Late Mortgage payments...

[Anonymous]

Hello everyone, Happy New Year !!!

I have a 700 fico score and I really take care of my score, I don't want to mess up with my credit but I need to get a loan modification, (right now I have variable rate, high mortgage insurance and the property cost half than my balance).

-I own $ 235,000   (originally the mortgage was for $ 225,000)

-I have a line of credit of $ 25,000 base on the same home

-This is my primary home, my first and only.

-I have $ 30,000 in credit cards debt 

-No car payments.

I'm planning in going late in 2 payments of my mortgage, so I can negotiate with HomeComings to get a loan modification.

My question are:

How big is going to be the impact in my score ?

How many chances do I have to get the modification ?

Do I need professional help to do that ?

Anyone to share experience doing something similar with Homecomings? 

Thank you so much to everyone in advance !! I'm really worry for this situation.

[marty56]

Welcome to the forum.  If I understand you correctly you want pay your  mortgage payment late so that you will qualify for the loan modification program.  If so that is a very bad idea.  At best, It will sink your score 50+ points.  At worst it will do that and possible get you forclosed on.

Why dont you just work on improving your FICO score and then do a re-fi later.  Many people here can help you with that.

Message Edited by marty56 on 01-04-2009 01:15 PM

[Lel]

---

@Anonymous wrote:

Hello everyone, Happy New Year !!!

I have a 700 fico score and I really take care of my score, I don't want to mess up with my credit but I need to get a loan modification, (right now I have variable rate, high mortgage insurance and the property cost half than my balance).

-I own $ 235,000   (originally the mortgage was for $ 225,000)

-I have a line of credit of $ 25,000 base on the same home

-This is my primary home, my first and only.

-I have $ 30,000 in credit cards debt 

-No car payments.

I'm planning in going late in 2 payments of my mortgage, so I can negotiate with HomeComings to get a loan modification.

My question are:

How big is going to be the impact in my score ?

How many chances do I have to get the modification ?

Do I need professional help to do that ?

Anyone to share experience doing something similar with Homecomings? 

Thank you so much to everyone in advance !! I'm really worry for this situation.

---

Are you able to afford your mortgage and credit card payments, or have you had a change in income that makes this difficult?  This is going to be an important factor when you approach Homecomings to request a modification.  If you are not experiencing any financial hardship, then you might not be able to secure a modification.

When does your ARM start to adjust?  Keep in mind that with most ARM indices running so low, a reset of your rate in the near term might actually reduce your interest rate.

What is the current market value of the home, and what is your total home loan debt?  You mentioned that you have a HELOC, but did not say how much of this you are using.  If you have a substantial amount of equity, you may be told to do a conventional refinance rather than be given a modification.

You do not necessarily need to use a third party to negotiate a loan modification.  In fact, you should be very, very careful about these services that offer to help modify your loan for a fee.  The majority of them seem to be scams that prey on desperate homeowners.

There really isn't a fixed number of "chances" that you have to request a modification.  Some people get denied a few times before finally being able to get a modification.  However, if you are given and accept a modification, then that's typically only one you'll get for the life of the loan.

I would NOT voluntarily stop paying your mortgage until you have more fully examined your situation and figured out what your chances of modification might be.  If your situation is not well-suited to a modification, then you'll get denied and will be stuck with irrevocable late payments on your credit report.

Also, it is myth that you must be late in order to get a modification.  I got a modification and was never late on a single payment.

Message Edited by Lel on 01-28-2010 01:03 PM

[Anonymous]

It appears that the house is underwater if I read it correctly.

Also, having the HELOC will make getting a loan mod a littel harder.

Lastly, they do usually want some reasoning behind loan modifications.  That has loosened up now to a degree, but they do want to see a reason things went for the worse.  You loan resetting and the value decreasing is not usually a reason.  As far as they are concerned, the value of the property has nothing to do with the loan agreementyou made, and the adjusteable rate loan will probably go down currently with rates so low so the ARM is not a legitimate reason.  If you are jsut wanting out from under an underwater loan and HELOC/ATM then the banks are alot less forgiving.  Was their a job loss/income restrictions/medical, anything to give them something to work with. 

[Anonymous]

Also, 30 K in cc debt will make it less likely for them to mdofiy without good reason as that much debt puts you at a higher risk of further default.

Other answers...

2 lates will drop your 700 FICO to probably under 600 (580 or so would be my guess)

I think your best bet is to just call your bank, but expect to get alot of runaround and expect to have to sell your story to them.  Do not hire a company, they will charge you money and in the end, the bank will still be looking at the exact same info that you could provide them to base the decision on.  What we need to know to give more help is your total income, monthly bills, etc as well as how much of the HELOC is in use and what your utilization % is of your credit cards so we have a better understanding of your situations. 

Last, what are the reasons that you need a modification.  The ARM is not an immediate concern more than likely as your rate would probably drop or stay close to where it's at (unless you did an option ARM or interst only and now have to start paying more as well as the ARM resetting....)  If it is just due to the drop in house pricing then you may have a hard time getting any modification.  If their are mitigating circumstances then you can give the bankers something to look at.

[Lel]

It's not clear to me that the OP is underwater.

In my situation, having a HELOC - nearly maxed out with a limit >$90k - had no bearing whatsoever in my loan modification.  HELOCs have an effect only insofar as the payments represent an additional monthly expense that has to be factored into the first lienholder's decision to modify or not.  In some cases, having a HELOC might actually improve your chances of getting a modification, because if your total home expenses (i.e. combined mortgage payments) is over a certain ratio (in the 33-38% or gross income range), then the first lienholder might be more inclined to modify in order to bring the total outlay below that threshhold.

My primary reason for seeking - and ultimately getting - a modification was because I wanted to get out from under an ARM, even though it wasn't going to reset until 2011.  At the time I was given the modification, if my interest rate had reset at that time it would have gone down to about 5%.

It varies with lender.  It doesn't hurt to try.  The OP has to make a convincing case to Homecomings, and perhaps he/she will get some relief.

Message Edited by Lel on 01-28-2010 01:04 PM

[Anonymous]

I agree that it never hurts to try by all means

As far as underwater the OP said "and the property cost half than my balance"

I took that to mean the OP was underwater on the mortgage.  It might not mean that as it is a little hard to read.

As far as the HELOC goes, it all depends on the situation, but with 30K in CC debt and a heloc the debt load itself is high no matter what the loan mod does.  I have heard that to really have a good chance of getting one pushed through they want to see one of two things in most cases (if the modification is requested by owner and not an offer by the bank...)  They want to see extenuating circumstances that give them reason to work through it, and/or they want to see that once they do this, payments/debt will not be a problem.  If they are afraid it will deafult eventually anyways due to credit load then this can be a problem.  Again, each bank and situation is different.  I got a mod offer on my 3 month old mortgage from the lender just trying to keep up with the market (I said no to it)

Either way, it can not hurt to try at all...Just do not pay someone to do it for you.

[MattH]

The original poster should NOT skip payments without first doing EXTENSIVE research into the consequences. Not only should s/he spend at least a few hours browsing this board, but also s/he should read the following two items with very close attention:

Post 1

Post 2

As the end of the second post says:

Conclusion: keep your eyes on the prize. Although a lender is not your friend, neither is the lender your enemy. Loan servicers want to do something that’s good for the company, safe for themselves personally, and likely to work. They make these judgments based largely on statements you make and evidence you provide to support those statements.

They care about the answers to two questions:

Why are you in trouble? Whatever explanation you give, it had better be the truth.

What’s the best way forward? Your goal is to demonstrate that foreclosure, although administratively reliable, is a very risky financial path, whereas modifying with you, however it may sting, is reliable.