Starting to get concerned...CW Option Arm SUCCESS!!

[csfdublin]

I'm a bit embarrassed at how little I actually know about the loan that I am on and how it will affect me. What I do know is that I have been making the minimum payments and negative amortization has been going onto my loan every month. We started at $500k in Jan 2006 and are now at about $550k, with the 3 year period where we can make the minimum (neg am) payments up in Jan 2009. I know it's a ways off but I am already feeling very nervous about what will happen in Jan, and can't help but think I should be doing something proactive.

The loan type is "30 Year Conv Jumbo Pay Option ARM". Basically, the loan resets every month according to the current interest rates. We were as high as 8.375% but with the current rates lower, we are "only" at 7.25%.

When Jan 2009 comes around, at the current rate, we would need to come up with an extra $1500/month just to make the interest only payment and nearly $2000/month to make the 30 year fully amortized payment. This is a HUGE jump for us an we will not be able to make it.

So I guess I was hoping to get some advice from anyone with a similar loan type. I was thinking that if I could get countrywide to change my term to 5.25% interest only for 5 years, I could manage to make the interest only payments as they would be only about a $500/month increase which we can handle. Does anyone know if this is something that CW can or will do?

I have a bad feeling that they will turn me away if I call now asking for help but I would like to get things in order before Jan 09 when I will have to either not make a full payment or stop paying altogether!

We should be fine in 5 years as my wife will be back at work...we had another child so she did not go back to work as soon as we had hoped which is why we will come up short on payments come Jan 2009.

Thanks for all your help!

[Moe Bedard]

Hi csfdublin,


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

Question first to just make sure...............

Right now with things the way they are..........when you put together the household income versus the household expenses.........do you have a surplus of around $100-$250 left at the end of the month........
this is very important to any type of workout........

[csfdublin]

Hi ***

Yes, after everything is said and done, we have about $500-600 leftover, which we have been saving for now - I figured we could use that money to come up with the extra $500/month IF we could get a reasonable rate on a 5yr interest only. Much more than that and we're in trouble...

[Moe Bedard]

Add to the expenses a bit............like food and gas.........
try to get it to the $100-$250 range if you can.......

then put together a hardship letter and put in in the body of an email and send it to each of the email addresses below..........you should receive a response within 48 hours to get you started on a modification.........
Also for some inspiration go to the Success Section and read the Option Arm success stories...........we have had quite a few recently even.........they are all labeled with an Option Arm heading so you can find them more easily........

Hope this helps get you started..........
Please keep us posted on your progress......with CW......

[csfdublin]

Thank you so much for the info - I will double check everything and then write the hardship letter. Should I send a separate email to each person on that list or include them all in one email. Sorry for the silly questions and thanks again - I will check the option arm stories and be sure to update on my own story as well.

[Moe Bedard]

You can send it to each one separately this way you could get a response from a few of them........

[csfdublin]

This is odd - I just received a letter from Countrywide encouraging me to call in and request a loan modification. Basically the letter states that am eligible for a 5 year fixed rate because my account is in good standing.

This sounds too good to be true.

[csfdublin]

ok, after reading some other posts here it sounds like the letter is legit. I called up CW and talked with someone who took my reservation number from the letter and tried to connect me with a loan officer. Eventually she came back and told me that they were all busy but that I did "qualify" and that I would get a call within 24 hours from a loan officer with all the information.

She was very helpful and gave her name and extension and direct 888 line to get back in.

I would love to get a call back today but it sounds like I'll have to wait until Monday.....

[Moe Bedard]

csfdublin,

This is good news..........

I can't wait to hear what the offer is............
Please keep us posted.......

[csfdublin]

Here is an update to my story:

I called Countrywide and they informed me that I could change my loan to a Fixed 5 year interest only at 5.75%. I tried to talk the loan officer into 5.25% but they said the only other option was a step loan where the rate starts low and increases each year (I said NO to that).

The process was actually pretty quick and painless. They charged me $500 for all the processing and it included a notary that came to our house and notarized and fedexed all the docs back to the bank.

We are EXTREMELY relieved to be on this new plan and although it isn't a permanent fix, it will get us thru the next five years so that we can either sell or refinance to a 30 year fixed loan.

The new rate is about $750 more per month than our minimum payment we currently have so it will be a bit tight but fortunately we can pull it off.

Thanks to everyone at this site for all their advice and information - it really helped me get off my butt and get proactive with the whole process!!!

[Moe Bedard]

That is great news!!

I am happy that the contact system worked for you!!

Congratulations!!

[RudyJay]

Yeh.. you have the 5 yr..that you wanted.. good job rj

[ergoof123]

Yeah! Good for you! eg.

[elpjohnson]

That's great news!!!! Congratulations!

[schwefls]

Congratulations cfsdublin party hardy