Mortgage advice.

[C Moon]

Who does one see for advice on what to do with their mortgage—outside of their lender?
We signed up for a 10-year adjustable /interest only 2 level loan (arrrgh!) 10 years ago, now it's coming to an end.
We want to try to combine the two loans into a fixed. We bought it in 2007 (when the price was very high). 4 months later it dropped in the great recession. Needless to say, it's still under water.

Any advice?
There are other variables that I won't go into—and it's not Fannie Maye or Freddie Mac, unfortunately.
I've been trying for years to get us out of this.
California—I've looked into KeepYourHomeCalifornia.
Right now, I just want to talk to someone to see what our options are.

[elleng]

1. Try here: Personal Finance and Investing (Group)

http://www.democraticunderground.com/?com=forum&id=1121

Good luck.

[C Moon]

2. Thanks! I'm going to delete this so I don't get into trouble for double dipping.

[elleng]

3. 'Double dipping' like this is NOT a problem here;

posts often need wide distribution.

[C Moon]

4. Okay. Thank you x2!

[Demonaut]

5. how underwater? versus the value of the home?

either of you veterans?

[C Moon]

7. Thanks. No. I keep being asked that along with the Fannie Maye Freddie Mac question.

It looks like short sale is our only option, unless I can find an org that helps out in this area.
What I really want to find out, is what is the possibility of getting the 2 loans merged into one fixed loan.

[C Moon]

9. Sorry, I didn't answer the first part:

we haven't had a pro assessment, but online I found it to be anywhere from -$6,000 (on Zillow) to -$20,000 (on another site).

[brush]

6. This is a tactic that has been used successfully by many who found themselves underwater...

because of the 07-08 housing crash. Ask your mortgage holder for a loan modification (reduced mortgage payment, and possible principal reduction). The principal reduction would be an added bonus but less likely than the modification. It could happen though.

With loan modification requests you have to have a legitimate hardship, and because of the crash your house is underwater and you are up against it with mortgages coming due and possible baloon payment at the end maybe? You have a real hardship.

What you have to do in order for them to take your loan modification request seriously — steady yourself as this part takes some guts and goes against what most hard working people think — you have to stop paying your mortgage.

Two to three months will do it. You'll get letters and phone calls from the mortgage holder.

Steady, remember. Don't answer the calls at first. I assume you have a phone that shows the number of the caller. After 3 months answer the call and tell them you are having problems paying and ask for a loan modification packet because you really want to keep your home.

It's a process. They'll send you this packet that asks for a detailed hardship letter where you explain your situation and how you are a victim of housing crash and how you've diligently paid your mortgages all these years but finally your funds are exhausted and you would be grateful for whatever they can do to reduce your monthly payments. Lay it on thick as it'll be true.

They'll want financial info, bank statements, 1040 forms, household expenses and other info.

Just take you time and gather all the documents they ask for and send it back to them. They'll ask for more documents. They'll claim they lost ones you've already sent. They'll change representatives on you who will request the documents all over again. They'll make it as much of a pain in the ass as they can but be patient and keep sending them the stuff.

AND THIS IS IMPORTANT: WHEN YOU GET THE PACKET, COPY ALL THE FORMS FIRST BEFORE FILLING THEM OUT SO YOU'LL HAVE A MASTER THAT YOU CAN RE-COPY IN CASE YOU MESS UP AT THE FIRST ATTEMPT.

THEN, ONCE FILLED OUT, COPY ALL THE FILLED OUT FORMS BEFORE SENDING SO YOU'LL HAVE A COPY OF WHAT YOU SENT THEM WHEN THEY ASK FOR IT AGAIN AND AGAIN AND AGAIN.

Just consider it a process you have to go through to get a lower mortgage payment and better situation. And in the meantime, keep stashing away the money you would have paid the mortgage with (not in you bank account because they request the last two to three months of bank statements.

Hope this helps. Check with an attorney or home retention advisor. They will tell you that if you keep paying the mortgage they won't take your request seriously as you are making the payments.

Good luck. Been there, done that.

[C Moon]

8. Wow. Yes, we have been on time for the past 10 years...

And I did call and ask for help before and they said, "sorry." So the picture you painted above sounds like something that I will need to go through. :O
We do have money in the bank, I wonder if they'll want all of that.
But we're both out of work as of January (layoffs)—although it appears we'll both find work quickly because the interviews are stacking up.
So, I think I'm going to start with talking to a home retention advisor. I've never heard that term. Then maybe an attorney.
Thx!

[brush]

10. You'll have the out of work fact to add to your hardship letter as well. That makes it even stronger

Here's an advanced technique: If you can hold out for three more months, open another bank account immediately with maybe fifteen hundred or two thousand or so and start making all you deposits/automatic deposits into it as they'll want your last 2-3 months of bank statements.

Close the other one and protect the funds someway.

[progree]

11. I have a friend who got a mortgage modification - and she never missed payments

Last edited Wed Feb 1, 2017, 12:45 PM - Edit history (2)

I've read articles where skipping payments is not good advice as far as increasing your chances of getting a loan modification. Check this out fully and carefully before ruining your credit rating. Realize also that a fucked up credit rating will result in higher insurance rates, higher interest rates on loans / credit balances you already have, possibly result in frozen credit lines or even payback demands, makes the job search harder, harder to rent, etc. And your loan modification will be temporary. So please look at the whole picture.

https://www.google.com/search?sourceid=chrome-psyapi2&ion=1&espv=2&ie=UTF-8&q=mortgage%20modification%20stop%20making%20payments&oq=mortgage%20modification%20stop%20making%20payments&aqs=chrome..69i57.7336j0j3

http://www.nolo.com/legal-encyclopedia/should-i-stop-paying-mortgage-i-qualify-loan-modification.html

And there is such a thing as being too poor -- in mortgage modifications they are looking for a Goldilocks spot -- not too rich and not too poor, income wise (and debt level). They look at a debt payment to income ratio. If it's too low, then they figure you can afford it without help, despite your squawking. If it's too high, they figure that what help they can offer will not be enough and you'll go under anyway. They do a "net present value" analysis and risk analysis.

As for a home retention advisor, I don't know what that is. If it's a non-profit agency like Habitat for Humanity, that's perhaps good advice from people who have helped others work through the process (on the other hands, some are inexperienced and have their perceptions colored by ideology). If it's someone who advertises on AM radio and expects money before doing much of anything except the sales job, then run like hell for the hills. Check them out on the BBB and by a plain old Google search.

I take it your interest-only period is ending and you will have to start paying principal?

[C Moon]

14. Thank you for the advice. Yes. You're correct, our interest only period is ending.

Thanks for the great links, too.

[JayhawkSD]

12. Be cautious here.

Some of the processes described can damage your credit for many years, expose you to major tax liabilities, and involve a risk of being charged with fraud if they are not done very carefully.

Things like, "not in you bank account because they request the last two to three months of bank statements," can involve fraudulent reporting of assets, and if you are engaging in a federal program can get you in huge problems.

If your mortgage is reduced the IRS regards that as "debt forgiven" which is considered to be income and is subject to income tax, all of it taxable in the single year in which the transaction occurred. There are ways around that in some cases, but you have to know precisely what you are doing.

Not paying your mortgage will go on your credit report, and money stashed under your mattress to pay it after the fact will not restore your credit report.

Do not take advice from a lender, nor from well meaning friends. Hire a financial consultant who is being paid by you to give you advice and who has no financial interest other than your well being as his client. It will cost you the amount of his fee, but it could save you a bundle and could even keep you out of jail.

[C Moon]

13. Thank you. So, are there financial advisers specializing in loans /real estate?

or is it just any financial adviser?

[JayhawkSD]

15. There are specialists, but...

Most comprehensive financial advisors can steer you through the process. If he can't do it himself he should be able to refer you.

[R B Garr]

16. You could try posting this at the CreditKarma site. They send you offers

for possible credit opportunities based on the content of your post (I don't know if that is how to explain it). There are threads there about mortgage advice, although like any other internet advice, you can't take it all as fact. But you can read through many threads and see some basic comments and see if that rings true to your situation *.

I don't post there, but I did sign up for a free credit score, and they analyze your debt and serve up ads accordingly.

Also try any credit unions, as they sometimes have good programs. Good luck! Something will probably work out to get you through, and maybe you can refinance again in few years after you get it bundled. Also, call around for realtors, for instance, one of our credit unions has a realty program where they give you a discount on a realtor's commission if you use their service. The realtor's should have some inside info into credit products to match your needs.

*edit-for instance, many posters were saying that their lender told them not to make payments while they were going through a loan modification, but they still reported them late and screwed up their credit. Many people said that, so it seemed credible.

[C Moon]

17. Great advice. Thanks. I'll look at that!