Mortgage Distress

Guest

I divorced about a year ago, and with back support money attached to the regular child support costs, I am seeking loan modification options with my lender to ease my financial situation. I have sent in letters of distress, make regular phone calls to my lender, and am now behind a few months on my mortgage. My frustration lies with the delay from the lender, unable to send the loan modification paperwork, and continue to work with me in a timely manner. If I don't get help in the coming months, foreclosure is in my future. I have good credit, and am concerened for my financial future. Can anyone give me further advice about other options to consider or what urgency I can give my lender to ensure mortgage stability.

jameshogg · Posted: Wed Mar 04, 2009 8:37 pm Post subject:

Hi Guest,

It is totally the discretion of the lender whether to accept your request for loan modification or not. As they are taking time to complete the process, you can give them a call and request them to speed up the process. You can inform them that you are concerned about you credit and thus you want them to complete the process of loan modification quickly so that you can start paying the dues.

Thanks

Jessica · Posted: Fri Mar 06, 2009 6:17 am Post subject:

Hi,

You said you have good credit. Well, I don't think you'll be able to maintain it now. This is because you're already behind a few months on your mortgage payment. Just pull your credit report once and purchase your credit score as well. You need to get an idea as to the number of points your score has dropped down.

Now regarding the delay in loan modification, I'd like to know how long has it been since you've applied? The fact that you're behind could help you in getting an approval for the modification. Did you ask the lender why there's a delay in the proceedings? Perhaps he needs more documents in order to check your financial situation. By the way, how's your income?

As mortgages rates are low currently, you can go for a refinance with the same lender or you may shop around for competitive rates with different lenders. Are you ok with the refinance? As of now, refinance seems to be the solution to your problem.

However, there's the Mortgage Bailout Plan being introduced by the Obama Administration, which can help out homeowners in distress. Low rate refinance and loan modifications are part of such programs. But it'll take some time for such programs to be implemented. I think you should just keep in touch with the recent developments so that in case of any further problems in your mortgage, you can approach your lender for a loan modification or other suitable options that the lender is willing to work out with you.

Regards,

Jessica

Guest

Thank you for the input!

Jessica, I spoke with my bank & lender about 4-5 months ago, letting them know the situation, and need for assistance. They said they could do the loan modification program, but fail to send any further paperwork, or ask for any information from me. They cannot give a good reason as to the delay in the proceedings, and I call weekly to keep on top of the situation. Now, I am behind 3 months on the mortgage. I continue to call them, on a weekly basis. I have good income, but due to the child support costs, I will be unable to pay the full mortage at this residence, unless it is modified substantially lower rate.

I'll look into the refinance option, and I've been keeping up to date on the Bailout Plan as well. Unfortunately, because I'm already months into the situation, time is of the essence for me.

Do you have any knowledge as to the average percentage home owners receive from the loan modification? Is their mortgage substantially lowered, or is it only by a small percentage?

Thank you very much for your assistance!

Samantha · Posted: Mon Mar 09, 2009 6:23 am Post subject:

Hi,

I think the figures regarding principal/rate reduction vary with individual situation. It's good however, that you have kept yourself updated with the recent market developments.

I understand there is less time but you can still shop fast for a refinance as Jessica suggested. It won't take that long. But of course don't end up dealing with a lender who'd be ready to give you a loan in just a few days. The lending criteria now are quite tough and it'll take at least 45-60 days before you actually get a mortgage.

May god bless you

Samantha

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