Mortgage Trouble?

Question

Currently we are in a two year arm that is going to adjust in Nov '08. I am in MI and we have lost about 50,000 in equity in our home. We are upside down and owe more than our house is worth. We cannot refi. Our arm is going to adjust and we will not be able to afford our house pmt. We DO NOT want to foreclose and our getting ready to call our lender and talk to the home retention dept. and ask for a loan modification. Any advice on how we should go about talking to our lender. Credit is good..were hoping they will modify our loan to a fixed rate. HELP??

Answer 1

First, my congratulations on being proactive about your situation. Too many people wait until it is too late, and their behind on payments. Then they get stuck in an ugly cycle which is extremely hard to get out of.

Be prepared with a financial statement (basically a budget which shows your monthly income and expenses, and demonstrates how you will be in the red when your payments reset in the future).

Also be prepared with a hardship letter - this is a letter which explains to the lender how you are in a position of hardship, and how you will not be able to afford the new payments.

Also, start looking at your options - what you can do to be able to afford the house if you choose to keep it (rent out a room, increase your income, get help from family, etc.), and what you can do to sell it should you decide not to keep it (do a Short Sale, sell to an investor, do a "Deed in Lieu", etc.).

Answer 2

Contact them now! Don't wait. Ask for the lost prevention department. Now, I can tell you this, you will need to be persistant and patient and nice. You will need to give them some time to consider your situation and respond. It may not happen right away.   Also, contact 888-995 HELP, this is an organization approved by HUD to help folks in your shoes.

Please don't wait, nor ignore this.

Answer 3

Lenders don't want REOs (houses they now own through foreclosures) When you speak with them, suggest that there is a solution by which you both can benefit: you can keep your home and continue to be a good customer to them and they don't have another foreclosure to deal with (and the expenses it causes them). The suggestion to modify your loan into a fixed product is a good one. Fixed loans are less risky and lenders prefer them at this time. Speak with them about your strengths (length of employment, good credit rating, etc.) and be open to discuss with them why you currently can't refi. Let them know you are working for a solution to avoid a potential future problem. Calling to negotiate with your lender is most certainly not standard, but these times don't support  the "standard" either. More recently, lenders are willing to negotiate...it's worth a try and you have more of a chance of getting what you're looking for. Good luck.

Answer 4

sorry to hear about your trouble..im pretty much in the same boat...i've been talking to the HOPE now foundation and they've given me different ideas..they will work with you and your mortgage company to try and work something out..a repayment plan, or a loan modification.  their service is free and more importantly, legit..they also gave me other numbers to help out with medical, food..etc call them:

Get Help Call 1-888-995-HOPE (4673)

good luck!