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Ocwen loan modification

Discussion in 'Loan Modification' started by minders, Aug 2, 2013.

  1. minders

    minders LoanSafe Member

    I walked away from my upside down condo in northern California and stopped paying both mortgages after closing on a house I bought with my husband in August 2012. I own the condo alone, and I received 100% financing and both mortgages were taken out for purchase price only. As of August 2012, the first mortgage of the condo was serviced by AHM and the second by Ocwen. The first and second are now both serviced by Ocwen, and the first loan is owned by Deutsch Bank. Since I walked away, I have received daily phone calls from Ocwen, none of which I have returned. The condo also has been rented since I moved, disclosures were signed by tenants regarding the mortgages being in default, and I have maintained my payments to the HOA.
    As the value of the condo is starting to increase, I recently answered a call from Ocwen and began the process of loan modification. I explained I needed to complete the HAMP application for rentals, and told them the condo is currently empty and I've moved to another residence that I own with my husband.
    My income allows me to pay both mortgages on the condo with no hardship, and my concern is that since Ocwen is now servicing both loans, how do I prevent my financial information from being disclosed in the negotiation of my second mortgage. According to their website, the balance on my second is zero, but I have received no documents stating this. If I am to follow the advice given on Strategies for Settling Second Mortgages, I want to prevent my financial information getting disclosed in the modification of the 2nd. The letter sent from Ocwen with HAMP application has the loan number of my 1st mortgage on it, but I'm not sure if the information I provide will only be used for the first mortgage modifiication.
    They have also set up an appointment with me for August 15 to speak with a loan relationship (?) counselor on the phone. Should I keep this appointment, and how can I make sure the information I provide to the counselor will only be used to work on modification for the 1st mortgage?
    I'M IN THE THICK OF IT, AND JUST WANT TO MAKE SURE I PLAY ALL MY CARDS RIGHT...THANK YOU, THANK YOU, THANK YOU!!!
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Hello Minders,

    First off, you do not want to state that the property is empty if you are working to modify the mortgage on the property. For rentals (non-owner occupied), you must either have a renter in place or intend to rent the property out to qualify for a modification. Although the 2nd now shows a $0 balance, it's likely been charged off and sent to a collection agency to handle the account. Here in CA they are legally barred from using you on a purchase money 2nd so I would not be worried about your financial information being disclosed. The only real recourse the 2nd has is if property values continue to rise and there's enough equity to satisfy the first lien and all foreclosure costs associated with the event. This is highly unlikely as it will cost approximately another $20-40K+ in fees for the 2nd to foreclose.

    New HAMP guidelines

    Modification of Loan Secured by Rental Property:


    A borrower seeking to modify the mortgage loan on his or her rental property must provide evidence of that income, which is generally documented on IRS Schedule E (Supplemental Income and Loss) of the borrower’s tax return for the most recent tax year. When Schedule E is not available to document rental income because the property was not previously rented, servicers may accept a current lease agreement and bank statements or evidence of damage deposits. All net income or loss from a rental property that is security for the loan being modified as well as income from any other rental property owned by the borrower must be documented and included in the calculation of the borrower’s gross income.

    The monthly net income or loss on a rental property to be calculated for HAMP Tier 2 purposes should be 75 percent of the monthly gross rental income, reduced by the monthly principal and interest payment plus 1/12th of annual real property taxes, annual insurance premiums and annual homeowners’ associations dues, if applicable (PITIA). If 75 percent of the monthly gross income of a rental property securing the mortgage loan being evaluated for modification under HAMP Tier 2 is equal to or greater than the pre-modification PITIA of the rental property, the servicer must verify and document the cause of the borrower’s hardship as delinquency alone is not considered a hardship.
  3. TomEason

    TomEason LoanSafe Guide Staff Member

    minders

    Thanks for your post. And congratulations for having accomplished the most challenging leg of your "buy 'n bail;" IMO, it's a very savvy move. Since both your loans on the condo were purchase money loans, they're non-recourse, meaning the lenders are legally barred from coming after you for any deficiencey. So, IMHO you have no problems whatsoever, and are in a very favorable position. If it were me, I'd have handled this the same way. You needn't be concerned with settling with your 2nd lender. Once the 1st lender finally gets around to FCing, your 2nd will become a non-recourse SOJL, and you will have collected and saved a whole bunch of rental income. I recommend you never again communicate with either lender. Enjoy!
    Last edited: Aug 2, 2013
  4. minders

    minders LoanSafe Member

    thanks Tom, but at this point, the condo is starting to become a little more desireable to rent for the long-term, and instead of going into foreclosure, I'm hoping I can modify my loan to get my 1st modified, and my 2nd settled for pennies on the dollar. What is the best way to handle this scenario since both loans are now serviced by the same company, Ocwen?
  5. TomEason

    TomEason LoanSafe Guide Staff Member

    Hi minders

    Thanks for your post. If you want to keep this property as a rental, simply submit a loan mod app to Ocwen. Under HAMP Tier II rentals are fine. I recommend you NOT make any payments on your 2nd at all. In fact, if it were me, I would pay no attention to the 2nd until after the 1st is permanently handled. And it matters not a wit that Ocwen services both loans. Ocwen owns no loans; they are only a servicer. Most likely your 1st and 2nd loans are owned by two different investors; the lenders don't communicate with each other about their respective loans. After your 1st gets modified, then you can seek to settle your 2nd by following the guide at post #1 of the following thread. Good luck. http://www.loansafe.org/forum/debt-settlement/37996-strategy-settling-your-2nd-94.html

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