Need advise on ASC/Wells Fargo Jumbo Loan Modification

[ltravel]

HI,

New to this board but have been reading the forums for a few weeks now. Here is my situation:

1st Mortgage Balance of 653K held with ASC/Wells Fargo. Refi done in Oct 06, loan sold to ASC 18 months ago. Rate is 7.75% / 7 year adj so not worried about incr just yet.
Pymnt w/o escrow is $4785. Never gone 30 days late, but sometimes pay close with late fee.

2nd Mortgage Balance of 81K held with Franklin Credit Managment. Also done Oct 06 at rate of 13.75% fixed. Payment of $972 monthly. Also current on this loan.

Principal Balance of 2 loans combined is 734K. Home is currently worth 737K accrdng to most recent tax assesment done by the township, but in speaking with local friends/realtors, would be difficult right now to sell for that much. We live in a fairly nice area of NJ where the prices have surely dropped but we are not over-run with foreclosures yet, however there are not many buyers out there. And bottom line, we've put alot into this house and love it. We don't want to sell if we don't absolutely have to.

The loan was originally a no-income verification loan in my husbands name as I had one issue on my credit report at the time and the broker advised to do it this way. Stupid of us to even go thru with the loan as the 2nd mortgage was basically thrown at us at closing with the high interest rate. But they assured us we could refi in a 1 or 2 yrs thru them with no closing costs once I took care of my credit report. I got the item removed within the year and once the score was up we tried to refinance but the LTV was no longer there.

My husband holds the same job for 30 years and has not lost any income. I run a commission only travel business and have done quite well the past few years so we were able to handle the payments. The downturn in the economy hit my business immediately in the fall and we started running the credit cards up again. I have about 3 more months of good income coming in and then the well will be drying up a bit. Our expenses are very high with 4 children (tuition!) and a large house, and now a new batch of credit card payments.

I spoke with Franklin Credit a month ago to see if they could assist with a loan modification as their rate is so high. They do offer a 1 year reduction of interest rate depending on the situation but advised we deal with the 1st loan holder first.

I am getting ready to contact ASC/WF in the next couple of days and explain the situation. We would love to get the interest rate down to between 5-6% at least on a temporary basis if not permanently. I'm not looking for a reduction of principal as our values will eventually go up again, and we also feel we honestly do owe the money. Plus, my business should pick up again once the economy does. Another main goal here too is to keep the credit reports clean. Although we carry high balances they are spotless otherwise.

New Obama policy out today looks promising but still not sure if we totally fall into all the terms. Does anyone have a similar situation to ours that they've attempted to modifiy with ASC/WF. Any advice would be appreciated before I get on the phone with these folks. I've noted all the phone numbers from previous forums.

THANKS!

[Moe Bedard]

Hi ltravel,


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

You would need to begin by putting together a hardship letter..........


These are what most lenders consider to be generally acceptable hardships....

1. Loss of job or reduction in income
2. Death of the homeowner, spouse or family member
3. Illness of homeowner or family member
4. Divorce or separation
5. Forced job relocation by employer
6. Adjustable rate reset-payment shock

The best way to set up a hardship letter..........

* First, describe the hardship and the circumstances that caused it
* Explain what steps have been taken to correct the situation
* Provide the lender with your plan to get back on track and stay there
* Assure the lender that you are a responsible homeowner who just needs a second chance and that you are very motivated to save your home.



Then contact ASC to see what the options are that are available from the investor on your loan..............the modification given is going to be up to the investor and their guidelines...............

ASC ART Team
1-866-398-7569

Here are the guidelines to the program that was announced today to see if you meet the criteria to ask about that...............

FinancialStability.gov

[ltravel]

Good Morning ***,

Thank you very much for your advice. I will get started on the letter right away. I do have one question maybe you can advise on and I don't think I've seen it mentioned on the board previously. When laying out our financials for them, if we get
to that point, should we include our monthly tuition expenses for parochial school. It does amount to over $1000 a month. Since this is such a personal choice I'm not too sure how a mortgage company would react to this as one of our expenses when asking them for assistance in modifying our interest rate.

In the past when doing our first mortgage, or refinancing, the brokers have always told us that just debt that shows up on
a credit report and our livings expenses such as utilities is taken into account.

Any thoughts??

Thanks again!

[Dan Bailey]

ltravel,
You will have to wait to see what they request in terms of financials. We can't speculate on any "magic formula" or what the lender will ask for based on the differing investers criteria. It seems as if each inveater has different criteria, and is almost on a case by case basis even with the same investers.

[ltravel]

Although I haven't posted in a while, I have been reading many of the threads on the forum. To update, I sent all the required documentation to ASC via fax on April 24th and verified on the 25th that it was received and scanned into their system. Still not late on the 1st or 2nd mortgages, but paying on the 30th day. On May 12th the modification request went into review and each time I call they will give me the name of the negotiator, Henley, but I can not speak to him. I did receive a
letter confirming we are under review and should hear from them within 30days. Beyond that I can get no further information. I am told each time I call that once they have
negotiated with the investor and something is approved I will
hear from them, but I have been told possibly 90 days. Our
investor is Nomura..... Has anyone else had a loan thru ASC
with them as the investor. I can't find much info on them, nor
will ASC tell me anything further.

I am in a bit of a panic today as I phoned in the May payment
yesterday, just in time, but as of today the online account info,
and phone info does not show the payment update. I called
today to confirm the payment was posted and was told it
is held in a suspense account since we are under review for a
modification. Now I am very worried they will report late to
the credit bureaus even though we made the payment in time.
The rep in Loss & Mitigation assured me they will not. I've never
had a problem getting my payments posted with ASC in the time we've been with them and I have always paid online. I've
heard of payments being held in suspense when you are already in default, or on a forbearance plan, but never when
still current. Any similar experiences out there with ASC when it comes to this??

I know it's only been 3 weeks since they started the review, but do you think it's too soon to contact the executive offices?? We are living day to day financially and I am trying so desperately to keep all of our payments up to date. We have
a number of no interest credit cards that will jack up our interest if we go 1 day late and that will just put us further
in a hole. This juggling is killing us, and my income just keeps
going down as my clients continue to hold off on traveling.
Needless to say I am so anxious to get our payment down
as quickly as possible, we've already cut our expenses to the bare bones.

Do you think after 3 weeks we would have been told already
if they were most likely going to deny us the modification?

Any opinions are greatly appreciated!!!

[B Stevens]

I faxed my info 3 times since February. They finally assigned a negotiator on 4-28-09 and I have heard nothing yet. My loan is with WF but the investor is not Freddie Mac or Fannie Mae. If a negotiator has been assigned, you should be able to log into here https://www.wellsfargo.com/jump/mortgage/assist Mine has been sitting at step three for 3 weeks now.
I called on Wednesday to get a status and was told it will take more time because I am not late on any payments. It is almost as if you need to go into default before they will get the ball rolling. Ridiculous.
If they wait until I am late and tarnish my credit, I will fax them a remodeling permit to make this a 1 bedroom, 1 bath with 4 laundry rooms and an 8 foot deep tar pit in the back yard.

[ltravel]

BStevens,

I have been on the WF/Assist link daily and it shows us at step
2, Agreement in Process, when I've asked about that status I've been told it just means in negotiation. However, as of yesterday morning I can no longer get into the site, my access
is denied. It seems to coincide with the payment I made on
Friday.

Have your payments been put into a suspense account or is
you account updating with the payment you most recently made? And, have you tried the Executive Line yet? I don't like
to be pushy and try them too early, but I also am not in the
habit of wasting time when something can be done sooner.

Do you mind my asking, what are the specifics of your request
for modification?

[B Stevens]

My payment is automatic and has not been stopped. My tax and insurance has been impounded since the start of the loan.
I am on a 5/1 ARM Interest Only for $490K. The rate will not change until March 2010. I have a second through another financial institution for $62K. When I bought, I put 20% down. My house is worth about $380K now. My debt to income is hovering at about 60-65%. I have no car payments or credit card payments. Just utilities and the house.
I asked for a reduction in the interest rate and a reduction in the principle to bring me down to the DTI of 31%. That would require a 40 year loan at 2% interest and a principle reduction of about $125K. I am asking for the moon but it doesn't hurt to ask. I also offered to trade my house for a smaller house in their inventory in the same condition and zip code.
They say I am at step 3 on the site but when I called, they told me they were still trying to determine my options.
I called the executive number and was told it may take up to 60 days (from the date it was assigned a negotiator) to get something worked out. I asked the guy if I was approved for a loan mod and he said it was not approved yet and they were still in negotiations with the investor. Who knows? It seems it could go either way.

[ltravel]

Current Update

-Documents faxed and loaded on April 24th
-File went to negotiator on May 12.
-Jennifer at the Exec Line advised on June 12 that a computer program
of options had been pulled that morning. No BPO requested up till then
-This evening, June 16th the WF Assist site moved on to Step 3 and
posted the following info:

Current Status: Processing your agreement


A modification forbearance agreement for your account is being drawn up and mailed to your property address. Please review and sign this document, returning it within 5 business days.

-I'm afraid to get excited as I don't know what the offer will be. I'll be
calling the Exec Line tomorrow to see if the can give me any info.
-So far pretty painless, I hope it continues that way!!

[ltravel]

Well I knew it was too good to be true. I called Loss Mitigation today to see if they could tell me what the offer might be. The rep told me we were being put on a modification forbearance plan for 8/01, 9/01, and 10/01 for the same exact amount
as our payment is now, $6127.78. If we made those payments on time the investor
would consider a modification.

We are barely going to make June's payment on the 29th day this month, I know
there is no way we will be able to make those payments all the way thru October
without falling behind. The rep said she would have the negotiator call me within
48 hours.

Has anyone with ASC/Wells Fargo seen this type of offer before?? It's basically not
an offer of any kind. Any thoughts???

[B Stevens]

They may have you skip the 7/01 payment. It wouldn't help much but your asking them to bring down the payment on a house that hasn't lost very much value. It almost sounds like they are offering a "skip a payment" type of deal to get caught up but it doesn't seem like they are offering much in reducing your interest or payment. Could you ask to be put on a modification forbearance plan for 9/01, 10/01, and 11/01? Either way, you need to let them know you need more time to get caught up before you can make the same payment due to your hardship.

One thing I have realized is they are in business to make money. If they can get you out and sell it for what is owed, why would they take a loss for a $1500 incentive from the government? You are one of the few who's property value hasn't dropped below what was paid. You are going to have to crunch some numbers... 6% commission, 30-60 days on the market, loan and title fees, all the costs and time it takes for them to get another owner for the same or possibly less loan amount. This is what they will lose by foreclosing on it. You have to be less of a loss than that magical number in my opinion and you have to use terms that make them realize (or the investor realize) it would be cheaper to keep you in the house.

I am sorry I do not have more encouraging words for you. I know you could use them right now.

[ltravel]

BStevens,

Thank you for your input. I placed a call to the Exec Line yesterday also and although the woman was nice all she could say was she would also
contact the negotiator to call me and give it 48 hours. She did agree that
this was an odd forbearance scenario did not want to comment until I got
more details from the negot. So hopefully I will get a call back today or
tomorrow.

I agree with your assestment that we are not much of a risk or loss in
the investors eyes, especially since the 1st mortgage balance is 652K
and the house would probably sell for about 650-660K right now. It would
leave the 2nd lein holder of 81K out in the cold, but the 1st would be
fine. On the other hand if we went ahead and sold on our own they would
lose many years of future interest, still a substantial amount of money
even at a rate of 5% or similar. But if they would modify us they would
continue to take in that interest for many years. I guess I have to really
try to be persuasive in that point.

I don't know about the skipped payment, I guess I'll find that out when
I speak with someone today. We'll probably just eke out the June 1st
payment on the 29th bringing us to July 1st. If they skipped that one
(without dinging the credit report I hope....) we could then make that
August 1st payment on the 1st. IT is 9/01 and 10/01 that are now
scaring me at this point, my commissions for August and September are
very low, much less than the monthly average given them in the financials. And if they don't skip the July 1st payment there is no way we
can catch up for the forbearance payments, they'd still be at least 29
days out. I never knew we could live so lean, and it's still not enough.

Well I'll just have to wait and see what the negotiator has to say. I'll
update when I know something.

[ltravel]

After not hearing from my negotiator withing 48hrs as promised, I called straight into the Exec Line and got a true angel (I hope!) She took the time to really read thru the file and the notes and explain the forbearance agreement to me in detail. Then she said she would contact the negotiator with all my questions and get back to me hopefully today.
Within 30 minutes I had a call back (unfortunately I was on the phone),
she left her direct # and I got her right back.

On 6/17 I was told the forbearance plan called for 8/01,9/01,10/01 pymnt
of my current mortgage and then the investor would review. As BStevens
pointed out, maybe they would let me skip a payment. That is what they
are doing, I had not made June 1st payment yet and we do not have to,
nor July 1st. We will start with full pymnt 6127.73 on 8/01,9/01,10/01 and
then on 11/01 pay $1421 and at that point they will review for permanent
modfication. Our investor is Nomura, not a common one and she was
honest in saying she does not know their track record as far as mods, this
is all still very new to so many of the investors.

I questioned the impact on our credit report as we are desperately trying
to keep it clean. She did say they report us as "on a Forbearance Plan",
not 30 days late, but if in the end, the modification does not go thru we
could be reported up to 60 days late for these 2 skipped payments. So
I guess we are taking a risk. At this point though I don't see any other
choice and I hope it's a risk worth taking if the result is a lower interest
rate.

Does anyone out there have any thoughts on this Forbearance Plan, maybe have been put on a similar one, or had experience with this type
of reporting to their credit report??? Our paperwork was supposedly sent
out Wednesday USPS so probably won't be here until Monday and then
we have to get it right back.

[lasvegas78]

Today I found out that I am being offered a similar "modification forbearance". It will run for 6 months and my payments in that period will be reduced almost 50%! However, there will be a balloon payment at the end. So, no "free lunch" - repayment of foregone principal/interest will be required.

I was told that the investor requires that I be put on a forbearance plan first and in six months they will consider me for a loan mod. Is it true, I wonder?

Not so bad after all, but what effect will it have on my credit score? When I asked this of a WF rep I was told it will not have an effect. I am and always have been current on my mortgage, but need to modify my mortgage due to loss of income/equity/ARM mortgage and etc...

Any thoughts

[ugh_2009]

lasvegas78,

why are they putting you on a forbearance plan when you are current?

[mateo03]

It seems that being a mother, housewife, and running your own business, that your time is really valuable and all this run around is not worth the hassle ... Have you thought of trying to contact a loan modification company to help with the negotiations? They work directly with the lenders and make sure that you're pre-approved before any type of charge would be asked for. I have heard of many people using companies like this and having great results.

It looks as though at this point you have nothing to lose and at the very least, you can find out if you're qualified. I'm pretty sure this board prohibits promotion so I'm not going to recommend any one company.

I hope that this helps and believe it or not, we actually have a President now that is looking to change the problems in America, rather than just pretend that they're not happening and let nature run its course.

I hope you will e-mail me and we can find a way to make your life less stressful. I used to work at Countrywide and was released for not selling enough pay option ARMs because I didn't want to lie to people. I feel it is my duty now to help those in sticky situations and be able to enjoy life without worrying if the bank is going to come take their house or not because it actually has value.

-Matt

[lasvegas78]

Originally Posted by ugh_2009

lasvegas78,

why are they putting you on a forbearance plan when you are current?

I was told this is one of the investor's conditions... 6 months in forbearance and then they'll consider me for a loan modification.