My Wells Fargo decision doesn't make sense

[jblyx002]

Wells Fargo offered a "moratorium" on my loan. Basically they will allow me not to make a payment until November 25th without any penalty or credit hits, but when that day comes, I owe everything that I should have paid during that time period. What the F***. I called immediately. I told the first person that if I struggle making a payment now, then what makes them think I'm going to come up with $12,000 in November? I asked for someone that can explain things better. That guy proceeded to tell me that our debt to income was too high, that if I could lower some of my controllable debt (utilities and car gas expenses is what he said) then they would consider a loan modification. I stated that that should be the other way around, they should be helping the people that are getting worse by lowering some interest or something. He explained that this "moratorium" allows me time to find a job to get back on track and someone would call me every 30 days to check on things. I can't control my utilities to the point it will make a difference. They agreed that my grocery expenses was reasonable, so I can't cut much there.

My story: I got laid off at Thanksgiving and no luck with job search, so I get unemployment each week. My wife just got cut back to part time at the end of tax season, yet we make all payments on-time (so far). Currently we bring in $3116 with a monthly debt for a family of four at $3583 (house being $1967). How do we do it? We've maxed out cards, borrowed from family, sold some land, accounting professor uncle generously gives us money since he has no debts. Now we have very little left in savings and we don't want to ask for any more help from family. We've only been in house 1.5 years.

Can somebody give me guidance? I haven't read the stimulus plan particulars but how am I being helped? It seems like this is just way for Wells Fargo to feel like they are helping people without actually doing so.

[Hopefull2009]

How long is your unemployment expected to last? Were you looking to modify under making home affordable? If so, they may possibly be waiting to use that as an option once you find steady employment with the thought if you were modified now and you unemployment were to run out before finding a job you'd be back at square one? Not trying to sound discouraging, but if that were to happen, you'd wouldn't have another shot at the making home affordable modification were you to default.

Definitely agree though - $12k due at the end of this "payment holiday" seems a little risky. If they are acknowledging the decreased income, you'd need to find major employment almost immediately to start socking those funds away.

What is your current mortage and interest rate, and does it include taxes and insurance?

[jblyx002]

I have another 4-5 weeks of normal unemployment before I can apply for the additional "Bush" extension. Yes, I want the make home affordable modification. Wait for steady employment? Nobody's hiring and how much further do I need to fall before they pull the cord? My biggest hit was that not only did I lose my job, but I lost a company vehicle with gas card and health insurance. Cobra was ridiculous. I had to add my wife to the personal health insurance which we pay around $700/month in insurance.

My mortgage is $1967, 30 year 5.25% (I think) with taxes and insurance included. It would be nearly impossible to skip these payments and make it up in November without hitting the Lottery.

[~Jess~]

Unfortunately, the MHA plan requires that you be employed with a verifiable income, which is probably why they're offering this to you. Hopefully you can find a job and then qualify for the MHA plan.

[Hopefull2009]

Originally Posted by jblyx002

I have another 4-5 weeks of normal unemployment before I can apply for the additional "Bush" extension. Yes, I want the make home affordable modification. Wait for steady employment? Nobody's hiring and how much further do I need to fall before they pull the cord? My biggest hit was that not only did I lose my job, but I lost a company vehicle with gas card and health insurance. Cobra was ridiculous. I had to add my wife to the personal health insurance which we pay around $700/month in insurance.

My mortgage is $1967, 30 year 5.25% (I think) with taxes and insurance included. It would be nearly impossible to skip these payments and make it up in November without hitting the Lottery.

I hear ya jblyx -- I was out of work for over a year, but I wasn't eligible for unemployment (was self employed). My business just went belly-up. I could no longer afford health insurance (which I was paying myself anyway). It's a tough situation to be in, so don't feel alone. MANY homeowners are where you are right now - don't give up!

It sounds like they are basically using this "forebearance" plan as a temporary solution. While they say the 12K will be due at the end of the six months, it's just the way the plan is set up (i.e. they have to account and "plan" for that money somewhere since there's not an actual modification in place).

I know the employment market isn't idea - heck, it's far from ideal. It took me over a year to find employment and when I did it was at a reduced income. Until I had the steady income again, they wouldn't even talk modification - only the forebearance plans.

The only thing you can do is make searching for employment a full time job itself - network, contact everyone you know. I finally had to settle on lower income than I was used to and that was very tough to deal with at first but in the end it was my only option for staying afloat.

Good luck!