4 months late on payments and no word from WF.

[leonidas]

Can someone advise me on my situation please?

I have a 5/1 ARM $1.36M loan with WF (house purchased in 2005 for $1.95M) at 5.125% with the interest adjusting on 8/2010. Due to the hardship in the family and loss of income I applied for loan modification on 3/5/09 (This is the day WF told me they received my hardship letter, DTI info and paystubs). I was also told that on 4/9/09 WF assigned a negotiator to my account. I have not been paying my interest-only mortgage payment since the 4/9.

Since mid June, WF collection calls me every day, sometimes twice a day and ask if anything changed in my DTI. The only change we had was that my wife stopped receiving unemployment because she stopped looking for work because she has to take care of her mother (she leaves with us) who has pancreatic cancer.

When I ask WF when I am going to hear from negotiator, they say they don't know. When I ask them if they would start foreclosure procedure on my loan, they say NO, becasue while I am in modification process, they will only report the late payments to the credit agencies, but will NOT start the foreclosure.

Well, next week will be 90 days since the 4/9/09 day when negotiator was assigned to my case. What should I do? I can't get from WF to focus on my loan!

Also, should I start making my payments again?

Thank you for your answers.

[MAXIE19]

If you have the funds, it is best not to go beyond 90 days without paying.
Did they give you a reason for the delay.........did you ask them if they have programs for loans of your size.....do you have any equity....are you under water......have you tried calling the Executive Team at Wells Fargo? You can probably find their number by reviewing the WF threads on this forum.

[leonidas]

Here are the answers to your questions:
- I have some funds, basically can pay to get to just being 1 month behind. To tell you the truth, I could have stayed current on my loan by borrowing some money. But I was told from many sources that unless I am behind on payments, nobody is going to look at my modification request. Now my perfect credit is ruined and I still don't get any attention from WF. Maybe I made a mistake.
- The people that I talked to from WF collections don't know anything about where in the process my case is. They say the negotiator will get to it.
- They don't tell me anything about the programs that I maybe eligible for.
- We put down 30% downpayment in 2005. Since then, the house went up in value probably worth about $2.2M now. Question: is it good for trying to get a loan modification or bad?
- I'll call the executive team, found their number on the forum 1-800-853-8516. What do they do?

- Question: I am hoping to get modification of my 5/1 ARM 5.125% interest only loan to something like 30 or 40 year fixed with the monthly payment less than what I am paying now $5500. Does that sound possible? Any advice on my DTI to qualify for that?

[MAXIE19]

The executive team can help escalate your file to receive some much needed attention especially in a case like yours where you have been getting the runaround.

The one problem that I see here is the fact that you owe about 1.36 mil but value your home at 2.2 mil. That is a lot of equity which will probably make the bank believe that they are better off foreclosing than modifying your loan. I read someone that you can't have more than 20% equity to qualify for a mod. Most people here are underwater.

Don't be discouraged however, you never know. Fully explore your options. Your home may not worth as much as you think which could help you in landing that mod.

As far as the payments, you will need to explore that with your negotiator. Is your loan being currently escrowed? What is your escrow amount (taxes and insurance)?You need to figure out your escrow as well as the amount of your principal. Taking the escrow and principal payments into account, even if they reduced your interest rate to 2% and extended your loan to 40 years, acheiving a payment of $5500 on a mortgage of 1.36 mil would be pretty hard to get. They would probably have to do some type of forebearance or principal reduction to be able to get you close to that amount.

[leonidas]

Called the executive office today. The lady was very nice and helpful. This is what she told me:
- On my question on the status of my application (where there was no feedback from WF for 3 months), she said that she sees in the notes that the application is progressing through the process and that it's currently waiting for the Broker Priced Opinion, which is a light version of the appraiser. She said this is something that investors requested.
- When I asked who the investors were, she said that my morgtage is backed by the mortgage backed security, which means it's a group of investors.

Does that info shed more light into my case for anyone?

Thanks.

[kdtran08]

Hi,

I am also 4 months late with Country Wide (now Bank of America) but I got the 3 month trial package yesterday. I plan to make the new trial payment but not the unpaid mortgages because the package states that it can be added back to my loan balance? I want to use the fund I have to pay for credit card debts. Am I doing the right thing? Anyone? Thank you!

[leonidas]

More information... Called WF loss mitigation to get the status update. They said they received the broker price opinion on the value of the home and it came as $1.9M (we paid $1.95M). They also said that my modification proposal was sent to investors for approval. They couldn't tell me what the proposal was.

I don't think it's an acurate assessment of the value, becasue I know I can sell it for $2.4M or more, but regardless of this, what does it mean for my modification that the value of the home is less then what we paid for? Is it good or bad? Remember that we put 30% down payment. Any ideas?

[LHarveyMadman]

It doesn't matter what you think your home might sell for. Regardless of whether it's worth $1.9M or $2.4M or somewhere in between, you're in the same boat - sitting on a lot of equity with an excellent interest rate that you're still unable to afford.

I hope your investors agree to modify your loan for you, but you've clearly got an uphill battle, like Maxie already said. Think about it from the investors' point of view. Would you rather have:

1) an investment that offers a 3% rate of return, or
2) an investment that offers a 5% rate of return?

To make your loan affordable, the investors would probably have to agree to option #1. But with the information they have (the BPO), they have little reason to do so, unless they are willing to look deep into their hearts and help you out for humanitarian reasons. If they were to let the home to go into foreclosure, they would only need it to sell for $1.36M at auction (i.e. a $500,000 discount from the BPO, and well below market value) for them to recover every penny of their investment. They could then reinvest their money in new loans that carry interest rates of 5%.

I don't mean to be harsh, but that's the reality of things. Maybe the investors will come through for you, but if they don't, then you have to seriously consider selling your home. You are extremely fortunate to have the equity that you do have, because if you do have to sell then you won't have to worry about the headaches of a short sale.

[LHarveyMadman]

leonidas, what is your family's current gross income (including unemployment)? That's going to be a major factor in determining whether you would qualify for a modification.

[leonidas]

Update as of 7/27/09:
I got a Forbearance agreement from WF. It states that I was 4 months late on my payment and now have to make 3 payments (by 8/1, 9/1 and 10/1) in the amount of $4,900 (which is about $800 less than my interest only payment). After the payments are complete, WF and the investor will review my application for modification and determine whether I qualify for modification.

My questions are:
- Has anyone finished the Forbearance payments with WF recently? What happened after that? Have you been able to get a modification after that? How different were your modification payments from your forebearance payments?
- What information will the investos use to determine my eligibility for modification? Do I still need to be about $120 under in my DTI ratio to be eligible? Do they look at credit reports to figure out the minimal payments on my credit cards?

Thank you.