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Auction date set, need help to save my home(s) with IndyMac AND BofA lenders!

Discussion in 'Loan Modification' started by steven808, Dec 16, 2009.

  1. steven808

    steven808 LoanSafe Member

    I'm trying to learn about the whole bankrupcty, foreclosure, loan modification process, but I have to admit....it's all pretty overwhelming. Especially when I'm trying to re-start my business at the same time!

    I'm going to hopefully expedite the learning curve by asking you all to help me "think out loud" what my options are and how to KEEP MY HOMES!!!

    Keep in mind that this is my first post and I've only now came across this AWESOMELY INFORMATIVE site last night. So I encourage you to ask me questions at any time to help me...help you...help me get through this. Strangely, I feel like I already have a bond with you guys, knowing that you're going through, if not, gone through the stressful time I'm experiencing. Ok, so onward with my problems....

    My current financial situation monthly income (Self-employed):
    - Recurring rental income: $2,100/month coming from "semi-rental" property, loan by BofA. I say "semi-rental" because I share the home with other by renting individual rooms out.
    - Potential rental income: $1,100/month coming from "semi-rental" property, loan by IndyMac. I say "potential" rental income because I will only rent the rooms if I can do a loan mod and keep the house.
    - Recurring income: $0/month I'm still in the process of re-building my business that went under back in '07. I'm not "officially" open for business yet.
    - Ad hoc income: $500/month I'm not "officially" open, but I do have old clients from '07 that I continue to support. fyi, I'm a computer consultant.
    - Flexible income: $400/month from mommy. Mommy said she can 100% help me for that amount. I want to do this without her help. But if push comes to shove, I can/do have access to this income.

    My current financial situation monthly expenses:
    BofA: $2,130/month
    IndyMac: $4,770/month
    Elec: $120/month
    Water: $20/month
    Food: $150/month
    Business expenses: $100/month
    Note: I'm getting a lot of outside family help right now, so my expenses are at the bare minimum right now.

    My current BofA loan terms as of 11/27/2009:
    - Principal Balance: $343,735.57
    - Original Loan amount: $337,250.00
    - Margin: 3.250%
    - Interest rate this month: 8.750%
    - Remaining Term: 29 years, 3 months
    - Past due amount: 37,028.52
    - Fees due: $1,332.50
    - Minimum monthly payment: $2129.57

    Note: I'm behind by about 17 payments! Loan status is in "Pre-foreclosure" w/ no sale date set. Average depreciation in my area is 30%, so market value will be around $262,500 from the appraisal at time of purchase in '06.

    My current IndyMac loan terms as of 12/16/09:
    - Principal Balance: $594,157.41
    - Interest rate this month: 7.750%
    - Past due amount: approx $104,918
    - Minimum monthly payment: $4,769.18

    Note: I'm behind by about 22 payments!!! Loan status is in "Active" foreclosure with a sale date set for 1/29/10! Once again, 30% depreciation in value, market value for this home is approx $630,000 from the apraisal at time of refinance in '07.
    I'm in the process of filing chapter 7 bankrupcty. I was hoping on doing a loan mod first, then file bankrupcty, then get my life back in order. But due to the sale date set for the IndyMac house, this might flip the script and I might have to file bankruptcy to stop the sale from happening. That will hopefully by me time to get my business up and increase my income. Which i'm hoping will help get approved for a loan modification.
    I'm filing bankrupcty because I've got about $90,000 in credit card, car loans, and other misc bad debts that I simply can't settle. But if I need to file chapter 7 to save my homes, I will!


    Other info:
    - I don't have any '06, '07, '08 tax returns. How badly do I need them?


    My question to you:
    - How can I stop the auction date from happening?
    - How can I save both homes?
    - How can I properly complete a loan mod application with income/expense figures that will give me the highes likelyhood of approval?
    - I'm not sure whether to overstate or understate my income because I do have a lot of flexibility.
    - And I'm not sure whether to overstate or understate my expenses for the same reasons.
    - Is the timeline sufficient to complete everything in time to save the homes?
    - I have two homes, and I'd like to keep both. BUT, if I can't then either one could be my primary residence. When doing the loan mod for each lender, should I treat that loan as if it was my primary residence?


    So, that's my current situation. All you experts out there, please assist in any way you can. I am at the mercy of this forum.
  2. Hopefull2009

    Hopefull2009 LoanSafe Member

    Hey and welcome. You've certainly come to the right place. Everyone has their own story, but end goal is similar - save our homes.

    So .... technically you only have $900 month income right now (without the rental income?). Is that right? If so, I think with 2 homes you're going to need substantially more income (that is documented).

    To save your home in Chapt 7 you'd need to be up to date with your payments. With a Chapt 13 you could roll the back payments into your repayment plan, but you'd need to have a decent income to support the payment plan.

    As far as overstaing/understating income, you'll need to provide documentation for all of that including tax forms and IRS 4506-T forms. For HAMP modifications, they do take into acct your min monthly payments that show on your credit report for cc and loans, etc. Basically your expenses only play into the back end DTI under HAMP.

    Have you even approached your lender yet about modifying? It's a LOOONGGG process as you'll see as you read through the different posts.

    I'd get comfortable here and plan on making this your FT job (learning everything you can about the mod process and then the application stage) since it appears that time is definitely of the essense here.
  3. Hopefull2009

    Hopefull2009 LoanSafe Member

    Your post title says you have an auction date set? I don't see that in your information though (it's been a long day though and maybe I'm missing it?). Do you have a sale date? How close?
  4. steven808

    steven808 LoanSafe Member

    I guess that depends how "technical" you get, haha. The $500 income isn't dependable at this time, who know's what it'll be next month. And the $400 is like "last resort" income. I think of it as my "fudge factor" for qualifying for a loan mod. Hopefully, that amount will help me.

    How much income would I need to suffice keeping both homes?

    My priority has been on getting my business up and running as fast as possible. I was hoping that once I get the business up, I'd have documented income which would provide me the ability to do a loan mod.

    So if I don't have documented income at this time......do I have a prayer at:
    1) getting the house off the auction block?
    2) getting approved for a loan mod?

    I haven't gotten to any details with my lender about doing a load modification. I wanted to get my ducks all in a row before I did. I guess, I need to figure out which ducks they want, and in what order they want them.

    I'm about 2 weeks away from getting the business back up. And then I'd need a couple months to get it profitable again. Luckily, it wasn't the economy that caused the business to go under. It was my own fault. I was actually working too much and got burnt out, so I stopped working. So I'm fairly confident that I can make money again, I just need some time to get my name out there again.

    I'm ok with the LOOOONG process, as long as they won't foreclose on me during the LOOOOONG process. I guess that's my main concern right now.

    Like I said, I believe that if I can delay the sale date a few months, that'll buy me time to get my business back up and get documented income sufficient for loan modification standards.

    Am I filing bankrupcty incorrectly? The attorney I have said I shoudl file a chapter 7. Are they wrong?

    Thanks for your comments, anyone else want to ring in?
  5. steven808

    steven808 LoanSafe Member

    I think I left that out, that's pretty important information huh? Yup, my mind is all over the map right now.

    The sale date is set for 1/29/10.
  6. Hopefull2009

    Hopefull2009 LoanSafe Member

    As far as income that'll be needed, I couldn't even begin to guess. I think the problem you're going to run into is the 2 properties. You can approach each lender separately, but they're going to know there are 2 homes. Also, if you're going to attempt a HAMP mod, this can only be on your primary residence where you physically reside (and, yes they check on you).

    The bottom line is, there is going to be a lot of paperwork and a lot of documentation involved. Gone are the days of "winging it" as far as paperwork goes. You'll need to dot your i's and cross your t's and everything will be verified MANY, MANY times. LOL - Read these forums - you'll send your document package in umpteen times and then the requested updates on income, etc. because it takes them so long to review the orig ones you sent in. If you are able to get a mod offer, they'll be some sort of trial period where you'll have to make ontime payments for a period of time - not one day late. It's very overwhelming a full time job in itself for sure.

    I'm surprised that being as far behind as you are they hadn't approached you earlier about a workout.

    As for the bankruptcy situation - my understanding is that to keep your home in a chapt 7 you need to be caught up on your payments going in. Chapt 13 is what most file to stall a foreclosure. Here, you can roll backpayments into your plan and continue going forward. Perhaps your BK atty would be able to help negotiate a mod of some sort even.

    For the immediate sale date - filing the BK would halt that, but you'd have to check with an atty on how long.

    You also note you have an attorney - what are his/her suggestions about all of this?
  7. steven808

    steven808 LoanSafe Member

    I'm not hiding the fact that I own 2 property's. I feel like I'm in a catch 22. If either house forecloses, I'm going to live in the other one. So I'd like to approach BOTH loan modifications as if I'm living in there. Should I not? And the house I currently live in (IndyMac one), that house is where my home business is...BUT, it's also $4,700/month mortgage right now. So the BofA house would be much easier to get a loan mod, but that's not the house I want to keep, but it is the one that's brining in the most income. Infact, it's bringing enough income to barely cover the mortgage. But I dont have enough funds to bring the loan current, so I didn't want to throw good money at bad money if the home was going to foreclose on anyway.

    So how do I approach both lenders? I need the BofA loan to be modified, so that the excess rental income can be used toward the IndyMac loan. Because it's the IndyMac loan that I really want to save. It's the home I grew up in. :(

    I'm fine with paperwork and being persistant. Hell, I'll send them updated financials every week whether they ask me or not. If that'll help. :) And if I get a mod offer, I know I can make ends meet. I just need the opportunity. My family is a little well-off, so I know that they'll always have my back if I need them. But personally, they're my last last resort.

    They have approached me and they still do. But it was never about a loan modification, it was more collections based. But at the time, I was making zero income. I didn't see any point in having any dialog at the time. My main priority was to get my business back up. Once I had about 6 weeks of documented income, that's when I was going to get in touch with them and go full blast on a loan mod. But it seems that I've run out of time. So I want to buy myself some time.

    About the bankrupcty, the attorney basically said that we're filing a chapter 7. I don't know the differences, that's why I went to them. :) But she said that I'll only lose the house in bankrupcty if there is equity. So said there's no equity in either home, so there's no worries about it being liquidated.

    What are my options to roll backpayment into the loan to bring me current? I'm pretty sure I can't refi, haha.

    But the last thing I want...wait make that second to last thing I want...is to file bankruptcy and then immediately start missing mortgage payments again. I guess the very last thing I would want is to lose both homes. :(

    And unfortunately, the attorney I have basically said that the loan mod is beyond the scope of filing bankruptcy and I should consult with a loan professional.

    Can't wait to get more responses!
  8. steven808

    steven808 LoanSafe Member

    Did a little research on chap7 vs 13 BK. And I think my attorney went the chapter 7 route because I don't have steady income. And don't plan on having it for at least a couple months.

    BUT, I guess that all depends how you define "steady income". I guess I do have steady income right now. Steadly at $0/month, haha.

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