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Adding Insult To Injury.....

Discussion in 'Loan Modification' started by Aspie Mom, Jul 4, 2014.

  1. Aspie Mom

    Aspie Mom LoanSafe Member

    Can't get a modification on 2 IO loans going to reset next year. About $25-30k underwater.

    Have to spend $7k to put a new roof on this albatross this month.

    I repaired the roof a few years ago and my time is up. No choice. Have to keep my children safe.
  2. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    I'm sorry to hear that. But you have to do what you have to do to keep your family safe.

    The cost of homeownership is much more than most people think.
  3. Survivor_IN

    Survivor_IN LoanSafe Member

    Been there. This is your home! Yes, make important repairs, you LIVE there.

    Better to keep home for family than to be on the rental market.

    If your loan is still current, try the FHA short refinance program or the HARP program. Also, applying for HAMP can stave off foreclosure while you are being reviewed. If push comes to shove, and you have no other choice, pay the first lien only. Seconds are not going to foreclose if you are underwater.
  4. LoanModHelpCenter.com

    LoanModHelpCenter.com Michael Nazarinia Loan Workout Expert 877-747-2969

    Aspie Mom, you are always able to make the principal and interest payment as that is your option and there is no penalty and this amount should show on your monthly mortgage statement as the 30 year amortized option.

    as you get to 120 days before the payment adjustment, that would be the time to evaluate ratios and seek modification due to change in payments that are going up and are considered a payment shock if they are more than 7.5% higher than the existing monthly principal and interest payment amount.

    Please post your loan modification scenarios here:
    Find out Now If you even QUALIFY for a Loan Workout Solution. Post Your Situation
    or email them in.

  5. Aspie Mom

    Aspie Mom LoanSafe Member

    Thank you for the information. I've been trying to years to get these loans modified to a traditional 30 year fixed rate with no luck. I bought in 2005 at the height of the market so I've been underwater for years and years now. Because of that I have always been hesitant to pay on the principle as it seemed like throwing money in a black hole.

    The existing interest payments are just over $500/mo now because my interest rate is based on a spread over Libor. Does the 'payment shock' exist in a situation where you go from interest only payments to a required P&I payment? My main concern is being able to afford it when it resets to a 20 year amortization, especially with an AR.
  6. LoanModHelpCenter.com

    LoanModHelpCenter.com Michael Nazarinia Loan Workout Expert 877-747-2969

    Aspie Mom - thanks for your response post..

    It is not possible to modify a loan to 30 year fixed under the HAMP Tier 1 Program as that program has fixed term as low sa 2% for 5 years.

    HAMP Tier 2 is currently fixed for 40 years at 4.25%.

    Fannie and Freddie owned loans are at 4.625% for 40 years.

    Depending on your loan investor, there are only certain mod programs available.

    Yes when the loan turns from a 10 year interest only option period to a 20 year fixed principal and interest payment, the payment shock can be staggering.

    Unfortunately, you have to wait until 120 days left before the reset.

    Good news is the MHA HAMP program has been extended to December 31st, 2016 so you are covered by that program.
  7. Aspie Mom

    Aspie Mom LoanSafe Member

    If my loans are NOT owned by Freddie or Fannie is HAMP going to be my only option?

    My first is owned by CITI and the 2nd by BOA.

    Also, when calculating out the ratios is only the 1st mortgage considered? If so, my first will be somewhat affordable. It's the 2nd that's going to push it over the edge for me. Is that taken into consideration?


    Thank you for the information. I've been trying to years to get these loans modified to a traditional 30 year fixed rate with no luck. I bought in 2005 at the height of the market so I've been underwater for years and years now. Because of that I have always been hesitant to pay on the principle as it seemed like throwing money in a black hole.

    The existing interest payments are just over $500/mo now because my interest rate is based on a spread over Libor. Does the 'payment shock' exist in a situation where you go from interest only payments to a required P&I payment? My main concern is being able to afford it when it resets to a 20 year amortization, especially with an AR.
  8. LoanModHelpCenter.com

    LoanModHelpCenter.com Michael Nazarinia Loan Workout Expert 877-747-2969

    Aspie Mom - you're very welcome.

    in our experience when a loan adjusts to a principal and interest mandatory payment from the interest only payment option period, the payments get amortized over 20 years if the loan was a 10 year interest only 30 year fixed and this always causes a payment shock to the borrower paying only the minimum interest per month.

    its easy to calculate the payments you are set to adjust to if you can send over or post the details of the kind of loan you have by looking at the NOTE and the adjustable rate rider to the NOTE.
  9. Aspie Mom

    Aspie Mom LoanSafe Member

    I've got a pretty good idea of what my payments will go up to based on the interest rate currently. The interest rate is adjustable so every 6 months I have been holding my breath, although it's been incredibly low these past few years.

    Since I do not have a Freddie or Fannie will the HAMP program be my only option?

    When looking to modify do both my 1st and my 2nd get taken into account for the DTI ratios?

    My first is not underwater and would actually be affordable even with a reset to a 20 year am.

    Its the 2nd that's partially underwater that will push my budget beyond what I can manage. That loan also has a higher interest rate and is adjustable until the end as well.
  10. LoanModHelpCenter.com

    LoanModHelpCenter.com Michael Nazarinia Loan Workout Expert 877-747-2969

    no -the HAMP program is one option, it is an umbrella of 4 programs, HAMP Tier 1, Tier 2 and Tier 1 PRA and Tier 2 PRA.

    the in house proprietary mod option is another option as well, such as a cap mod where the past due is added to loan amount and payments go up a bit due to the past due.

    another in house mod type is the rate/term or term/rate mod whereby the waterfalls are similar to HAMP, but the restrictions are fewer so more people are eligible.

    out of every 5 mods that come out each month, only 1 of them is a HAMP mod the rest are in-house or proprietary or fannie or freddie standard mods.

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