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May need to stop paying mortgage...

Posted on: 28th Dec, 2011 09:09 pm
Things have been tough and mortgage is one of the only things we have consistently paid. We are far from underwater, but we (or my wife) probably are filing Chapter 7 in January, which will not affect the house.

My brother-in-law just came out of the other end of 18 mos. of non-payment on his mortgage with all those payments forgiven (not added to what is now owed), no penalty and a reduced monthly amt. If he pays on time for 3 mos., their new deal becomes permanent.

It sure would be helpful to pull out of our mess by using the monthly mortgage amount for a few months to help get cash flow in the black (with or without ch. 7). How unrealistic is it to think/hope we could also end up with a few months forgiven when we can get back on track (hopefully less than a year)?
Hi booker,

You and your wife should apply for a loan modification immediately with your mortgage lender. It will be discretion of the lender whether or not he will modify the loan. However, you should note that most of the lenders will offer you a loan modification only when you're delinquent on your mortgage payments.

Posted on: 29th Dec, 2011 12:15 am
In my experience, it is definitely possible to get your lender to grant some mortgage forgiveness, but you have to approach it the right way. Most lenders do not have any incentive to forgive, or even grant loan modification, because they have sold your mortgage to another bank or or pool of Wall Street investors. They're just "servicing" your loan (translation: collecting payments) but they no long hold the actual note. If they don't forgive and you go into default or foreclosure, they make more money than if they kept you as a customer.

The best way to ensure that you are successful in getting mortgage forgiveness is to have someone do a quick audit to find out who actually owns your note (the company behind the servicer) and then use that information to get a better deal. I utilized a group called The Aidan Grace Firm and they did a fantastic job!
Posted on: 02nd Jan, 2012 02:52 pm
Thanks for the advice James and TK.

TK, how do you use the knowledge of who holds the note to your advantage? Once I know that, where is the leverage? Also, Wells Fargo is the bank that I deal with. Is it not likely they do hold their own notes?

(I've been trying to figure out how to post back into this thread. Sorry if you already received this directly...)
Posted on: 02nd Jan, 2012 08:12 pm
Hi booker,

The person who holds the mortgage will be liable for paying it. The person whose name is on the deed but not on the mortgage won't be liable for paying off the mortgage payments. So, if your name is not mentioned on the mortgage docs, then you won't be liable for the loan payments.
Posted on: 03rd Jan, 2012 10:34 pm
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