Wells Fargo SUCCESS Never Give Up!!

[Steven]

I live in Minnesota with my wife and two kids. We bought our home in 1999 and we have refinanced it a couple of times, each time taking out cash and increasing our debt. I've seen a number of references on this site to "wishing I could go back in time" and I can relate. There are many reasons that got us to where we are, but now we need to find our way out.

The last time we refinanced was January of 2004 and we got a rate of 4.875% with a 3-year ARM. We chose an ARM only because we were planning to sell the house before the rate was due to adjust. The real estate market went bad and we haven't been able to sell.

We would like to move for reasons other than our bad mortgage situation. My wife and I both work about 30 miles from where we live and the commuting costs are beating us up pretty badly.

In late 2006, Wells Fargo acquired our mortgage from the bank that originally serviced it.

Our rate jumped from 4.875 to 6.875 in January of 2007 and our mortgage payment (including taxes and insurance) went from about $1,240 a month up to about $1,490. We kept up with everything pretty well until summer of '07 when my wife wasn't working for a few months. We kept up with the mortgage, but fell behind on credit cards and other payments.

In December, we had a furnace issue and a couple other things conspire against us and we missed our mortgage payment for the first time. I was in contact with Wells Fargo about the situation and in January, they put us on a plan to get caught up. We paid $1,000 in January and then we were scheduled to pay about $1,880 per month until about July to get caught up. We made the huge payment in February and March (due on the 15th), but I'm concerned about April.

I've continued to make the mortgage payment a priority, but it has come at the expense of some other payments, and this is starting to catch up with us. I get paid this Thursday and again on the 17th, so to make a payment by the 15th, I need to use this week's check (plus some extra from my wife's check) to do it. I REALLY need to pay some other bills before the next check on the 17th, so I'm getting scared about the whole situation.

I called Wells Fargo and asked if there was any way to let me slide the due date on this month's payment to the 17th and they said no way... there is no grace period. If I miss it on the 15th, the agreement will be broken and it will be up to the investor to decide if they will work out a new agreement with me.

Sorry this is getting really long. I wish I knew if they would work with me on another agreement if I make the 3/15 payment on 3/17. If they accelerate us into foreclosure for missing that payment, I will be very upset.

Any advice? I thought I would try calling Hope tomorrow to see what they say.

Thanks for this great website. There are so many of us struggling out here and this is a fantastic resource.

Suggestion...if you have student loans request a 6 months hardship forbearance, they will shut them down for 6 months, no payments....and the housing issues are one reason they are doing the hardship forbearance on Student Loans...

Then for the unsecured debts, see your local and non-profit CCCS group and try that method for the unsecured debts (no auto loans) and see what they can do with the credit cards, this does not hurt your credit like it used to by the way. I have seen FICO's as high as the high 600's with borrower's just out of CCCS repayment plans.

Meanwhile please call HOPE 888.995.HOPE or ACORN ACORN: Home to see about modifying this stinker. They can and will intervene if you get a good counselor, if you get a "dud" call them back and get reassigned to someone who is proactive and will assist you and intervene.

Wells is tough, you will have to work hard to get them to come around, they are very hard nosed and frankly difficult to work with, HOPE even says this.

[Steven]

I spoke with my local non-profit about a debt management plan for my unsecured debts, but they said we don't have enough disposable income in our monthly budget to get one started. We have about $45K in credit card debt.

Selling the house would probably be our best bet, but we haven't had much luck trying to sell it and we can't have it on the market and try to refinance it at the same time.

I talked to a well-respected local bank about an FHA Secure refi, but they said our debt to income ratio was too high (about 50%).

My credit score is down in the 540 range now after all of this.

You should with that kind of debt load then consider a short sale on the property and/or continue to try and modify the loan into something that will not be such a burden on your and your family. Please call HOPE and ACORN and see what they might be able to do with regards the house and either modification or Short Sale.

[Steven]

Thanks for the information Poppy. I will call Hope today.

How much time should I expect to spend on the phone with them the first time I call? And do you think you get "better" counselors at any particular time of day?

We are considering a short sale. We aren't sure if we are upside down with our mortgage-home value or not. The bank appraisal in 2004 came in at about $240K. We have tried to sell it at $239K, $229K, and finally we tried at $219K last fall. We had a few lookers, but no offers.

We owe $196K on the house. I figured if we could get an offer of $207K, we could pay the realtor 5% and still come out even. We might have to get the price under $200K to get it sold and that would require a short sale. How does the realtor get paid in a short sale?

On short sales the bank negotiates the commissions paid, that way they are totally in control of the funds that are disbursed to the realtors that are involved in the transaction and can justify the costs to the investors on the other end of the loan.

[Steven]

I contacted Hope and talked to a counselor. She explained the process and told me what information I would need to have handy when we go through things. I am going to gather that up and call her back. I'll keep you posted on how things go.

Thanks again for the help.

Please do keep us advised and if you need any help let us know...we are here to help in any way that we can.

[Steven]

I am planning to gather our financial information tonight (it's been a busy week) and call Hope as soon as possible.

Does anyone with knowledge of Wells Fargo know if it is likely or unlikely that they will consider a modification with us? Our rate is at 7.00% right now which is bad compared to the 4.875% we started at in 2004, but not bad compared to some of the other people on this site.

Another question... our rate isn't eligible to adjust again until January 2009. Since rates are heading back down and there's talk of the government taking steps to block rate increases on ARMs in the future, does it seem likely that our rate has a good chance of staying put or even dropping a little in January 2009?

I'm still going to pursue the load modification route through Hope, but these questions have been on my mind.

Thoughts?

[Moe Bedard]

Steven,

It is hard to say what will or won't happen with Wells on your modfication as each investor and how they approach the situation is different in each case. All you can really do is give it all you got and hope for the best......7.0 isn't a terrible rate and you have time before it does adjust...so just work dilligently on the mod with HOPE.......

Keep us updated on the progress.....

[Steven]

***,

I see you posted Wells Fargo's contact information for loss mitigation in Dolly's thread titled, "Need Help...don't know what else to do."

I am going to call Hope tonight, but do you think I should contact Wells' loss mitigation people right away too? Or should I wait and see what Hope says?

[Moe Bedard]

Steven,

If I were you I would do both........it won't hurt....
Use the number I gave to Dolly and start the modification process with them.......ie....getting your paperwork together.
Call HOPE too........with them we are finding out that it depends on the level of commitment of the counselor that you get......so try them as well.

Post back what happens when you call.......

[Steven]

I found a blog entry by Moe that says (in a nutshell) that Hope Now is funded by the same banks that preyed on home owners in the first place and they shouldn't be trusted. I'm getting conflicting messages about whether I should approach them for help.

[Steven]

I just got off the phone with a fellow named James with Hope. We went through my budget and found that I have a roughly a $430 monthly deficit right now. He went through my options for fixing the situation while keeping the home (special forbearance or loan mod) or getting rid of the home (short sale, DIL, etc.).

He suggested that I wait two days and call Wells Fargo Loss Mitigation to see if they have assigned me a negotiator yet. He advised me to tell the negotiator what I intend to do about my budget deficit to make a loan modification make sense for Wells, i.e. cutting expenses, taking a second job, or whatever. He said they won't look favorably on a loan modification if I have a significant monthly shortfall, which makes sense.

One other thing that James told me about was an upcoming program called Homesavers Advance that will be available through Fannie Mae lenders (like Wells Fargo). He said you can borrow enough to cover the amount you are behind on your mortgage, including missed payments or unpaid property taxes. If I understood him correctly, he said this loan will be interest and payment free for the first six months and then must be paid back at 5% interest. I could be off on some of those details... I was writing as fast as I could. Does anyone have strong knowledge of the Homesavers Advance program? He said it will be rolled out on April 14. He gave me a number to get more information on it... 1-888-326-6438, option 2.

James also urged me to contact another person with Hope about a DMP for my credit card debt. I've resisted these because I've heard they reflect almost as badly as a Chapter 13 on your credit.

I guess I'll wait until Thursday to call Wells Fargo's Loss Mitigation department.

On another note, my wife had an interview for a second job today and she was asked back for a second interview next week. I have an interview with a local college next week to see about teaching evening courses in an upcoming term.

Maybe we'll find a way out of this darkness. Thanks again to everyone who contributes to this site. You are like lights in that darkness.

If I can dig out of this situation and learn from it, I wouldn't mind contributing to this site and this cause. Knowledge is power, and I can see a groundswell of knowledge building here... and a lot of scared people are becoming empowered to find solutions to these gut wrenching, exhausting problems.

[Moe Bedard]

Steven,

Call CCCS (Consumer Credit Counseling Services) for the credit card debt..........they really can help and it doesn't reflect like a BK at all on the credit............lenders can see that you are paying it back and staying on top of it and they welcome people that are working with CCCS.
That also might help alot with the deficit if it is mostly credit card.......

[Steven]

I have another question. Is there any reason why I can't be in the process of seeking a loan modification and have my house on the market at the same time?

I know you can't refinance your house while it's on the market, but how about a loan mod?

I might work on getting the house back in showing condition over the next few weeks and try to sell it (again), but I don't want to screw up the loan mod process if I have a shot at getting decent terms.

[Steven]

By the way, thanks for the information on CCCS ***. I will look into this.

I think it was Dave Ramsey, the debt free guy on the radio, who said that DMPs are similar to a Chapter 13 on your credit report. Maybe they used to be, but aren't anymore?

[Moe Bedard]

Steven,


If you want to keep your house just keep at the loan mod process.......
wait until that avenue is exhausted before putting the house on the market........especially since you had indicated that if that is the avenue you have to go, you might have to consider a Short Sale..........
This way the lender already would know the hardship situation........

[Moe Bedard]

Hey Steven,

I wanted to chime in about what I wrote about the Hope Line. Yes, it is funded by lenders. That worries me, as it should everyone. They can be very helpful, but in the end, I feel that 90% of the counselors do not have the skills to combat predatory lending and mortgage fraud. Which is huge issue not being addressed by the Hope Line. In my experience 1 in 2 people have some type of predatory lending on their mortgage, that can actually help them get relief, if they use these abuses to "fight" the lender.

A lender funded hotline does not fight lenders, they "work" with them with the ultimate decision with the bank. To me, that is not fair to victims.

With that said, you still can get great help, but the help will be limited and may not be what you need.

[Steven]

Originally Posted by *** Damiano

Steven,


If you want to keep your house just keep at the loan mod process.......
wait until that avenue is exhausted before putting the house on the market........especially since you had indicated that if that is the avenue you have to go, you might have to consider a Short Sale..........
This way the lender already would know the hardship situation........

So you're saying that I should go for the loan modification and, if they ultimately deny a loan mod, then they'll be fully aware of my situation and more likely work with me on a short sale. I see what you're saying.

[Steven]

Originally Posted by Moe

Hey Steven,

I wanted to chime in about what I wrote about the Hope Line. Yes, it is funded by lenders. That worries me, as it should everyone. They can be very helpful, but in the end, I feel that 90% of the counselors do not have the skills to combat predatory lending and mortgage fraud. Which is huge issue not being addressed by the Hope Line. In my experience 1 in 2 people have some type of predatory lending on their mortgage, that can actually help them get relief, if they use these abuses to "fight" the lender.

A lender funded hotline does not fight lenders, they "work" with them with the ultimate decision with the bank. To me, that is not fair to victims.

With that said, you still can get great help, but the help will be limited and may not be what you need.

Thanks for the explanation Moe. I am skeptical of just about anything a lender tells me... I've got a Chase credit card and that company has flat out lied to me twice, causing me great burdens.

So I understand that anyone involved with the lenders needs to be watched closely. I understand that HOPE is funded and supported by the lenders. To their credit (no pun intended), the HOPE counselor disclosed very clearly at the beginning of the call that they are supported largely by the mortgage lenders. So I will work with them to the point that it seems beneficial to me and my family and I will deal with them guardedly.

[Moe Bedard]

Good stuff Steven. It is nice that they are adding that disclaimer now on the Hope Line. You should be fine and in good hands. Always go with your gut and if you feel uneasy or not be taken care of, find a new counselor right away. Sometimes it is just the person and not the services. Same thing when you call in for help.

That help can be dependent on how the customer service rep feels that day. Sad but true.

Anyways, best of luck and your in good hands here with ***.

[Moe Bedard]

Your question to *** and subsequent answer is right on. Keep in mind that a loan modification denial my be a mistake on their behalf and always recommend trying for a loan mod at least 2 times before you go into the short sale mode. (if your goal is to save your home)

[Steven]

My ultimate goal is to sell this home and move closer to where my wife and I work, but I don't think I can sell it without a deficit at the closing, so a loan modification and a second (or third) job might buy us time so we can sell the house without losing our shorts.

I was just wondering if there is harm in putting our house on the market while we work through the loan mod process.

We owe about $196K on the house between the first and second mortgages. We tried last summer to sell the house at $219K and we had a few lookers, but no bites. I could put it on the market at $209K and probably accept an offer around $207K and still pay the realtor a 5% commission without owing anything at the closing... IF I don't have any other selling costs besides the realtor commission.

Is there any harm in listing the house for a "break even" sale while I'm working through the loan mod process? Then, if the loan mod doesn't happen, I could look at a short sale?

[Moe Bedard]

I would actually just go into short sale mode ASAP and get aggressive on pricing. Talk with 3 Realtors and get CMA'a on your homes value from each one of them. Make sure they are experienced with short sales. They will negotiate and arrange the short sale with your lender. That is their job and how they earn a commission.

So, yes, get that home on the market but only with a very good Realtor that you have screened. Do not sign a 6 month listing agreement. Tell them you will only do a 30 day, month to month because you want to make sure they are going to do what they say they will do.