Paying For a Loan Modification - HR 5579

[hamhead69]

What happens if I default on my second mortgage but not my first? Can I still be foreclosed upon? BTW, I live in CA.

Sorry if this is answered somewhere else, I'm a newbie.

[schwefls]

Hi hamhead69 welcome to our forum:

I wanted to stop in say hello, and let you know we are here fo you. Shortly someone will be reaching out to you to adress your questions and provide you with some sound advice/suggestions.

[hamhead69]

I apologize in advance if there is a similar post on this site. I looked but did not see anything.

I have been approached by a lender with whom I previously tried to re-finance with to do a loan modification. According to the Modification Officer I am a perfect candidate for a loan modification. I am not currently late on either my first or second but my homes valued has decreased along with everyone elses and my first is an ARM which is due to adjust in the next two months. The rate on my first is over 9% and my second is at 12.5%.

My first question, is it prudent to pay this company 3K to do the loan mod for me or am I better off doing it myself? They make no guarantee of success although they claim to be able to get over 90% of their applicants modifications.

My second question is according to the guy I have been speaking to once I file for modification the lender cannot report me as late to the credit agencies or proceed with foreclosure proceedings under HR 5579. Is this true? He stated that most people use the first month of non-pament to pay their 3K fee.

Again I apologize if this is a redundant post. Any help with my questions is greatly appreciated.

[Professor Shays]

Let me begin by suggesting that you hold on to that $3,000. The suggestions you get on this site is "free," and I'll suggest that it is probably better than you will receive form who ever quoted you that $3K. The key to providing you with the best possible information is for you to help us by providing some information.

You've told us that you live in California. Tell us more by answering the following questions:

1. Is the property in question your personal residence?
2. What is your estimate of the current fair market value of the property?
3. What are the amounts owed on the loan(s)?
4. Where the loan(s) created at the time you bought the home or was there a later refinance?

Daniel

[hamhead69]

My answers are as follows;

1. The property is my primary residence.
2. The last appraisal I ad came in at 450K.
3. I dont have the exact amounts, these are estimates 383K/95K (1st / 2nd)
4. These are the original loans, I have not re-financed.

[Professor Shays]

From the information provided it looks like it is safe to say the property is underwater (figuratively speaking). This lack of equity puts you in a challenging position. The choices in my view are fairly clear cut, and to some degree require that you look into your own crystal ball and try to figure out what the market will do in both the short term and the long term. I constantly preach that probably the best approach to take is by being business like and creating a two column page. On the left you would have factors that suggest keep making payments. On the right, factors that suggest accept the consequences of foreclosure. Please do that on your own (yeah I know columns don't work when posting in this forum but you can create two lists).

I'll help with the column on the right. The difference between the properties monthly fair rental value and that portions of your mortgage payment that involve interest and taxes should be viewed as a negative. An obvious additional negative is how long it is going to take your home to get up to where it increases in value so that you can sell it and not take a loss.

Bottom line is that with two loans that look like they are non-recourse in nature (see previous postings that discuss California Code of Civil Procedure Section 580b), you are very lucky when compared to a lot of people who post on this forum.

Take care,

Daniel

[hamhead69]

I would like to stay in my house if at all possible. I plan on being there for the long hall (at least the next 5 years). I did not buy it to flip or jump to another house of greater value in the short term.>>
>>
Should I look into a loan modification? All I really need is a $500-$800 a month swing. The rate on my second is 12.49%. If I could get that cut in half that alone would help me significantly.>

[Cat Damiano]

Who are the lenders on the first and second?

[hamhead69]

HomeQ is the first and ASC is the second.

[Cat Damiano]

Here is the contact info for both Loss Mitigation Depts. so you can see what options the investors on your loan have as far as modification goes.........

HomeQ
Loss Mitigation
PH 1-877-867-7378
Fax 1-866-577-1227

ASC Loss Mitigation
1-866-398-7568


To get started, you will need to put together a hardship letter, there are examples in the Homeowner Tool Box to the left of the forum..........

[hamhead69]

Is it true that the lender can not put me into default during a modification? I haven't been late with a payment yet but it looks like I may be late this month.

Does not being late make a modification less likely? I have been using my savings to stay current with my mortgage(s).

Thank you and everyone else on this site for your insight and knowledge. I have many sleepless night worrying about what will happen with my home. I'm pretty much at my witts end.

[Cat Damiano]

If you miss payments you will be in default..........going through the modification process doesn't stop the remedies for default from happening. The investors are modifying loan even if you are not in default, so that shouldn't make a difference, but most who are experiencing a hardship are not able to keep up...........

Start by contacting them and see what options are available to you..........

[branden_williams]

Hello hamhead69,
Cat suggested putting together the hardship letter and that is a good start. May I also include to add the income and expense sheet in the tool bar. To do a modification all lenders will want to see that prepared. The lender may send you their own. Please keep in mind these lenders are in debt collectors mode so you will need to stay persistant with them. Keep us posted on how things come along. Good luck.