize (add to the loan amount) accrued interest, past due taxes and insurance, delinquency charges paid to third parties (e.g., for inspecting the property), and escrow advances by the servicer – but not late fees or other default fees charged by the servicer;

• Determine how much of an interest rate reduction is required to get the borrower's mortgage payment to 31% DTI, and if the DTI still exceeds 31% at the rate floor of 2%, modify the loan in other respects specified in the Guidelines;

• Apply a Net Present Value (NPV) test to determine if modification (including the incentive payments) provides the investor with a better financial outcome than foreclosure. If yes:

• Put the borrower on a trial modification at the new interest rate and payment for three months.

• If the borrower is current at the end of the trial modification period, the servicer will execute a modification agreement that includes escrows for taxes and insurance even if the prior loan was not escrowed.

Making Home Affordable - Payment Reduction Estimator

[5in1arm]

***,
Thanks for the detailed response. I plugged in our numbers to the DTI calculator and it shows 41%. So that make us eligible for the plan. My loan does not have principal in it so I only plugged into the calculator the Interest only payment. The DTI would be higher if I added Pricipal, interest, insurance and taxes at 59%.
Like you said they are probably going to propose a balloon payment at the end. What would be a disadvantage to this type of situation if they also reduced my principal and locked me into a fixed rate?
I wouldn't mind getting forgiven on this overage, what are the possibility of this?
Thanks for you help.

[Moe Bedard]

If the lender forbears (defers) principal, the amount of the deferred principal will be owed when the loan is paid off or refinanced, or the house is sold. There will be a balloon payment in the amount of the deferred principal but it will not accrue interest. If the lender extends the amortization period but not the term, it will increase the size of the balloon. The amount of the increase will depend upon when the loan is paid off. Clear disclosure to consumers about the balloon payment is important.

The investors are not going to be forgiving that amount.............it will come due when the loan is extinguished through sale, refi, or paid off.

[5in1arm]

Ok, thank you.
What would be any other options, or if a good balloon payment offer is given shouldl I accept it?

[Moe Bedard]

we can not advise you on whether or not to take a modification offered to you........that would be a personal decision based on your individual situation.


Principal forbearance and balloon payment is the last option on the steps to get to the 31%,..........they will first reduce the interest rate and then extend the term.............and follow the other steps in order..........



Step 3: Target a Front-End DTI of 31%. The lender/investor shall follow steps 4, 5, and 6 to reduce the borrower’s payment to the level corresponding to the Front-End DTI Target.

Step 4: Reduce the interest rate to reach the Front-End DTI Target (subject to a floor of 2%). The note rate should be reduced in increments of 0.125 %, and should bring the monthly payment as close as possible to the Front-End DTI Target without going below 31%. If the resulting modified interest rate is at or above the Interest Rate Cap, this modified interest rate will be the new note rate for the remaining loan term. If the resulting modified interest rate is below the Interest Rate Cap, this modified interest rate will be in effect for the first five years, followed by annual increases of 1% (100 basis points) per year or such lesser amount as may be needed until the interest rate reaches the Interest Rate Cap, at which time it will be fixed for the remaining loan term.

Step 5: If the Front-End DTI Target has not been reached, extend the term of the loan up to 40 years. If term extension is not permitted extend amortization. The 40-year term begins at the start of the modification (after the borrower successfully completes the Trial Period). Note that the servicer should only extend to a term that is necessary to reach the Front-End DTI Target; there is no requirement to extend to a 40-year term.

Step 6: If the Front-End DTI Target has not been reached, forbear principal. If there is a principal forbearance amount, a balloon payment of that forbearance amount is due on the maturity date, upon sale of the property, or upon payoff of the interest bearing balance.





you would need to submit the information that they ask for to see what the workout is going to be, and go from there.........

[5in1arm]

Great. Thank you again for all the detailed information. This isn't information that you find everywhere. Hope this helps other in the same situation that we are in. I will find out what the specifics are and post again.

[Moe Bedard]

Keep us posted!
Good luck with the mod!

[5in1arm]

Just a quick update.
Called Wells Loss Mitigation this morning. Was told they don't have my information(Same loop conversation). Explained that I was told different by counselor last Thursday. Didn't get anyhwhere with them. But didn't give up. Thanked them and decided to call back the number *** gave me yesterday (The Executive Team) .
What a breath of fresh air. Friendly staff answered and I explained my situation. The gentleman said that he would be taking over my case personally and gave me his own personal fax machine number, a email address, and assured me he was going to start working on it today. He also asked for my number to call me back.
Looks like things are rollin, Thanks ***.

[nathanb]

Wow 5in1arm that is great progress!

Does anyone have a fax number for wells fargo executive offices?

Thanks

[5in1arm]

1-800-853-8516 is the number *** gave me to the executive team. Good luck.

[nathanb]

thank you! i just talked to WF and i have at least been assinged to someone and they have finished my finacial review. Hopfully i will have somthign soon!!!

[sammyt74dp]

I have not heard of anybody having a single bit of success with the "Making Home Affordable" plan yet. Has anybody thats been in contact with this "Executive" Team been told that this new plan has made a difference in their willingness to help with a Mod for anybody? Sounds like it depends on the mood of whoever answers the phone. Most people at Wells could care less from my conversations with them. Saying stuff like "We don't do Modifications". Geez so much inconsistency with Wells Fargo..

[nathanb]

I have not experienced that. They have pretty much told me the same story each time i call. The have never brushed me off about not doing mod's, the first time i called i just explained my situation, and told them i wanted to send in my hardship info for a mod, and they told me where to send it. Though who knows what the final outcome will be since i am still waiting. If you have not faxed in your hardship info already you should defiantly send it to the executive office. I am stuck in loss mit because that is where i originally sent my hardship docs. good luck

[sammyt74dp]

I sent everything to Loss Mitigation. But they said 6-8 weeks to get assigned or something to that time frame. I don't have that time frame. Sounds like I need to call this Exec number and get somebody that can make some decisions on the phone, VS the other folks that have not been that helpful frankly.

[nathanb]

Loss mit told me 30-45 days, but the rep last week told me it has been taking about 30 days to be assigned. I am about 25 days in and I have already been assigned. When I spoke to the executive team they told me their role was to step in when the customer is having servicing issues they can step in and take over the file. I did not really have anything legitimate, but sounds like you do. You should call them and express your frustration….maybe the will take it over. fficeffice" />>>

[sammyt74dp]

Will give it try. Thanks for the feedback.

[5in1arm]

Called today, They received my information and are checking with supervisors to see what is going on with my file. I honostly think things will happen now. I started with Loss mitigation also. I felt right away I was in the loop with them. But thanks to *** I received the number to the Executive team and I think it is in the right hands now. Good luck and you guys keep me informed of new information your receiving.

[edh3018]

Since you are in CA as well, by chance is it Norcal? Like near Sacramento area? I am in Norcal, and have been trying to do some work on my loans as well, 2nd is with Wells and I was told there is a local contact working in Roseville, CA that is here to only work on loan mods for local residents... Have you heard this?

[nathanb]

I live in Roseville and have not heard that. I have WF.

[edh3018]

Let me see if I can get more information. I will make a couple calls to some people who have told me about this "contact" locally. I thought one of my wife's co-workers was going through the process of modifying their loan with this local person. More to follow....

[5in1arm]

Not sure. Midwest I think. Good Luck

[kat10]

5in1,ed,nathan.....looks like we've traveled this road together w/ WF. If you haven't gotten involved w/ WF ERT number that *** has posted, 800-416-1472, I would suggest contacting them. They seem to be able to expedite things. They will (may) designate a person to your file and you can stay in contact with loss mit through the exec office rep. Stay on them like flies on a pig!!! If they contradict eachother, call their bluff. Don't be suprised when left hand doesn't know what the right hand is doing. You become the neck of the beast....stay in control of what you can...you and your notes.
I wish you peace on your journey.
k

[5in1arm]

Thanks Kat10,
Already working with executive team member who is dealing with a supervisor of loss mitigation. A be assured every other day they are getting at least an email from me. Does anyone have an idea what time frame we are talking. Is it possible to completly do this in 1 month?

[nathanb]

i just talked to WF today. I submited paperwork on 3/19 and on 4/10 they requested an appraisal. So i am hoping to have somthing very soon...if that happens next week...it would be pretty close to 1mo. The exec offices told me today they were offering the Obama plan first before any other option. we will see.