Loan Modification

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QHSurfer_IHB

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I applied for a loan modification on my 5 year ARM with my current bank, but was rejected because i had not been late with any of my payments. Is there any other avenues or government loan modifcation programs i can explore where i can get some help on remodifying my loan to something more longer term and fixed. I am worried about my future job security and have always paid my mortgage on time. My bank had suggested to intentionally make couple of late of payments so that my application will be considered, but i do not want to go this route as it will hurt my credit.



Thanks.
 
[quote author="QHSurfer" date=1234911485] My bank had suggested to intentionally make couple of late of payments so that my application will be considered, but i do not want to go this route as it will hurt my credit.



Thanks.</blockquote>


<img src="http://barackbar.com/img/barackbar.jpg" alt="" />
 
[quote author="QHSurfer" date=1234911485]I applied for a loan modification on my 5 year ARM with my current bank, but was rejected because i had not been late with any of my payments. Is there any other avenues or government loan modifcation programs i can explore where i can get some help on remodifying my loan to something more longer term and fixed. I am worried about my future job security and have always paid my mortgage on time. My <strong>bank had suggested to intentionally make couple of late of payments </strong>so that my application will be considered, but i do not want to go this route as it will hurt my credit.



Thanks.</blockquote>


QH - If you are worried about employment security, you can probably have the job of the employee who suggested that you stop making payments to his/her employer.



You may apply for a loan modification or endeavor to go through the short sale process, whether you have made late payments or not. Depending on your situation, you may not qualify for other reasons, or you may qualify but still have adverse tax, income, and/or credit repurcussions.
 
[quote author="QHSurfer" date=1234911485]I applied for a loan modification on my 5 year ARM with my current bank, but was rejected because i had not been late with any of my payments. Is there any other avenues or government loan modifcation programs i can explore where i can get some help on remodifying my loan to something more longer term and fixed. I am worried about my future job security and have always paid my mortgage on time. My bank had suggested to intentionally make couple of late of payments so that my application will be considered, but i do not want to go this route as it will hurt my credit.



Thanks.</blockquote>
Just wait until Obama's plan goes into full effect. You can bet your arse that I'll be applying to have the mortgage rates on my rental properties lowered. If I'm gonna pay for this through higher taxes and higher inflation later, I want the damn benefit of it.
 
[quote author="QHSurfer" date=1234911485]I applied for a loan modification on my 5 year ARM with my current bank, but was rejected because i had not been late with any of my payments. Is there any other avenues or government loan modifcation programs i can explore where i can get some help on remodifying my loan to something more longer term and fixed. I am worried about my future job security and have always paid my mortgage on time. My bank had suggested to intentionally make couple of late of payments so that my application will be considered, but i do not want to go this route as it will hurt my credit.



Thanks.</blockquote>


Well you may ultimately not have a choice as time goes by. When your arm resets will your payment be higher than what you can afford now? If you can not pay that higher payment then you will be in that boat of a lot of other people as Home values have dropped by 35% last year and you will not be able to refinance because you owe a lot more than the property is worth. Now if you can afford the higher reset payment then great, but how long do you want to pay on a upside-down property with values continuing to drop and maybe in 6 to 8 years we might see some property appreciation and i am being polite. Short selling is not the answer as only about 5% of them work out and eventually it goes back to the bank anyhow as a foreclosure. The speed of this process may quicken if you lose your job and with the unemployment rate heading to double digits you may not have a choice and not be able to pay your mortgage. (Can you make the bills on unemployment? and finding a job is taking a lot longer time and people are usually making half or less when they do find a job.) The question you have to ask yourself is when do you want to deal with this toxic loan on your terms while your still employed and have a better chance of a loan modification or being unemployed at which point the bank will not deal with you and you will have other things to worry about. (If they do not offer a principal reduction do not take it at as you will have a zombie loan modification and about 60% of those go back to the bank after one year. They give you a teaser rate that will adjust in 5 years extend you loan length to 40 years and your still underwater unable to refinance or sell and you waive all your rights to sue the lender and everyone else involved. Nice screw by the banks who really care.) Either way your credit may go to hell whether you like it or not. And this is why a Trillion dollars of Alt-A and option Arms are coming to reset in the next 3 years so you will not be alone. I would check with an RE Attorney and a CPA before doing anything as to protect your rights and yourself.
 
Thanks Cobra for explaining this modification process.



So, we get punished for making the payment on time? Why do we have to default before the bank willing to work with us? I guess either way, we are loyally screwed?



If that is the case, and if I am homeowner with an ARM that reset soon, I might as well live rent free for a couple of month and mail in the keys to the bank?
 
[quote author="usctrojanman29" date=1234917993][quote author="QHSurfer" date=1234911485]I applied for a loan modification on my 5 year ARM with my current bank, but was rejected because i had not been late with any of my payments. Is there any other avenues or government loan modifcation programs i can explore where i can get some help on remodifying my loan to something more longer term and fixed. I am worried about my future job security and have always paid my mortgage on time. My bank had suggested to intentionally make couple of late of payments so that my application will be considered, but i do not want to go this route as it will hurt my credit.



Thanks.</blockquote>
Just wait until Obama's plan goes into full effect. You can bet your arse that I'll be applying to have the mortgage rates on my rental properties lowered. If I'm gonna pay for this through higher taxes and higher inflation later, I want the damn benefit of it.</blockquote>


Trojan, how does the Obama's plan help you as a homeowner?
 
[quote author="tulip" date=1234963529][quote author="usctrojanman29" date=1234917993][quote author="QHSurfer" date=1234911485]I applied for a loan modification on my 5 year ARM with my current bank, but was rejected because i had not been late with any of my payments. Is there any other avenues or government loan modifcation programs i can explore where i can get some help on remodifying my loan to something more longer term and fixed. I am worried about my future job security and have always paid my mortgage on time. My bank had suggested to intentionally make couple of late of payments so that my application will be considered, but i do not want to go this route as it will hurt my credit.



Thanks.</blockquote>
Just wait until Obama's plan goes into full effect. You can bet your arse that I'll be applying to have the mortgage rates on my rental properties lowered. If I'm gonna pay for this through higher taxes and higher inflation later, I want the damn benefit of it.</blockquote>


Trojan, how does the Obama's plan help you as a homeowner?</blockquote>


<img src="http://blogs.grupojoly.com/tacho-rufino/files/2008/12/jingle-mail.jpg" alt="" />



Prepaid envelopes FTW!
 
[quote author="tulip" date=1234963415]



If that is the case, and if I am homeowner with an ARM that reset soon, I might as well live rent free for a couple of month and mail in the keys to the bank?</blockquote>




Looks like you can live rent-free for 12-18 months, minimum. Wait for the sheriff to tack the notice to your door to maximize your savings, of course...
 
A loan modification without a principal reduction is a great deal for the bank: they get to squeak a few thousand more dollars out of people before the foreclosure. I guess for the bank it is better than nothing. People need to wake up and realize that they are being screwed a second time with these modifications. Desperate people in desperate situations do desperate things. There just isn't any forethought involved in this process because of the panic these people are feeling. Give it up, you'll be better off in the long run. It may not seem like it now, but all of this is just making it worse.
 
Freedom,



12 to 18 months rent free and the slap in the hand is just my credit score? BUT should I wait for the loan to reset or I can do it now?
 
If you are going to do it, do it now, unless you can't rent any cheaper, then maybe you should wait for the reset. I think Freedom is saying whenever you decide to stop paying, you'll have 12-18 months left rent/mortgage free. I still am a bit conflicted about the ethics of this, but I'm not sure what you are supposed to do when you are actually being told to not pay your mortgage, even when you CAN afford it. Of course, you could then try to modify, but I can't understand doing that unless you are one of the seemingly nonexistent Californians who can't pay the reset but aren't underwater.
 
Look at the language of the new proposal announced today....there may be hope for you. Do you know who owns your loan? It's much harder if your loan was bundled and sold off to investors as the banks are reluctant to do anything with those for fear of being sued by the investors. If it's owned by Freddie or Fannie, you'll be able to refi up to 105% of its current value. Are you underwater by more than that?



The new plan today has carrot and stick.... carrot being that the banks will be given incentives to modify and stick being that Congress will most likely pass legislation that allows bankruptcy judges to adjust mortgages. Give your bank time to get this into their system and then talk to them.
 
[quote author="tulip" date=1235042317]Freedom,



12 to 18 months rent free and the slap in the hand is just my credit score? BUT should I wait for the loan to reset or I can do it now?</blockquote>


<strong>

Whoa!</strong>



First, I am in no way suggesting that this is an ethical course of action, or without serious consequences.



Second, I personally think that if you can afford it, especially if it is still under market rent, you should not do it.



But: Each person has to individually evaluate, if the current or resetting payments will impoverish their family, it is worth <strong>doing something wrong and bailing on the contract </strong>that they have signed and saving up the money they are not paying to the bank, to help them get on with their life as a renter.



Unfortunately, for an increasing number of people, it is.
 
Frankly, I am appalled by the responses to this genuine question. QH, I think you would be better served by posting your question on a different forum. Yesterday everyone knew that a new housing proposal was going to be announced and no one said anything. Worse is that it was announced today and there was information in there that could very well help QH, yet none of you replied with that. IR mentioned who to talk to and the possibility of a short sale, but to the rest of you who just told him/her that foreclosure was inevitable or didn't bother to answer, shame on you. I'm really not fond of the vibe that this board has taken in the last 4 or 5 months.



This article may be helpful in giving you an idea of what the latest announcement might be able to do for you QH



<a href="http://articles.moneycentral.msn.com/Banking/HomeFinancing/will-the-housing-bailout-help-you.aspx">Will the housing bailout help you? </a>
 
Stepping up- I understand your frustration with the responses. However, the situation has become increasingly frustrating for the people facing it. From everything I have read, particularly today, it doesn't seem that those in California with jumbo mortgages and extremely underwater have many options. If you can actually see options for these people other than foreclosure or not paying their payment so that the bank will listen to them, I'd like to hear them. Personally, I am dealing with a friend in this situation right now and I just don't have any good answers for her. The original question doesn't give many details, so it is difficult to assume anything except the same difficult situation that the majority of those in trouble in Orange County are facing.
 
and what is jumbo in OC? It's like $629K this year. True, he/she didn't provide many details, but the balance may be lower than that and the news today was saying that you didn't have to be behind. I just think that there might be options and no one seemed to give anything remotely resembling an answer to the question of whether there were any other options.
 
Then maybe we all just need some details in the form of numbers. I'd also like some real life OC examples from anyone who has actually benefited (or thinks they will qualify and benefit) from a loan modification. Give me some scenarios with numbers so I can see how this could actually work. Anyone?
 
It is really confusing reading on the modification loan. It seem like you are screwed either way.



The bank won't work with you, because your loan has not be default yet. So in order to get attention, you have to default your loan and ruin your credit score. Once credit score are ruined, why does it matter if your score is 700 or 600. It like getting a D or an F...either way you flunk the class.



Short sale? Impossible, because first, this house is in Riverside county, second, I don' think the bank willing to take 50%, because that is how much the house is now worth according to Zillow.



Stepping up- thank you for your honest concern, but I don't think these posters have any bad intention. Of course, QF have to take in all consideration and advices.



BUT sometime, I wish posters on this forum would stop being too sarcastic because it hard to understand if they being funny or being real, since you can't heard the tones of voice with forum.
 
[quote author="stepping_up" date=1235044117]Frankly, I am appalled by the responses to this genuine question. QH, I think you would be better served by posting your question on a different forum. Yesterday everyone knew that a new housing proposal was going to be announced and no one said anything. Worse is that it was announced today and there was information in there that could very well help QH, yet none of you replied with that. IR mentioned who to talk to and the possibility of a short sale, but to the rest of you who just told him/her that foreclosure was inevitable or didn't bother to answer, shame on you. I'm really not fond of the vibe that this board has taken in the last 4 or 5 months.



This article may be helpful in giving you an idea of what the latest announcement might be able to do for you QH



<a href="http://articles.moneycentral.msn.com/Banking/HomeFinancing/will-the-housing-bailout-help-you.aspx">Will the housing bailout help you? </a></blockquote>


I didn't answer or comment because this thread makes no sense when <a href="http://www.irvinehousingblog.com/forums/viewthread/4000/">he/she started this thread</a>. With that in mind, I don't think the new housing proposal can help him and neither will any of my advice.
 
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