Don't know what to do..need help fast

[amyn22]

So Wells Fargo is bascially telling us they are going to reject our mod because my husband has a rental property he is foreclosing on. They are considering that part of our profit and loss even though my husband is not making the mortgage payments. Because of this, it is showing we are negative -1000 at the end of the month, which really is not true since we are not paying the mortgage. We have a surpluss of 300 at the end of the month.

So they told us we will owe the deliquint amount of 6000 right away when they deny us or they will foreclose. WE can't afford 6000 all at once, and we can't foreclose.

What can we do?

[Evan Bedard]

So Wells Fargo is basically telling us they are going to reject our mod because my husband has a rental property he is foreclosing on. They are considering that part of our profit and loss even though my husband is not making the mortgage payments. Because of this, it is showing we are negative -1000 at the end of the month, which really is not true since we are not paying the mortgage. We have a surplus of 300 at the end of the month.

So they told us we will owe the delinquent amount of 6000 right away when they deny us or they will foreclose. WE can't afford 6000 all at once, and we can't foreclose.

What can we do?

Hello amyn22,

They should not be including your husband rental property as an expense if he is not making the monthly mortgage payments. Have your husband write out a letter explaining that he is not making the mortgage payments on this property and has not done so for months as the home is going into foreclosure. You need to get the attention of someone with enough authority to update your account with the correct info. Here try using these contacts to help you out with this:

Wells Fargo executive contacts

Wells Fargo Contact Information List

[Maurice Bedard]

If Evan's advice doesn't work, get HAMP admin involved. Call 866-939-4469 and tell them WF is violating HAMP directives in counting income. Press option 2 for help, not option 3 like it says for homeowners.

[amyn22]

If Evan's advice doesn't work, get HAMP admin involved. Call 866-939-4469 and tell them WF is violating HAMP directives in counting income. Press option 2 for help, not option 3 like it says for homeowners.

They told us that unless we have proof that it is in foreclosure they have to count it. The thing is, it is not in foreclosure yet. It is listed for a short sale, but my husband has not paid the mortgage in 7 months.

[Maurice Bedard]

Again, a case of fannie mae directives being a little more lenient. The HAMP handbook for non- fannie loans does say for that payment to be counted. Instead of a foreclosure, why not do a DIL on the other property and give it to them now instead of waiting? It is going to take WF several months to complete a foreclosure on your residence. They may or may not accept payments during that time, but if you DIL the other property, and get it out of your name, you can reapply for HAMP based on a change in your financial circumstances(less debt).

This all sounds weird since if you are in debt, it isn't suppose to count against you for HAMP. If your net income was negative, I could see a denial for that since that would cause you to fail the NPV test. But you have positive income monthly, but a monthly deficit. When you get an actual denial, it is suppose to state a reason. Based on this info, I am assuming that the value of your property is fairly close to what you owe. That is one condition where net income would matter more. But just saying a $1000 deficit is reason for denial is not good enough.

[amyn22]

I am sorry I was not being clear. WE were denied for HAMP because of th erental property. That put us too much in the negative. So now we are going in house. Can we go back and reapply for HAMP?

[Maurice Bedard]

Yes you can reapply, but you should wait until the rentaproperty is turned over to the bank, That is why I suggested a DIL on the rental, to get it done faster. If you are denied a HAMP mod because of financials, you are allowed to reapply if your financials change. Sorry I wasn't clear. But I still am not clear as to whether you got a writen denial letter. Being $1000 negative is not a valid reason to deny you. It has to relate to something like the NPV test, or they couldn't meet the waterfall requirements. There are so many ways fo them to make a mistake that I would not accept them saying just that you were $1000 short. You need to know if the gross income you reported would support a payment that would be enough to pay the minimum amount possibl on your mtg. If you have other debt, under HAMP, the servicer can require yo to get counselling, but cannot deny you just because of the debt making you $1000 negative. I must have been about $2000 negative on my bills but still got a mod. I had over $1500 a month in credit card debt, and income of only $2000.
From the HAMP handbook-

Rental income should not be included in a borrower’s monthly gross income if there is currently
no income due to vacancy (even if rental income was identified in their tax return or tax
transcript). The servicer must reconcile any differences between what the borrower
communicates and the borrower’s information. For example, the servicer might choose to

perform a property inspection of the rental property.

My reading- If it was a rental, and is vacant, you should not include the income, and that should mean a negative income as well which is what you have. Rental income for HAMP includes income minus the payment to service the debt. So under this rule, that payment for your mtg on the rental should not be included in figuring your income a lon as the propertyis vacant. The servicer wants to count the mtg payment on the rental as a negative toward figuring your income.

It is allowed to be used for figuring your monthly expenses, but monthly expenses don't have a bearing on whether you qualify for HAMP. You could cite this to the HAMP personnel, because it clearly says the rental income is not to be used if the property is vacant. You could even direct Wells Fargo to the HAMP directives to show them where they erred. Like I have said, there are many ways they screw things up. The mtg payment on the rental should not count against you.

And I also would bet that you might qualify even with the $1000 subtracted from your income, depending on the property value, loan balance, escrow payment, and gross income. Most of the time, theyissue a denial for low income without figuring in the allowable forbearance. That can make a huge difference.

I personally would want those questions answered. An in house mod could be acceptable, or could be terrible. And if you just do a DIL on the rental, you can even reapply for HAMP immediately after it was done. And you are better off for more reason to get the rental out of your name ASAP. Even if you are not liable for the mtg, you are still liable for claims over any insurance you have if someone was injured on the property, for example.