Countrywide!! Modification approved!!!!

[shannonek]

Hello!

Here's my story....

Bought home 12/22/04 @ 325,000 in Palmdale,CA (The onetime foreclosure capital of the US in the 90's) on its way back to its former glory!

Wasn't too bright and signed into a 80/20. 1st @ 5.7, 3yr ARM w/6mos prepay pen. 2nd fixed 15yr ballon @ 9.875 also with prepay.

Well that prepay was a blessing and a curse. We were tempted at the idea of a cash out refi when our value had rose to $440G in little over a year. But the thought of losing over $10G didn't sit well. So we decided to just wait til Prepay expired to refi....big mistake...kinda. Had we refied the we most likely would have taken every penny possible and blew thru it on frivoulous things and most likely have gotten ourselves into another ARM. So there is the blessing. The curse is that we couldn't refi until 12/07....

8/07- Value now at 380! We were getting scared and decided to forget about prepay and refi into fixed. Ooops LO doesn't show up for appt. Back to original plan.

11/07- rolls around and we start the FHA process with the Aug appraisal....smooth sailing...until ICEBERG!!!! FHA requests field review of home and comparables. Value dropped by 50G! Now at 330,000.

I cant refi fha or conv. I have a 99.99999 LTV. Don't have 10G+ cash for closing costs. Loan starts adjusting 2/1/08 (up $600) then again in 6 mos.

Now I start the loan mod process. I have not 1 late on payment on Mortgage or bills.

676 mid fico
90G yearly income
Lots of foreclosers in area, tons of inventory, fast dropping market.

I called CW, they said that my loan was not originated with CW, therefore I would not qualify for a loan Mod. But sent me to the Home Retention Dept.
I sent in my hardship letter on 1/18/08.


My question is this....I know countywide is my servicer. But the loan modification dept said that CW was not the loan originator, but on further review in my note, Americas Wholesale Lender is my lender ...which is a name that CW "does business as" I am confused. Do I have a leg to stand on with this?


Sorry to ramble on,

Shannon

[Andrew]

You should call back and ask again. My loan was originated by lending tree and I was able to get a mod. I would also send a certified letter regarding this asking why you are unable to get a modification.

Your situation presents what is perhaps the best example of what I'll characterize as the borrower having the upper hand. I know that seems strange, but by not having any equity and not having refinanced, you stand in the position of pointing to the non-recourse nature of your loans and the fact that all the lender(s) can do is resort to foreclosing on the collateral (see California Code of Civil Procedure Section 580b).

The single downside risk to you is the hit you will take to your credit score in the event of foreclosure. The reality of the market in Palmdale is market prices are likely going to continue to slide. So why not use all of this information to your advantage and take a "I'm in the driver's seat" approach to your lenders, simply explaining that they need an REO in Palmdale like a moose needs a hat rack.

So I guess I might start with a simple approach to negotiations. That is, summarize the situation in a simple, understandable manner that explains to the lender(s) that the choice it theirs. You will either stop making payments and live in the property during the foreclosure period 'rent free,' or they can start playing ball in a manner that maintains the situation by lowering the interest rate in a manner that brings your PITI costs more in line with what the fair rental value of the property is.

Their downside risk is considerably more substantial than yours because they could be stuck with one more vacant REO in a market that comes about as close to a disaster as one could describe in this market. Maintain the attitude that you'd like to do the honorable thing and not default in your obligation but need help from them in achieving this objective.

Take care,

Daniel

[Moe Bedard]

Thanks for sharing your Countrywide concerns Shannon and you're not rambling. This isn't easy to figure out.

Good advice everyone. As far as whoever you talked to at Countrywide that said that to you, is BS. They have servicing authority that has pre-built loss mitigation capabilities to modify loans at will when a default is reasonably foreseeable.

I would keep calling and follow many of the Countrywide success stories for guidance and support.

What Moe sez, additionally given the stats that you have in your post you are an excellent candidate for Modification. Income strong - stability? FICO is viable, Location is not one that they would prefer to have another loss leader on their REO lists. Your pay history reflects willingness.

Stick to it, they are one in the same with respect to the fact that Country Wide Home Loans, America's Wholesale Lender, Country Wide Financial are umbrellaed as Country Wide, it was just the method of delivery, point of contact for origination of the loan for the borrower that defined who they were assigned to.

Send the hardship letter return receipt to all of the above parties, 3 times each, call, call, call. Get solid information and keep at it.

Demand a QWR if you feel or even if you do not fee that there have been issues not addressed in the original loan closing properly. In that QWR demand Life of Loan Payment History, all original Disclosure Docs, Note, Deed of Trust, all Riders, copy of original appraisal, TIL and Lender Copy of Final HUD-1. Put them on notice that you mean business and will be on top of this at all times. Make them work at retention too.

[shannonek]

Hello Everyone,

Thank you all for the reassurance! I spoke with a rep at CW today. My case is being assigned and I should receive a call anyday! They asked for a budget, and I am curious if anyone knows the ratios that they use are? I am at about 53 % of my gross incme for credit cards, car/personal loans and mortgage on home? Should I omit a few things or pad my expenses? I just want to make sure this goes through.

Thanks for any input!!

Shannon

[shannonek]

I spoke with a rep at CW today. My case is being assigned and I should receive a call anyday! They asked for a budget, and I am curious if anyone knows the ratios that they use are? I am at about 53 % of my gross income for credit cards, car/personal loans and mortgage on home? Should I omit a few things or pad my expenses? I just want to make sure this goes through.

Thanks for any input!!

Shannon

Recognize that the person on the other side has your original loan application, your credit report at the time you made the loan, your current credit report, and your new income and expense declaration. I'm suggesting being honest may be the way to go, particularly if the form they are asking you to submit that indicates income/expenses needs to be signed and just above it is some sort of statement that it the information is true and correct........

Daniel

Put your contractual obligations down as they are....exactly as they are, if you have a VISA Card with a balance of 3800.00 and the payment is 151.00 that is what you reflect. The Lender will be pulling another credit report for this process. The original 1003 reflects a snapshot of what was when you closed the loan, not what is today. If you job has changed or you have gotten a raise since, reflect that new rincome specifically - they are going to want your paycheck stubs and possibly your W-2's.

You have additional expenses - Utilities, Gas, Insurance, Food, Medical, Cable/Internet, Retirement Savings (they may not be fond of those at this point in time), any and all recurring monthly "stuff" that you might have that is necessary.

Do not short yourself, do not short them, average the utility bills so that there is parity for the year, same for groceries, and medical. The rest is fairly set in stone with a monthly set amount for the service. (You may have to knock out some of the better things in life - like cable to meet their standards) You have a goal here - get back in the track and on the track - Modification.

This is a good faith process, and must be initiated in that fashion, no they are not your friends (lender), but this is in their interests as well, so we need to play fair for the Mutual Interests served.

At all costs, stay focused and proactive in the process there is no magic formula - just hope and tenacity. If you feel overwhelmed, do not hesitate to contact the attorney on the site here - there is modification assistance through this site. Contact HOPE, a non-profit, they too have multiple tools for you to assist you. Above all - hope and tenacity.

State the real, they will pull another credit report. Income is different I am sure after the last review of income as nothing is what it was when it was initiated. They will want paycheck stubs and W-2's. Average the utilities for the year to a monthly figure, include all of your expenses....contractual consumer obligations, medical (scripts, etc...) averaged if necessary for the year to a monthly equation, gas to and from work, cable/internet, Insurances, etc..... The overall effect of this is to provide them a clear picture of what it takes you legitimately to live each month. This allows them to present the picture to others who ultimately make the final decision that this is a good "RISK" and that success is viable for both parties - the borrower and the lender - Mutual Interests. By the same token if you have too much left over, then there is the possibility that they are not inclined to do the modification as you are not in a Hardship position.

Report the data factually and be able to support it, ie. utility bills for 12 months, gas receipts, etc.....if you need to appeal any decisions that they may make that are not in your favor. Personally I prefer Residuals after Utilities and other costs are subtracted......VA methodology, they may get there soon - it works. Above all stay focused and strong and keep us posted.

[JacMac]

I agree with what Poppy and Daniel said, honesty is the best policy. Think about it, the whole process will be tainted if borrowers start to lie to get what they think they want. It will work out better for everyone if we're all honest.

[shannonek]

Okay...Okay, I agree honesty is the best policy...so I gave a minimum payments for credit cards, car payments and loans. I just averaged household expenses. I am curious about one thing, I financed a car for my fiance, who gives me the payment every month and helps out with bills, but is not on my home loan. Do I account for this as extra income or what? At the end I am ultimately responsible for these expenses.

You financed the car it is your contractual obligation, you need to take on the debit side of the house. The other party contributes, however, since they are not contractually obligated to do so, no that income is not used on the bottom line for underwriting and is not taxable, ergo....not considered stable, ongoing and to have a reasonable expectation of continuation. Therefore since I do not use in the final analysis of my risk decision, I would not include it in the equation that you are completing. You are as you said ultimately responsible and this is on your income and contractual outgo and expenses.

You are fine with that representation.

[shannonek]

Hi Poppy,

I need your expertise...

1st 3/27 I/O subprime cluster@*&#!:
$260,000 New payment starts 2/1 @ 7.2% = 2,400+

goes up again in 6mos

Purchase money 2nd:
63,800 fixed @ 9.875 $546 a month

I was approved for FHA cashout refi, 380,000 apraised value, everything was on track until a FHA field review. Value came back 50g less. So 330.000.
Bought the home 12/17/2004 @ 325,00

My LO was speechless, Our plans ruined!

Now I am in loan modification mode, but LO is still trying to find something that we qualify for. 670 fico 90,000+ income, Kinda high DTI, don't know exact #, but cashout was to be used to pay some debt down.

Here is my question,

I have looked at all the fha stuff I can, and I have found several things that say that I can refi my 1st with fha and subordinate the 2nd regardless of the CLTV, as long as the 1st loan LTV comforms with fha guidelines and 2nd lienholder agrees to subordinate.

My loan officer is new to fha and won't address my thoughts on this. Am I crazy or is this possible. I don't need tons of cash, just enough to get the dti down to fha standards.

He asked me to email him tonight on this stuff....

What are your thoughts? Is this someting that lenders will do?

Thank you,

Shannon

[shannonek]

Hi everyone,

I just wanted to say that this site is great! Thank you all so much for your wisdom and strength!

I was assigned my loan negotiator today. Does anyone have any advice in dealing with CW? From what I heve been told on this site, I have a good chance of a loan mod or at lease a rate freeze. I have 2 loans. No lates. Will not be able to afford the coming reset. I also found out that pincipal will be added to my payment.


1st: 3/27 I/O @ 7.2 (new adjusted rate starts 2/1) Extra 600+ a month

2nd: fixed @ 9.875 balloon in 15 (purchase money)

Can I ask that both rates be dealt with?

I was reading ealier about purchase money seconds being non recourse, does that mean that I have more bargining power? Should I not refi into one loan if offered?


Thank you all again for this site, You have given me hope!


Shannon

The product is FHASecure - and you are correct CLTV will not matter as long as the first being retired is an Adjustable rate current at the time prior to adjustment for the prior 6 months (underwriters are real anal and may want 12 months) does not matter when adjusts. Must have not greater than 97% or there abouts LTV on the First - no cash out except closing costs, prepaids and any delinquent payments since the adjustment. This program was designed to get people out of the cluster %&#* loans.

Second must agree to subordinate - why not your first position is a better position for them to get repaid.

The DTI will have to be mitigated and compensated by factors designated by FHA - ability to make payments that were higher before with performance 0x30 24 mos on prior higher mortgage payment, job stability, income not used for qualifying but proven to exist..... can not push DTI over 47% in my opinion, but with the right compelling compensating factors I have gone to 49%. Sorry anal underwriter. Want to see that consumer credit is rated better - pays as agreed no more than 2X30 prior 12 months documented extenuating circumstances or really strong letter of why I goofed. Even then encapsulated consumer lates with strong and compelling extenuating circumstances and reason why won't happen again - i.e. solved problem can fly. Value must support 97% LTV for the 1st. Now your lender may not be able to offer the program, some do not have access to it let alone understand it. Tell him/her that you want and FHASecure - if not offered find a Direct Lender to get it from...do not go to a BROKER. Go to a Banker - Mortgage Banker, please.

[shannonek]

Thank you! I knew that I wasn't crazy!

I think that I qualify, just the DTI is a lil high, but I can get that down here in a couple weeks.

Is this the same program where your ARM had to originate between 1/1/05 and sometime this year? My loan closed 12/17/04

Thank you again for your ultimate wisdom,

Shannon

No I do not recall any mandatory origination dates on the cluster &%$@ loan you are retiring or any date of required adjustment, just that it has to be one of "those" loans and can not be an FHA ARM. Well golly there is in the lender initiative section of the guides - originated not after 12/31/2008. You are OK.

Just for the benefit of your LO I attached the Lender Initiative Statement from FHA for you to "share" with them. The program does exist....

I hope this works....

That did not work, let's try again.....I think this worked.....

[Moe Bedard]

Hey Shannon. Sorry this post escaped me and I missed it. I am so glad that this site has given you hope and guidance. Thanks for sharing that with us. It makes us keep working late in the night, helping everyone we can.

The most common thing I have seen come form Countrywide are a rate freeze at your introductory rate for 5 years. Some at 30 year fixed. So most likely they will keep at at the 7.2 and 9.875%.

It will all be based on if you can afford it and they will see exactly what you can afford when they underwrite and look at your financial picture. They want to make sure you are not trying to game them or the system and I am sure that you are not.

As far as having the non-recourse 2nd, in California yes and it would give you some grease

Due to value the refinance into one loan may be a problem...at least this year. The first will most assuredly get Modified, the second I would wait ---- sneaky until I got the first nailed down and signed for then go for the throat on the second too. At least at that point you have the first where you want it and the second if you did get the modification is icing on the cake....

[shannonek]

Hi everyone! Here is an update on my saga.....

I sent this email to my negotiator late last night....I got a response this morning...

Hello Cynthia,

Thank you for calling Monday morning! I was unable to reach you, but I spoke with someone else in the workout department. I think his name was David. He informed me that the workout department still needed my hardship letter, paycheck stubs and bank statements. I find this to be very stange because of the fact that I have faxed them over 3 times now. In addition, I also sent a budget, W-2's for 2005-2007 and my ARM statement. I also had confirmation from CW that these documents had been received and put into the imaging system. I will be sending them over again in the morning, but I would like to see if you could give me a direct fax where it can be available to you, so that I will not have to go through this runaround yet again. I want to be as proactive in this process as possible and would appreciate any additional phone numbers and faxes where I can contact you directly. I can be reached at 661 xxx-xxxx or via email. I have attached my call log, hardship letter and QWR for information pertaining to my loans.


Thank you,



and her response 1st thing this morning....

I have reviewed your account and it looks like you may be candidate for a rate reduction on your 1st loan. Are you looking for a rate reduction on your 2nd? If so I will submit your request but there is no guarantee. Let me know about the 2nd. Once you let me know about the 2nd, I will request that my team lead transfer your loans to the rate reduction department.

Thank you.


So that sounded promising, I of course told her that I wouldn't mind my 2nd being reduced as well. One thing that I did find odd was that at the bottom of her response there was notes about each of my attachements being deleted....

[attachment "Qualified Written Request.wps" deleted by Cynthia D Martinez/Loan Admin/CF/CCI] [attachment "CW Hardship Letter.wps" deleted by Cynthia D Martinez/Loan Admin/CF/CCI] [attachment "CALL LOG.wps" deleted by Cynthia D Martinez/Loan Admin/CF/CCI]

What should I make of this? Is this just protocal when attachements are read?

By the way I emailed my QWR to all the email addresses @ CW that I could find on this site.

Shannon

[Moe Bedard]

Hi Shannon!

Strange. Keep this email for your records. I am not sure why they would do this, but my guess is that it might not be good. But I could be wrong. Maybe it was just so there is no accidental email transmissions with your vital data on it?

I think it is a great sign you have received a response, but you should still demand that your QWR is properly addressed per Federal Law under section 6 of RESPA.

[shannonek]

Hey Moe,

That was my thought on the deletes. But who knows. I won't enrage myself with a conspiracy theory. I am just going to focus on the fact that I am being moved to the next phase. I found it nice of her to put it in my head about the 2nd loan....I was just going to wait for the 1st to go thru and then tackle the 2nd! Well wish me luck!

By the way, should a qwr be signed? I just sent it by email...I am wondering if I should mail it too?



Shannon

[Moe Bedard]

Yeah, no conspiracy theories, wait are those black helicopters flying above my home?

Per HUD, it should be sent certified mail. I think that is just to make "sure" there is no dispute on if it was received. Technically, it does not have to be, but I would and I would send it certified mail.

Best of luck Shannon!