I have worked with Indymac before and their first reply at requesting a home loan modification is always "NO". However, you need to be aggressive and also look at your other options. I have assisted distressed home owners in getting successful loan modifications at no cost, if you like, I can look at your financials and discuss what might be your best option.
Good luck. I know this is a very unfavorable situation for you but you are not alone.
As most of the answers below stress - You need some professional advice right away. You need some legal advice as a starting point to know what your options are and the legal consequences associated with those options. A short sale may not necessarily be your best option. I am an attorney specializing in distressed properties and I'm also a real estate broker. I offer free consultations and would be happy to discuss your situation with you and give you the legal advice you need as a starting point in solving your current situation.
Ted Greene - 916.442.6400
* First, almost 74% of homes in Sacramento are worth less than what is owed. That's not a reason to ask for a loan modification. It's like stocks. The only value that matters is at the point of purchase and the point of sale. If you don't need to sell, don't. But the lenders aren't giving you a loan mod because your house is worth less. On the reverse side, if your home was worth more, would you be willing to give the lender half of your profits? The contract is as the contract was written. If you need to alter that contract (your trust deed), there has to be a compelling reason for the lender to want to do that.
* Your mortgage is owned by an investor or group of investors. Most often Indymac, or whatever lender is working with you on your mortgage, is the servicer, working on behalf of the investor. They must get approval from the investor to accept less than what is owed. So understand, if you owned a mortgage as part of your investment portfolio, you'd need a compelling reason to accept less than what is owed. Which leads to the third, most important question, that will help you compel the lender and the investor to work with you on a loan modification or short sale.
* What is your hardship? If you go to http://www.makinghomeaffordable.com, they actually specify it as one of 4 boxes to check. Loss of income; reduction of income; divorce/death; or other. Without a real hardship, the lenders will not negotiate.
* Last, you must negotiate by sharing your financial information. They are looking for a specific ratio to determine if you can qualify for a loan modification, or should consider a short sale instead. Rarely,( as of Feb 2011) are lenders offering a reduction in the principal balance as part of their loan modification.
While Indymac is more difficult than many others, they are still trying to decide- what is their better alternative? Despite some of the rumors on One West's practices, no bank prefers a foreclosure to working out an alternative if you really can demonstrate a hardship. Don't arbitrarily stop paying your mortgage without getting more education on the best alternative for you. Because if you do short sale, right now you will not qualify to buy another house until 2 years PLUS the number of months that you were delinquent on paying your mortgage. For most people that's really closer to 3 years with the current FHA policies.
I work as both a home retention consultant as well as a realtor. As a home retention consultant I offer a free one hour consultation to review more deeply the points made above. At the end of that conversation, if it's determined that you have a good position to negotiate a change in the loan with your lender, we will call them and get that started for you, call various resources to answer your tax or legal questions, and develop the strategy best available to you.
No matter what way you go, the ultimate answer lies with your lender. It will take good negotiation skills to compel them to change an existing contract.
You do have a few options - and I must preface this by stating that speaking with an attorney or accountant for guidance will be your first step before making any final decisions. The most ethical option is to stay in the home if you can afford it, but everyone understands that it becomes emotionally difficult to put so much money toward something that isn't valued at that amount. You could try a loan remod again, but chances are they'll deny you. I haven't personally met anyone that a loan remod has worked for. If you need to get out of the home you are down to two options - foreclosure or short sale. A short sale is a long and tedious process, but the homework pays off (just like it did in high school) Generally with a short sale there are fewer tax ramifications and less of a credit hit than with foreclosure.
If you need further guidance, contact your attorney, accountant, and Realtor.
Good luck :)
Since you are current with your payments, I presume your credit is good.
Do you one loan or two? Do you have mortgage insurance? When was the mortgage obtained? Was it ever refinanced? What rate are you pyaing now? How much are you underwater?
My first question is usually How upside down are you? We don't want to throw the baby out with the bath water as grandma used to say.
If you can no longer afford to stay, a possibility is a short sale, but yes most lenders will not talk to you until you are behind in payments. Connect with a short sale agent that works in your area, and an attorney and financial advisor, only after knowing your full story can a plan be developed.
There are many solutions available. I would recommend meeting with a trusted and experienced short sale professional to discuss options and also the consequences of each.
Without knowing all of your circumstances...My recommendation would be to pursuit a short sale. Rent for two years and then buy again.
You would need to show hardship - lost job, income, wages, divorce, illness, relocation, etc.
Please call/email/text any time.
I would be happy to review with you at your leisure and of course with no obligations
to you. Very private and confidential - always!
Happy to help.
Keller Williams Realty