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Help, I have a contract now for WAMU/Chase.

Discussion in 'Short Sale Outpost' started by JessPhil, Sep 27, 2008.

  1. JessPhil

    JessPhil LoanSafe Member

    Our situation is this:
    We have 2 investment properties on the beach in FL.

    The first one:
    The info below is from a refinance we did in 2006 to get a fixed interest rate.
    We owe WAMU (Chase?) $312K at 6.625 on a first and 23K to WAMU (Chase?) on a second at 9.24%. The most recent payment shows $1726.78/int and $322.22/principal. The second is at $229/per month.

    In the last 90 days there has been sale of a condo like ours for $190K.

    This condo rents, but we have to add thousands of our money every year to float it. We expect rental income to begin decreasing not increasing.

    It will be years, if the price ever returns to the 330's. We would love to short sale this one but my husband cannot take the hit of the mortgage company calling his employer. We are current on payments.

    The 2nd investment property:
    If it sold it right now, we might be able to break even or get a little of our down payment back. We owe $245,718 at 6.625% to BB&T. The most recent shows $1357/int and $228/principal. We are current on payments.

    This condo rents very well, doesn't cost me too much out of pocket and we would like to keep it but we know if we don't sell now we will be looking at a negative on it in a few months.

    We expect rental income to begin decreasing not increasing.

    1. We cannot have mortgage companies calling my husband's employer. I assume they do this with a short sale or a foreclosure.

    2. Should we get out of #2 while we can? I probably know the answer to this one.

    3. If we felt like the rents would stay up, we could probably continue to carry them both by putting every dime of our income into them. We don't really want to keep #1. The vacation rental income has decreased for eveyone in my owner's networking group from 2007 to 2008.

    4. Does anyone see a way with #1 that we could do a loan modification that would make a drastic difference so we could ride this out for a few years instead of taking a chance on losing our jobs an credit rating?

    5. Any modifications on #2 to help overall situation?

    Thank you!
  2. schwefls

    schwefls New Member Guide & Litton Success

    Re: Short Sale or Loan Modification

    Hi Jess welcone to our forum:

    I wanted to stop in and say hello. Someone will be reaching out to you with advice/suggestions. :)
  3. Moe

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

    Re: Short Sale or Loan Modification

    Hi JessPhil,

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

    You would need to start the process by putting together a hardship letter and an income/expense sheet (there are examples in the Homeowner Tool Box to the left of the forum) then contact WaMu and let them tell you what options are available from the investors on the loans................if those rates are either fixed or interest only, a modification might not help.................so call and see what they can do for you.......

    Washington Mutual
    Loss Mitigation

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

    JessPhil LoanSafe Member

    Re: Short Sale or Loan Modification

    What is the maximun years they will write a mortgage?

    What would be a reasonable interest rate to ask for on a loan modification, right now?

    If I could get them to add the 2nd mortgage to the first and restart at 30 years my P&I would decrease by appr $232/mnth.

    If I could get them to add the 2nd to the first and restart at 40 years my P&I would decrease by appr $387/mnth.

    If I could get them to add the second to the first and decrease the interest to 5.6% for 30 years, my P&I would decrease by appr $455/mnth.

    If I could get them to add my second to the first and decrease the interest to 5.6% for 40 years, my P&I would decrease by appr $627/mnth.
  5. ProfessorShays

    ProfessorShays LoanSafe Member

    Re: Short Sale or Loan Modification

    The asset sale of Wamu to JP Morgan Chase will undoubtedly impact the direction your situation would have gone had Wamu survived. Unfortunately at this point it is simply impossible to tell the effects of the change.

    I'd follow CAT's suggested approach and begin you negotiations process as soon as possible. Recognize that the decision making process will probably be modified with this change in ownership so it may take more time to get to a conclusion to your negotiations process. My sense is the lender will probably suggest a shorter period of resolution and you might get a more favorable response in structuring the negotiations to meet your short term objective (lowering the payment through a 40 year amortization) if that change does not last for the entire 40 years. One thought would be setting the payment at an amount based upon a 40 year amortization for the next 5 years. While that approach is certainly not as good for you, it might be an easier sale to the lender.

    Take care,

  6. ProfessorShays

    ProfessorShays LoanSafe Member

    Re: Short Sale or Loan Modification

    News reports suggest "JP Morgan plans to write down Washington Mutual's loan portfolio by about $31 billion." Write down reflects ownership. So it is simply a matter of chance as to whether or not Wamu was the investor. Even if they were, coordination between the separate departments that handle first loans and second loans will be challenging.

  7. lotto44

    lotto44 LoanSafe Member

    Re: Short Sale or Loan Modification

    Hello JessPhill and Prof.

    Jess, I am in a similar situation. I have two investment properties in Tampa Fl. One of my properties is very much up side down and the other is not as bad but is renting very poorly. In the sense of not getting as much as I need.

    I was first going to try to Modify the first loan but with it being approx. 50K upside down and negitiving on the rent it just doesn’t make sense to keep negitiving on the rent and be down 50K as well. It would take me quite some time to recoup my cost not including the money I am losing on the rent to keep the property. That is even if I can it them rented.

    Now I am still concerned that even if the company I am using to short sale the property negotiates a good deal with the bank their wont be a buyer? They say that isn’t probable but it could happen. If that happens it would go into foreclosure which scares me.

    The short sale would hurt my credit but the gold star of good credit doesn’t mean much if I am not able to buy anything because I am always paying for these properties.

    Jess and Prof....what do you guys think?

  8. JessPhil

    JessPhil LoanSafe Member

    Re: Short Sale or Loan Modification

    I still have a difficult time with they fact that if my mortgage was for the amount someone else will buy it for, I could afford it.

    I definitely understand. My thoughts are that you should probably get out if the property values are continuing to decrease there. I made the mistake of thinking things would turn around. In PCB, over building started the decline in values, but everybody kept thinking prices would go back up after the new airport comes in. The problem is, the decline is larger than many people ever expected.

    I have placed Property #2 on the market. It is a really nice condo with the best floor plan on the beach. The values are dropping daily, so it probably will not sell until the values are so low that we won't be able to afford to sell without a SS on it. We have a little room before it would sell for less than we owe. I have grossed 35K on it since Feb, so I'm not really too concerned. If it weren't for falling values, I wouldn't sell it at all.

    On Property #1, we got a letter saying Chase did take our mortgage in the buyout. Our WAMU file has a notation in it saying we contacted WAMU about the short sale, so I'm a little surprised Chase wanted it. I read somewhere Chase was not going to take all mortgages.

    I have really struggled over the SS decision. I told my husband tonight that doing something like that is completely against my grain. We are underwater by at least $145K, I think it would actually be about 20K more, if it even sells.

    I also have worries that it won't sell at all.

    My P&I plus escrow is about $30K per year and I expect to be at about $17K operating expenses. I will be out of pocket by $19K, because rent is down to $28K in 2008, so far.

    When it is all written down like this, I guess the only reason for not doing a short sale is not liking the idea of it. I should really try to come to terms with that and stop throwing away $19K a year for a property that is only worth about half what we owe on it.

    Does anyone have a suggestion on whether we should get an attorney for this? My understanding is that FL is a recourse state.

  9. JessPhil

    JessPhil LoanSafe Member

    Re: Short Sale or Loan Modification

    One more question. We are now going to be dealing with Chase. I realize we are not supposed to have cash reserves but we have not lost our jobs or anything. My employer is going to change my status from an employee to self-employed. Maybe, that could be considered a hardship. I have also been told that declining rental income from the property is also not a good enough reason, but I don't understand why less rental income would not be a hardship reason.

    Please, does anyone have any thoughts on hardships for second homes/investment properties?

    Thank you!

    Has anyone just used declining property values as a reason for Short Sale? I read somewhere that the reason could be simply that the property has declined and by all indications will continue to decline, so a short sale now would keep the mortgage company from losing even more money in the event of a foreclosure, later.
  10. JessPhil

    JessPhil LoanSafe Member

    Has anyone been able to do a short sale with Chase while current on payments?

  11. JessPhil

    JessPhil LoanSafe Member

    I posted back in October and received a great amount of help in deciding what to do with my rental vacation properties. (See below for "SS with Chase While Current")

    My lender is WAMU, but Chase bought them. It is a Freddie Mac. We did receive a letter from Chase stating they would be taking our 1st mortgage. I contacted WAMU and got permission to list as a Short Sale. I now have an offer on it. The offer is a good one. My offer is $10K above what one proerty is listed at, the same as another property is listed at, and $1K above a recent sale.

    I am completing my SS packet, now. It gives me a WAMU CA address and the phone number is: 866-926-8937. Is it possible that this packet is no longer good if Chase has taken WAMU over in the last few days?

    I have a 1st mortgage with WAMU/Chase? for $312K and a 2nd mortgage with WAMU for 23K.

    After sending my SS packet to the WAMU address in CA, should I try to send a copy of my packet to a supervisor letting them know that the prices are dropping fast and that if the buyer does walk, the next offer will be lower because there are properties listed for the same and lower than my contract amount for the exact same condo? Does anyone have a phone number of fax for a supervisor that would be helpful?

    My SS packet does have a 3rd party disclosure for my realtor to speak with them, but I plan to call 2-3 times per week, myself (read that here).

    I was current on my payments until I missed the December 1 payment.

    Any advice, phone numbers, email addresses, etc would be greatly appreciated.

    Thank you!
  12. Moe

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

    When dealing with a short sale...........it doesn't work quite like a modification.............in essence.............the saying too many cooks spoil the stew would apply. This is why in a short sale in almost every case the lender requires the seller to hire a real estate agent well versed in short sale negotiation that knows what they are doing................things tend to go smoother that way. So unlike a modification where the lender prefers speaking with you as oppose to a third party...............with a short sale they prefer speaking with the agent that understands the logistics of the contracts. You need to get the authorization in for your agent right away so that the contract can be submitted to the investor and the BPO and title can be ordered.......the number they provided should be the number to the short sale dept...........and that is where you should get the contact person your agent will be dealing directly with.

    The number given should be a good one...........but call to make sure before submitting the package.

    Good Luck with the offer being approved!!

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