ASC-Principle reduction-Interest only loan

[Patty--D]

Summary:
Laid off Feb 2011
Working part time min wage/tips
Contact Making Home Affordable in March 2011
Contact Mortage lender today
Loan: 6 month variable INTEREST ONLY (currently 2.75&#37 balloon 25 years
(Fannie Mae loan)
Loan balance is $131,000 Property value is $89,000.
Payments are current

I phoned ASC requesting a principle reduction. I was told over the phone I did not qualify initially but to send in financials, 2 pay stubs and hardship letter.
My call with Making Home Affordable was the same.

I believe I'm not qualifying due to the % of mortgage to income BUT I CAN'T make anyone realize that my monthly mortgage payment does not include any principle payment.

I started on your site searching for sample of hardship letters. I want my letter to address that my request is specifically for PRINCIPLE REDUCTION with regards to my loss of income and our home values. I'm not locating any threads or sample hardship letters that discuss the interest only payment issue along with my loss of income and more importantly the home value issue.


Any help appreciated!

[SurfwhenUcan]

Summary:
Laid off Feb 2011
Working part time min wage/tips
Contact Making Home Affordable in March 2011
Contact Mortage lender today
Loan: 6 month variable INTEREST ONLY (currently 2.75&#37 balloon 25 years
(Fannie Mae loan)
Loan balance is $131,000 Property value is $89,000.
Payments are current

I phoned ASC requesting a principle reduction. I was told over the phone I did not qualify initially but to send in financials, 2 pay stubs and hardship letter.
My call with Making Home Affordable was the same.

I believe I'm not qualifying due to the % of mortgage to income BUT I CAN'T make anyone realize that my monthly mortgage payment does not include any principle payment.

I started on your site searching for sample of hardship letters. I want my letter to address that my request is specifically for PRINCIPLE REDUCTION with regards to my loss of income and our home values. I'm not locating any threads or sample hardship letters that discuss the interest only payment issue along with my loss of income and more importantly the home value issue.


Any help appreciated!

Hi Patty and welcome to the forum!

I am glad that you came to this site prior to submitting the hardship letter you are thinking of writing. When you describe what you want to put in the hardship letter, you left out any kind of hardship. Having an interest only payment and loss of home value are not considered hardship (by the bank). So to itemize anything like that is useless. And principal reductions are so rare, you might as well forget about it.

Now, losing your job can be considered a hardship, but if you have lost too much income, you don't qualify - modification is based in large part on your income and you do have to be earning decent money in comparison to your bills. The big three hardships are Death Divorce and Medical. There is a fourth, Financial Hardship, but that one you've really got to sell the bank on two things: 1) it's legitimate and 2) the situation can be solved with a loan modification. The legitimacy of your hardship is difficult to convey to the bank when you are current on payments so that's going to be a challenge for you.

I suggest you do as much research on these threads as you can not on hardship letters but on how to submit a package to ASC. What others do successfully will tell you how to proceed. There is also a thread devoted entirely to finding out if you even qualify, I would go there first. Good luck and keep us posted!

[Cat Damiano]

Hi Patty,


Welcome to the forum and thank you for joining.............

As Surf suggested you may want to put your current information that is request in the following thread to see if you qualify for a workout at this point. But as Surf mentioned, if principal reduction is all that you are hoping to achieve, unfortunately that isn't going to happen.

Find out Now If you even QUALIFY for a Loan Workout Solution. Post Your Situation