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Trying to stop Wells Fargo foreclosure.

Discussion in 'Wells Fargo - American Servicing Company (ASC)' started by srjth, May 27, 2009.

  1. srjth

    srjth LoanSafe Member

    First I want to say thank you so much to Cat and the other helpful people who have established this forum. I have learned so much from just browsing around and it really helps to know what others have done and that I am not alone.

    Onto my situation...

    I have a foreclosure date set for 6/28/09. I have been waiting for Wells Fargo's Loss Mitigation dept to notify me and tell me if they will modify my loan or set up a repayment plan. Anything to keep my home. I was really hoping to get into the "Making Home Affordable" plan but I was told by Wells Fargo that my loan has a private investor (and it's not FHA) so I will not qualify for that program, even though I have suffered a loss of income and am behind on my payments. Is this true? Is there any way that I can get into the Making Home Affordable plan any other way, perhaps through NACA or some other lender? It would really help to decrease my monthly interest rate, as my current payment is interest only for 10 years and is already 37.5% of my gross income (I'm in California). I have already sent Wells Fargo proof of income, monthly expenses and a hardship letter.

    What can I look forward to Wells Fargo doing?
  2. srjth

    srjth LoanSafe Member

    I want to clarify that Wells Fargo Loss Mitigation has not gotten back to me yet. They are still in the process of reviewing. I was just advised my their foreclosure dept that currently private investor loans were not participating in the Making Home Affordable program. That really bummed me out when I heard that. I really wanted to get into that program. Actually, I just want to stay in my home but to do that I have to get my payment down and this seems like the only way, at least that I know of. Any advice?
  3. Moe

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

    You would need to ask what the other options are that you have.........
    try contacting the executive team and see if they can give you an update on your file......
  4. srjth

    srjth LoanSafe Member

    Thank you. Calling them now....
  5. srjth

    srjth LoanSafe Member

    I called the executive team and they told me that I need to continue to wait for the negotiator to get back to me with all of the options. She said that my loan is back by various private investors and that WF has a program in place that is in the spirit of the Making Home Affordable program, but I am skeptical of WF now after reading some of the stories here. I'm afraid that I will wait with hope for 5,6, 7 months like others have and they will ultimately come back with a denial. I would like this settled. Are there any other options besides Wells Fargo available to refinance or remodify or even set up a repayment plan?
  6. Moe

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

    modifications will have to be done through the servicer...........as far as refinancing..........you can not be in default for that option.

    unlesss this is the only property that you own...........you can try going through NACA...........they are a HUD certified counseling agency and the services for their Home Save modification are free.............but the investor will still have the final say and the timeframe will be about the same due to this fact..........

  7. srjth

    srjth LoanSafe Member

    Thanks. I have a phone appointment with NACA tomorrow morning. Will update after that.

    A couple of question, please: Do lenders remodify using interest only loans sometimes or are they trying to get away from that now? As the borrower, do I have any say on which option/program I would prefer to be in (i.e. will they offer me more than one option if it's possible?) or at this point, am I completely at the lender/investors mercy as to which option they offer to me, take it or leave it?
  8. Moe

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

    Most do not put homeowners back into interest only loans when modifying because once they amortize, the homeowner will be back to the same scenario...............they were a subprime product and it wasn't a realistic assessment of what the buyer could actually afford at the time..........they were used to qualify borrowers for more home than they could realistically afford.

    A modification is used to try to get to a more affordable payment that includes Principal, Interest, Taxes, and Insurance.
  9. srjth

    srjth LoanSafe Member

    Spoke to NACA. They are wanting to submit my file to Wells Fargo to see if they can get an answer. NACA says they have an agreement with WF to work together. The thing I'm concerned about is that these modifications seem to be geared towards buying people a little more time to make more money so that they can afford their loan, but my question is, what if a lot of people don't get the money they need to afford their payment after that temporary time period passes and then their payment amount goes up again? In other words, are lenders simply putting off the problem we have right now for another 5 years?
  10. srjth

    srjth LoanSafe Member

    I'm also wondering of if any lenders are modifying second mortgages at this time. Any feedback on this would be appreciated.
  11. srjth

    srjth LoanSafe Member

    Just thought I'd come and update on my situation with Wells....

    The negotiator finally got back to me by phone after 5 months with an offer in Sept 2009. The negotiator called me and offered to put me into the 3 month forbearance program to see if I can make my regular payments still (which are interest-only) and then at the end of that 3-month period, I would need to pay a lump sum of what amounted to roughly 20% of the amount I am behind on and the rest that I am behind on would be added to my existing loan. I was told that what that would look like for me is that I would pay my normal interest-only monthly payment of $2000 for 3 months (interest rate would stay the same) and then I'd have to come up with around $13K as a lump sum to start the new loan agreement, which would state that monthly payment would remain the same but the unpaid balance of $52K would be added onto my existing loan balance. My loan was interest-only fixed for 10 years, set to go to adjustable rate + principle in 2015. According to the negotiator the terms of the loan would stay the same, including my payment amount until 2015.

    I told her that I wanted to stay in my house and that I could make my payments and come up $13K but that's all I had. She assured me that this would be enough and that the rest of the unpaid balance was going to be piggybacked onto the loan principle. I asked her if I could get this in writing because we were just talking about it on the phone and she said no but that this is how they normally do it and that I would receive paperwork stating exactly what she said after I had finished my forbearance period with 3 paid on time.

    At first I was disappointed that they didn't lower my interest rate or payment amount or lower the unpaid balance at all. They did nothing except offer me the same loan terms with my unpaid balance just added in. They didn't even take me out of the interest-only program and offer me a conventional loan but I came to terms with it and was content to just be able to stay in my home. I figured at least I'd put losing the house off for another 5 years and by then my kids will be older and it would be easier for us to move. I jsut accepted that this was how it was going to be.

    Fast forward to today... I have made the 3 payments on time and just waited for the new loan agreement documents to arrive in the mail. Well, they arrived today and the terms are NOT what the negotiator promised me they would be. Instead of having to make a lump sum payment of $13000 to start the new loan agreement, the docs say I have to make a $30,000 lump sum payment! This is not what the negotiator told me! She told me I'd have to pay 13K.

    I am so disappointed. I do not have $30,000. :mad:

    I called the loss mitigation department but it was around 6pm PST on a friday so the negotiator was not in but the gentleman I spoke to told me that that number looked way too high. He said he's been with wells for a while and that he had never seen someone in a forbearance program be asked to pay an amount that high. He said it could be a mistake and he left a message for the negotiator to call me on Monday. I really hope it was a mistake. :(

    At this point I'm really upset and afraid that they are going to tell me that I have to come up with $30K or else my house will go back into foreclosure. I really don't understand why they increased the lump sum amount so much from what they told me it would just 3 months ago when I started the forbearance program. If I had known that it would be 30K I would have never gotten into the forbearance program because I dont have 30K! I was very clear in my hardship letter and with her on the phone that I couldn't only come up with 10-15K. She said that was fine. I don't understand why they made me such promises.

    Does anyone have any experience or advice on this? Can you tell me if Wells will negotiate this amount down? My loan has a private investor and is not fha. Would it help if I get an attorney? Is there anything I can do? I did all this alone and without NACA or the help of anyone else.
  12. stillhoping

    stillhoping LoanSafe Member

    srjth - That is truly horrible!!! This is the problem, they say one thing on the phone to buy time and do what ever they want at the end of the forbearance. Your private investor is probably the same as mine - which I later found out is Wells Fargo!!!

    Thanks to another member, I got this Mike Heid - CEO of WF, August 4th press release:
    “We encourage all servicers and investors to participate in HAMP so struggling borrowers can be assisted in a consistent manner,” said Heid. “Further, we believe the administration’s ‘second look’ process – through which Freddie Mac will audit declined applications – will promote additional transparency and will help ensure all participating servicers across the country are doing all they can to prevent avoidable foreclosures.”

    I have confirmed the Wells Fargo is the investor on my loan. I was told that while that's how it's listed, it's really a group of private investors, however under the name of Wells Fargo.

    How can Mike Heid encourage the services and investors to participate when they aren't even participating in their own investments. Also, thanks to another member, I got access to Wells Fargo's CTSlink, which lists all the modifications they are making on a yearly and monthly basis. Through this site, I noticed that 80-90% of the loans they are modifying are still IO loans.

    When we received our in-house forbearance, we were told it was structured very similar to the HAMP program and was going to be 3.93%. Our IO payment at the time was very similar to yours at 37.5%. We experience a 20% increase in income during the forbearance. (Under HAMP we would have still been approved a final modification since our income hadn't changed by more or less than 25%.) However, the in-house modification, supposably structured similar to HAMP, does not comply with this rule. Never mind that we waited ten months with payments we couldn't afford, and got ourselves in a big debt hole while waiting. The 20% increase is not sufficient at this point to unravel the mess. (Had they worked with us from the beginning, we would be in much better shape today - even at a temporary solution for 1 year to be reviewed a year later....which is not part of their options.)

    I like you, have learned to accept they are not going to do anything for us at this point. We are scrambling, pinching numbers trying to see if we can come up with any other options, besides the obvious foreclosure. Although, it appears that foreclosure is the most likely; especially after hearing your story. Last night we started considering their latest forbearance offer, keeping our payment the same and piggybacking the rest, and just resolve to interest only payments - but we will not dip into our reserves to come up with a big lump sum. Our reserves are currently less than 3 months salary, and I think dipping any further would be irresponsible.

    Good luck. You have a legitimate reason to fight!!!
  13. srjth

    srjth LoanSafe Member

    Stillhoping, thank you so much for your thoughtful response. I'm sorry it took me so long to get back to you but I've been out doing research on this matter and talking to people.

    Your situation does sound very similar to mine. I really feel for you. Since I made the last post I have pretty much given up. I think I'm going to walk away. WF can take this overpriced house and shove it! :cool:

    A few things to think about, stillhoping....
    A friend of mine has a similar situation as you.... she has an IO loan too. She works for the state and due to budget cuts her monthly income was less than her mortgage in 2008 but her boyfriend was helping her out financially to help cover it. She applied for a loan mod (with Chase). They denied her because she showed that in 2009 she had a small increase in income but not enough to cover her mortgage. Her income is less than (Yes, LESS THAN) the amount of her mortage payment but get this, they didn't deny her because she doesn't make enough, which would be understandable, they denied her because they said she showed an income increase from 2008 to 2009. So they think her income is steadily increasing and that she could probably afford it one day in the future. That is what they said. So they want to keep her there until she leaves herself! She also has a private investor backed loan.

    Something else another friend of mine who is going to walk away pointed out is that no matter what, the banks are going to get their money through TARP - Troubled Asset Relief Program - Wikipedia, the free encyclopedia if they foreclose on you. So they really have no incentive to modify private investor backed loans at all. If you can't cover your payment they see you as a risk and they'd rather have someone else in the home who is less of a risk. I think it was a big mistake for Obama to bail the banks out. I'd rather have seen the govt take over the banks and nationalize banking then reward the banks who made mistakes due to greed. There aren't enough checks and balances here!

    Although I hate that the market crashed, I also think the housing market is going to continue to drop until all these IO loans reset. That could be until 2015 -2017. I don't believe by that time the value of my house is going to increase to what I owe and I'll just have spent 5-7 years wasting money paying a high mortgage (since they won't modify it! :mad:). I could pay half that cost in rent every month for a nicer house! Plus I'll need that time to repair my credit.

    I called on some rentals this weekend and when I asked about how they look at foreclosures on your credit they said "Oh that's fine. We don't worry about that. So many other people have it too. We just look to see if you have other credit deficiencies besides a foreclosure." I was floored. :eek: It's almost like they don't care, which makes me very happy! :D I bet they'll easily extend credit for a car too considering that so many other people are going through the same thing. It's wild ride but I'm starting to detach from my house now which is hard but oh well. Like my friend said "It's just a house! Its not like it's your health or anything." lol

    I think I'm going to walk away and just buy again in 7 years.

    Good luck, stillhoping. I hope they do something good for you. The bastards. lol
  14. stillhoping

    stillhoping LoanSafe Member

    srjth - I would be really surprised if WF doesn't bring the amount down and piggy back the rest for you. Have you spoken to them since?

    As for TARP, I believe the government announced they are pulling out of mortgage back securities in March. I would think this is going to be harmful for the banks.

    I appreciate your thoughts on the market taking at least the same amount of time as a foreclosure will to recover. I've been going through the same train of thought. Knowing that WF is modifying 80% of their loans back into IO loans, we could have another huge wave of foreclosures 10 years from now. ? It's hard to predict the future, but it is extremely hard to imagine that interest rates will remain low ten years from now. Besides, I figure if we stay and pay IO for twelve years, our payments will go up 2k dollars...which most likely we will not be able to afford. And with being underwater on the loan, we won't be able to sell in the meantime.

    Do I want to start all over 12 years from now? Or start over now? Also, because this is such a national disaster of our times, it's very possible that foreclosures and credit scores effected will be forgiven in a shorter time.

    If we decide to walk away, we will stay until they remove us and save our mortgage payments to start a new. Our credit will be destroyed (actually already is) anyway, I'd rather walk away with an extra 30k in my pocket than 0. (Although I still need to find out about our commitment to our 2nd loan.) Or we will stay and resolve to IO payments and hope our financial situation improves.

    All I know, is it's up to us. The banks aren't going to help, so we need to go back to our old fashioned values. Cut back as much as possible, look for more income, and work hard. (Last night I cooked a recipe from a 94 year old woman that lived through the depression who does cooking videos on YouTube....it was called "the poorman's meal". lol!) The lessons are going to be hard to learn, but we'll be stronger people in the end.

    I really hope they will go back an honor the 13k they told you on the phone....if they don't, that's just bad bad business!

    keep me posted! Wishing you the very very best!

    Best of luck.
  15. srjth

    srjth LoanSafe Member

    stillhoping, thanks for responding. Everything you say makes a lot of sense.

    I just got off the phone with an agent who specializes in short sales. She ran comps on properties in my neighborhood and the decline in value is so much that it's not prudent for me to stay here. I bought my house in 2005 for $535,000 and the market has declined so much that the same exact floor models just a block away are selling for $250,000 now! It's astounding.

    Anyways, the short sale agent was very helpful:

    1) She and WF told me that when you are in the short sale option you DO NOT have to make your payments but you can continue to live in your property. A free place to stay = money in your pocket!

    2) The agent told me that the Obama plan says that anyone who's successful with a short sale, Freddic Mac or Fannie Mae will look at you again for getting a home loan in 2-3 years. That's not that long to be without owning a home esp in this bad housing market. We'll have to check to see if that's true or not though about what Obama said.

    3) She told me that I'd probably get an offer within 3 months but that we can drag this out as long as I need to if I need more time to find a place to live without going into foreclosure by manipulating the price we list it for.

    4). She said a short sale will show up on your credit but it will show up as "Paid in Full by short sale" and is better than a foreclosure or bankruptcy.

    5) She explain to me about how many people including business owners who own office buildings are walking away because it's just not a smart investment right now.

    Anyways, I don't know if all this is true or if she's just telling me what I want to hear but I'll be checking all these things out.

    I wish you luck, stillhoping.
  16. stillhoping

    stillhoping LoanSafe Member

    srjth - I am a licensed real estate agent, but haven't worked in 18 months with the housing crisis. Everything the agent said is true, with one word of caution - Obama's plan is not exactly being executed the way the administration had hoped. I don't think anyone can predict the guidelines for getting FHA approved loans 2 to 3 years from now. The last house I sold was a FHA loan, and they have some very strict guidelines. (Just food for thought.)

    However, everything else is true and it sounds like you are coming to a very good, sound decision.

    Good for you!
    Best wishes!!!
  17. srjth

    srjth LoanSafe Member

    Thank you, stillhoping. Yeah I'm going to have to look into how long it will take to get into another home loan.

    I forgot to add that the new mod docs state that the deficient amount ($20K) would NOT be piggybacked into the loan. That amount would be due in full when the IO loan reset in 2015. It would not accrue interest from now until 2015 though, it would just be deferred. The rest of the terms of my IO loan, including the amount due every month according to the terms of my original loan would remain the same.

    Even still, I don't have the 30K upfront right now and I was planning on selling in 5 years anyway, because I won't be able to afford the payment when it resets, but obviously I'll still be underwater at that time, so I might as well dump it now while everyone is going through the crisis and creditors/rental companies/bankruptcy judges/lenders/friends/family are more understanding right now. Plus I'll save by renting for a few years.

    stillhoping, I know it's so hard to let go. :( They (the banks, obama admin) promised us so much, and all our hard earned money's gone right down the drain. Just thinking about leaving makes me feel sick to my stomach but I'm trying to be smart about this. In 7 years, I could probably buy my own house back for less money!
  18. srjth

    srjth LoanSafe Member

    I thought I'd share this helpful PDF that my real estate agent sent me which lists all the credit consequences and credit time frames of short sale and foreclosure. This is for california.

    edit: if anyone wants it, please PM me as it has my agents name on it.
  19. srjth

    srjth LoanSafe Member

    Looking at this again, it doesnt seem to be just for california but for everywhere in the U.S. so if anyone wants it just PM me.
  20. stillhoping

    stillhoping LoanSafe Member

    srjth - I know, it makes me sick too but it is what it is, right?

    That is interesting that the piggyback portion is only until your loan resets and not at the end of the loan in 30 years. One more nail in the coffin for the housing crisis, and one more reason to think that the problem is going to continue for another 10-15 years. They seem to only be concerned with the immediate future (and even then loosely concerned), they are not putting structures in place to ensure to avoid future problems. It's quite interesting. You may not even WANT to buy in a few years. lol!

    I still haven't figured out what direction we will take. I guess since we missed our January payment, we have until Feb. to decide. It goes without saying, I think they're idiots!!! Forget the bailouts, they are just keep making poor business decisions. If I had a rental and the tenant could no longer afford the payments (in this market), but offered to pay a few hundred less, would I take it, knowing I'd at least have some income or would I tell them to get out and risk the house being vacant for several months and lose thousands? I know we signed a contract, but they would rather lose hundreds of thousands of dollars than to work with people and restructure the loans. I could understand if the housing prices were up, and they could just turn it around for a profit, but that's not what's happening. (I guess it goes back to your TARP comment, perhaps TARP has given them incentive to liquidate the investments now, while the government will cover their butts.) Ugh, just annoying!!! Time for some sound, private investors to start giving loans directly. I never want to work with WF again.

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