Loan modification help!!!!!

[cazz]

Hey guys It feels good to be back on this site. You all have helped me so much in my home journey. Well  let me get to it. I got my beautiful home in November 2013 and i absolutely love my home I got laid off fom my job in January 2014 which was horrible but i found an even better job in march 2013 I of course fell behind on payments so I requested a loan modification. My first request was denied because they said i didnt make enough money to cover the modification. I checked and they didnt receive all of my income. so i got my utilitiies put on a plan with the state to where they are only $10 per month and i lowered all of my expenses  so I can now afford my payment but of course my mortgage lender (US Bank ) is no  longer accepting any payments from me and they sent me a letter saying that they are about to start the forclosure process. I am currently 6 months behind and they alowed me to submit another loan mod application but i'm afraid it wont be approved. Any info will help... Also i'm remaining hopeful that it will be approved so that i can keep my home but if it doesnt are there any other places that i can go through for a loan modification?

[StartingOver10]

I don't know the answer to your question. I am so sorry you had these terrible issues immediately after closing.

From your post you closed in Nov 2013 which means your first mortgage payment was due Jan 2014 and you lost your job then. Did you make that payment or was this a first payment default?  A first payment default or any early payment default within the first year is handled differently than someone that had their mortgage and paid on it timely and then had difficulty.  The lender looks for fraud in the application when there is an EPD (early payment default). Naturally yours was caused by a job loss but you will have difficulty getting any modification on this loan without paying all that you owe (all the six months plus penalties plus attorney fees). And even then the lender may not go for it simply because of the timing of your default.

Do some research on EPD and risk.

[StartingOver10]

One more comment about the EPD:  the originating lender has to buy back the loan if you default in the first year because of this presumption of fraud in the case of EPD.

Here is a link so you can see into the minds of Freddie Mac (fannie is similar) http://www.freddiemac.com/singlefamily/pdf/fraudprevention_practices.pdf

[cazz]

hi thank you for your response. I had some savings so I missed my first payment in april or may i believe. I asked US bank before submitting my application about the modiification ( because they came to be to do the loan mod) It definitely wasn't fraud and they said they are not worried about that but if it doesnt go through I am prepared to pay the full amount when i get my tax return i just dont want that to be the case. So are there any other ways to get a loan mod without going through my mortgage bank?

[StartingOver10]

A modification is  a change in terms to your current contract. Only the parties to the contract can modify the terms. You can only modify the terms with your current lender. Now, it might be helpful to hire a legitimate attorney to help you with the mod because the lenders will be more receptive when an attorney is involved.

Be very careful though, because there are many people out there presenting their services as "attorneys" that can help you and they do nothing but take your money. So do your due diligence. Find someone that is an actual attorney that has experience with modifications.

[cazz]

Thank you all for all of your advice. My mortgage company (US Bank) approved my modification with the government hamp prgram. I'm still not 100% sure what that is but im currently doing research on it but no matter what it is its better than foreclosure and i am so happy and grateful that i get to keep my home. they also lowered my payments from 960 to 800 per month which is a plus. they said as long as i make my feb. mar. and april payments on time then my modification is permanent which shouldnt be a problem. again that you all for the help. I am now considering filing chapter 7 bk due to all of my cc debt. I know this may be moved to the bankruptcy board but i just wanted to know if it was a smart thing to do. i have about 10,000 in debt and i think it would be smarter to file and start with a new slate any suggestions?? ill also post this on the bk board thanks everyone!

[StartingOver10]

Congratulations on getting a modification! Sounds like you are in a trial mod. Make sure you follow up with the bank immediately after your trial mod to make sure you are put on a permanent modification. Sometimes they try to stretch out the trial mod to six months rather than 3, so keep in touch with the servicer.

As to filing bankruptcy over $10k, I really hesitate to say this, but I don't think it is a good idea at all. I don't know what would happen to the trial mod if you filed Bk. A bankruptcy essentially breaks the contracts you have with your creditors, including your mortgage contract because all of your creditors are put in the Bk, including the new mortgage modification. Be very careful here.

It seems to me that you could do better with the attorney fees that go to the Bk attorney to negotiate with the various creditors. Check daveramsey.com