I'm being told I have to be late

[HowCouldIBeSoStupid]

I purchased my home 6 years ago and after living in my 4-family home for 5 years I was told about this great loan that would allow me to move into my own home. Thats when my life turned all around.

I refinanced my now, investment property and took out cash to put down on my primary residence. I currently have an Option ARM loan with Aurora (Lehman) which what started out at $436,000 and now its up to $455,000 a year and three months later. I pay the minimum payment of $2775 (including tax and ins) at an interest rate of 7.75%. The house in this market is not worth over $415,000.

My primary residence is a Conv ARM with Countrywide with an interest rate of 6.75% I pay $2640 with taxes and insurance. The loan is for $331,000 and the house isn't worth over $300,000 in today's market.

Now herein lies the bigger problems. After taxes I clear $2580 a month. My tenants who are always very delinquent give me total monthly $4800. I have to pay one electric bill at the rental property of $225.00, water bill $100, my electric $210, cable, phone internet $175, gas $300, groceries $300...end result: a negative cash flow of $386.00 every month. In order to make things work I have depleted my savings and after that was all gone I let the overflow go onto my credit card.

So I got part time job to help out and keep the house and not loose both and I make about $600 after taxes with the part time. So now I show a surplus of $150 or so.

My hardships is prior to the closing with Aurora I was shown very different figures than at closing. On both my houses a month after moving in my taxes went up considerably as did my insurance. And my long term boyfriend moved out who assisted me with the mortgage.

I am not deliquent on any of my payments however I have been told that in order to receive any type of relief I have to start being delinquent.

I dont know what to do. I can't carry the mortgages anymore and it doesn't make much sense anyway with the negative amoritization on the investment property anyway.

Both homes are in New Jersey.

[schwefls]

Hi and welcome to our forum:

I will not call you by your login name as you are not stupid. Please do not kick yourself. I wanted to stop in say hello and assure you, you are not alone. Shortly someone will be reaching out to you with some sound advice/suggestions. In the interim please hang in there and know that we are here for you.

[Cat Damiano]

Hi,


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

Your primary residence is at a good rate of 6.75%, they might freeze that if it is going to adjust soon...............

So your decisions lie in what you want to do with your investment property..............the first thing that you would need to do is to contact ALS and ask them what options are available to you from the investor on your loan in a hardship situation..........

Loan Resolution
1-800-550-0509,
Monday - Thursday, 8:00am to 11:00pm,
Friday, 8:00am to 9:00pm
Saturday, 8:00am to 4:00pm, Eastern Time

Please keep us posted on your progress..........

[Scott Hazlett]

Hi How,

Just dropped in to say hello as well. Cat sure is right about your starting point. Call your service and see what your investors position is. Sometimes - not a lot - they will actually give advice and be willing to help. But that is definitly the best first action. Good luck and keep us posted...we're pullin' for ya!!

[HowCouldIBeSoStupid]

I have contacted ALS on numerous and the initial conversation went something like this...you signed a contract there's nothing you can do now. After that I kept calling and each time i get different answers. On one occasion I spoke with someone and they said put it up for sale and then if you get an offer below what you owe submit a hardship packet along with the offer. On another occasion I asked about a modification and they told me to download a financial worksheet and submit a packet. But I never get anyone who really knows what they're talking about.

And as far as the CW loan , are you saying CW wont modify or I can't get the new FHA fixed loan being offered on October 1st? I'm a little confused.

And do I actually have to start being late to get results?

[Cat Damiano]

In light of the FannieMae and FreddieMac government bailout....... The only thing that FannieMae has been doing as far as modifying is to offer the HomeSaver Advance, which is for loans that are in default to catch up the past due payments...........but it doesn't hurt to see if they have changed the criteria...........

You would need to call
Countrywide Home Retention Team
1-800-669-6650

to get started with that

With the FHA plan that is starting on October 1st...........you can not own a second property...............so you would not qualify for the FHA loan.

Borrowers must meet the following eligibility criteria:

Their mortgage must have originated on or before January 1, 2008;
Their mortgage debt-to-income must be at least 31 percent;
They cannot afford their current loan;
They did not intentionally miss mortgage payments; and
They do not own second homes.

[HowCouldIBeSoStupid]

Cat when you say fixed you mean it wont balloon for another 3 years and 9 months or so correct? Because the loan I have with Countrywide is an ARM loan and it will balloon but I guess you're saying its fixed for now in that I'm paying a set interest amount without principal. I'm sorry I'm a little lost on all the terms and I get a little confused. If I stay with this loan what should I do to prepare for before the time it does balloon?

And do I make too little for ALS to consider doing a modification?

[HowCouldIBeSoStupid]

To answer one of your previous questions regarding what I want to do with my investment property. I want to keep it and make it work if I could potentially get myself out of the Option ARM but if I can't I have to get rid of it however possible.

And do I have to miss a payment or two to get my lenders attention?

[Cat Damiano]

I meant fixed for now at a good rate..............but you should still contact Countrywide and see what options they can offer you even though it wont adjust for quite some time..........

Some investors are modifying option arms...........I have not seen one here on the forum done from ALS yet..............the option arms are mostly being modified by Countrywide.......

[HowCouldIBeSoStupid]

I spoke with Aurora and they said they are modifying Option ARMs but I have to show a 20% surplus over net income. I'm trying to crunch the numbers in my mind and see how much I have to show after mortgages and all.

[Cat Damiano]

Well that is good news..............you can be our first ALS Option Arm success story........

Good Luck!! at least they were nice enough to tell you exactly where you need to be............most lenders don't do that...........

Please keep us posted on your progress.......