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Should I still make partial payments?

Discussion in 'Loan Modification' started by rlarkski, Dec 8, 2010.

  1. rlarkski

    rlarkski Guest

    Well, I've come to the conclusion that nothing will get done in a reasonable amount of time if I'm current. My first attempt at modification was denied back in early 2009 because I wasn't behind. I was then told to re-apply through HAMP/MHA.....and that's were I've been for the past year. Like everyone else, my file has been "under review" with the underwriter forever. So here is my question.....do I stop paying entirely? Or do I continue to make partial payments to show that I am at least making an effort? Over the past years I've taken loans on my 401k, from family members, and I'm carrying balances on my credit cards.....but now I'm done. It's time to pay those down. Ideally I would like to get modified and stay where I'm at, but my wife and I have already come to terms with our situation, so if we end up leaving and renting a place somewhere, so be it.

    So, pay partial? pay nothing? Should I wait until I'm 90-days behind and then short sell? I've heard people staying in there homes mortgage free for 8-12 months during the short sale process....that would be nice! :) :)Any advice is appreciated.
  2. TomEason

    TomEason LoanSafe Guide Staff Member

    If I were you I believe I'd stop making your mortgage payments. That should help force your lender's hand. And, as you say, it's time to stop robbing your other assets to keep you home alive. Hopefully your lender will wake up and work with you. If not, and your options narrow, you can consider a SS or foreclosure, all the while staying as long as possible. all the while saving your $$.
  3. davephx

    davephx LoanSafe Member

    Making an effort has no effect the banks are profit making machines and want to foreclose if they can.

    If you are 60 days late you don't have the addition burden of having to prove in "imminent risk of default" but then your also closer to foreclosure.

    You need to work the numbers and know the HAMP rules.

    31% of income is affordable payment.

    But at 31% you have to have enough income to pay PITI at 2%/40 years.

    That is the HAMP rules but often ignored trying to foreclose instead of modify.
  4. rlarkski

    rlarkski Guest

    Thanks for the quick replies. That's what I'm having trouble with, because the numbers seem like they should work out. @38% PITI I could do a 3.75% for 30 years (not 40), and @31% PITI I could do a 3.25% for 40 years. Are these not reasonable workout numbers? I'm used to a mortgage in the 50-60% range here in southern CA, so even a 38% number looks amazingly good!
  5. davephx

    davephx LoanSafe Member

    Yes these seem very reasonable. They will have to come up with another reason to deny.

    I don't mean to be so negative and your numbers seem to work so you certainly should try but have to be late first.
  6. rlarkski

    rlarkski Guest

    That's not being negative at all....it's actually very helpful and provides some much needed perspective. So here is my next question. What are the most likely scenarios for me moving forward, assuming I stop paying entirely? If my short sale is denied and the bank decides to foreclose will I have about 4-6 months of "free" housing? And about 6-12 months for the short sale? I have BofA on my first and GreenTree on my 2nd....and I heard those two like to drag things out....which would definitely work in my favor. Thanks again for the advice.
  7. Moe

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

    If you are current, it is harder to qualify. Getting behind by over 60 days makes it easier to qualify, but is risky, and if your payment hasn't gone up, or your income hasn't decreased, then they won't consider your payment as a hardship.

    You need to read the rulebook, and look at it like the lenders do. They look for any reason to deny you. Most people read it looking at it trying to find a reason they should qualify. It is the HAMP 'Handbook' available for free at www.hmpadmin.com and pay particular attention to the qualification requirements.
  8. rlarkski

    rlarkski Guest

    Yep, all criteria met. The official reason I was given for being denied the first time around was that I was NOT in "imminent default".....isn't that just another way of saying "we think you'll keep paying us?" My PITI was 60% of documented gross income when I applied the first time, so I'm not sure what their definition of "imminent" is. lol.
  9. Housebroken13

    Housebroken13 LoanSafe Member

    Keep paying the first and stop paying the second if you are underwater. Greentree participates in 2MP so once you've got a mod on the first with BOA, they have to automatically modify your loan as a 2MP participant, you do not need to provide any financial information to Greentree, just simply send them the BOA mod documents for reference.
  10. Moe

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

    the definition of imminent default is less than 60 days late, no savings, and a monthly surplus equal to less than 20% of your mtg payment.

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