Foreclosure in San Mateo>Question Details

Susan, Both Buyer and Seller in San Mateo, CA

Modification and short sale questions

Asked by Susan, San Mateo, CA Fri May 15, 2009

Unfortunately, I was "sold" one of those "pick-a-payment" loans about 3 years ago when my house had 200k in equity. Planned to refi, but now my house is 80K underwater, and my loan total increases every month because I am now only paying the minimum payment (my rate is 8% and rising). I have kept current by exhausting my savings hoping for a program to get some kind of modification. Talking to my bank has gotten me nowhere. They say wait wait wait while other people I know have gotten help by missing payments. I am lucky to have a job and could afford the loan at a lower rate, but how likely is the bank to go for that? Not freddie/fannie, btw. Should I stop paying to get attention? Or will that hurt my chances of negotiating anything? If I have to go with short sale, do i need a short sale specialist? How is a specialist paid? Already been to every website and (useless) Hope hotline. Appreciate all opinions on my sad, costly loan choice.

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Answers

11
The best place to start is to speak to a San Mateo Short Sale Specialist Realtor. Check out -
0 votes Thank Flag Link Mon May 16, 2011
The world suffered its worst economy during the past months due to recession. The prices of every commodity shoot up to its extremes, affecting every sector. However, this year seem be better after the world recovered from its worst recession ever. The prices of homes have dropped down, which in turn reduced the mortgage rates. You can now have a check of your monthly payments on mortgage and avail amazing mortgage deals from various sources. This can help you save loads of money and also you can avoid missing out your monthly payments.

With this being the ideal time to find excellent deals to find your dream home, you can start looking for mortgage loan. The recent economic depression however has paved way for people who want to get a new house. Well, there is another great option for people who have bought a new house at times of recession with high interest rates. By refinancing, they can lower their monthly payments on mortgage loan. If you fall under this category, then be happy as you could avail mortgage loan at lower mortgage rates. However, if you consider refinancing you need to do some calculation to decide whether refinancing will benefit you through all means. The cost of appraisals and origination with respect to refinancing is higher.

For the full article: http://www.openmarketrealty.com/blog/reduce-monthly-payments…
0 votes Thank Flag Link Fri Aug 20, 2010
Hello Susan and let me say, I am so sorry to hear of your misfortune.

Although you are currently $80K underwater, it doesn't sound to me as though your situation should be hopeless or that the lender should not be willing to modify your loan. What we are now learning, however, is that, although you (as the homeowner) can approach your lender to request a modification or avail yourself of the "free" services, without the muscle of an attorney or the attentiveness of a bird-dog, you'll find more frustration than success. Statistically, the Hope For Homeowners assistance program has performed so poorly that of the hundreds of thousands of requests, as of March 2009, they were only successful in modifying less than 100 loans.

Take Tap's suggestion to call his friend, Ruel Cordoro, about working on your loan modification. If Ruel is an attorney or works with attorneys to obtain modifications, then that's what you want to hear. You can call or email me, and I have two companies that have successfully modified loans for my clients and friends who were in similar situations and they still both own their homes and were able to get a loan modification. Like you, both families tried on their own to work with the lenders, and did not get results until the attorney threatened to sue.

Finally, while short selling is always an option, unless the loan modifier tells you, upfront, that your loan is unlikely to be modified, I would not give up hope in getting this done. I know how you feel, and while short selling is an option, it's not the one that you'd like to exercise right now.

Good luck and let us know if you need any references for loan modification companies.

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
Sunnyvale, CA
Tel 408-426-1616
Email: graceareaprorealty@att.net
0 votes Thank Flag Link Sat May 16, 2009
And just so you know...Diana is being just a little narrow in her answer. She's describing the loan modification program offered by the gov't IF the bank chooses to use it. Loan modification is just as much of an option on your 1st loan as it is on your 2nd if not 3rd, 4th, etc.....Loan modification comes down to being an agreement between you and your lender(2nd's are still a lender of yours if I'm not mistaken)to modify the existing terms of the loan. You have your reasons for a modification just like they have theirs. 2nd's generally happen to have more reasons than 1st's to modify, quite frankly, because they're usually holding worthless pieces of paper and are happy that you're not flat out defaulting on a worthless note. And banks are practiced and taught in ways of telling you "no". Hence the whole reason for 3rd party negotiators. Like you said yourself....you've tried, and got nowhere. How many times have you done this before? Exactly.

Let a professional company handle your affairs and do the tedious work involved in your modifications and the ensuing negotialtions that entails(not to mention the millions of get-nowhere phone calls that you'd have to make). You bought your house with a realtor, right? For many people, homeownership is the single greatest financial transaction they'll make....which is why you enlist someone like a realtor. They've done it before! But I'll bet you checked out your realtor in some way(maybe a referral) before you went forward with them right? Exactly the same thing here. Do your homework on these companies and get this monkey off your back sooner than later....Please feel free to contact me if you have any questions.

-Jason
0 votes Thank Flag Link Sat May 16, 2009
Hi Susan

It shoulds like a loan modification would be your best alternative. There are many questions regarding Loan Affordable Refinancing and the Loan Modifications. Here is some basic information on Loan Mods and Affordable Refinancing: If one of these free government services don't help, then by all means a short sale would be your next alternative. If you stop making your payments, make sure you put that money in the bank so that if a modification is offered to you and if they required you to make up payments, you have the money to do so.

The refinance many times doesl not work for most of us in Southern California because the amount that is owed is more than 105% of the current value. It will also only correct the first, leaving your second still due at the same rate and they would have to be willing to subordinate to the new loan (they usually will).

For those who have been wondering if you qualify for the Home Affordable Refinance Program you can go to http://www.financialstability.gov/makinghomeaffordable/ for more information.

The eligibility requirements for a Home Affordable Refinance are as follows:

• The current loan is owned or guaranteed by Fannie Mae or Freddie Mac (Since the only homes that are eligible for Refinance are Fannie Mae or Freddie Mac secured, how can I find out if mine is?)

For Fannie Mae’s Resource Center, the telephone number is 1-800-7FANNIE or 1 800 732 6643 (8 a.m. to 8 p.m. EST) or inquire online at http://www.fanniemae.com/homepath/homeaffordable.jhtml.

For Freddie Mac, the telephone number is 1-800-FREDDIE or 1-800 373 3343 (8 a.m. to 8 p.m. EST) or inquire online at
http://www.freddiemac.com/corporate/buyown/english/avoiding_…

Alternatively, a borrower may contact the lender or loan servicer to inquire as to whether the underlying loan is owned or guaranteed by Fannie Mae or Freddie Mac.

• The property is an owner occupied, one-to-four unit home

• The maximum refinance loan amount is 105% of the current market value of the property; (on the 1st loan only)

• The borrower must have sufficient, provable, income to support the new mortgage debt

• The borrower must have an acceptable mortgage payment history.

The intent of a Loan Modification: The purpose of the Home Affordable Modification program is to prevent foreclosures by making mortgage payments more affordable for working homeowners who are struggling to keep their homes. This program is not intended to replace lost equity. However, if the program prevents avoidable foreclosures, it will stabilize our property values which will benefit all homeowners. The participation is not regulated, so it changes from bank to bank and it is not required (unless they get TARP funds), but again what they offer you is not set in stone.

Loan Modifications only effect your first mortgage and the criteria is as follows:

• The borrower occupies the property as a primary residence

• The property is one-to-four units

• The loan to be modified is a first trust deed

• The borrower’s monthly mortgage payment (including taxes, insurance, and homeowners association dues) exceeds 31% of the borrower’s gross monthly income

• The borrower has experienced a significant change in income or expense to the point that the current mortgage payment is no longer affordable

• The unpaid principal balance is $729,750 or less (for one unit properties and higher for two-to-four units).

• The loan was originated before January 1, 2009.

In addition to the above, a borrower with a “back end” debt (i.e. monthly housing, credit card and car payments) of 55% or more of his or her income will be required, as a condition for the modification, to enter into a HUD-certified consumer debt counseling program. To find out if you qualify go to: http://www.financialstability.gov/makinghomeaffordable/.

I hope you find this information helpful…I will have the whole Q & A on my Web site: http://www.MargalaGroup.com soon!

Diana 909-945-5763
Web Reference: http://www.dianam.com
0 votes Thank Flag Link Sat May 16, 2009
Hi Susan,

This is a very common problem and you have done all the right things by contacting your lender first. I teach foreclosure prevention workshops and it's on line for free I will attach a link if you want to compare side by side the short sale as well as loan modification options. New data announced by two large lenders yesterday said that 80% of all loan modifications fail after one year. This is because the principle is not written down in most cases. The cleanest way to get out of the 'debt' that you can no longer service is a short sale. You are going to get a 'ding' on your credit but it's a 'responsible' way to get out of a property that you can no longer afford.
I would suggest the video and then call the Certified Short Sale Specialist from Union City. By watching the video you will understand the short sale process in detail and then move forward from there. Here is the link and best of luck!
http://www.foreclosureoptionsnetwork.com
0 votes Thank Flag Link Sat May 16, 2009
Susan,
Like any industry(loan officers, realtors, etc...) you have your unscrupulous people and your honest, hard-working, get-results people. The best way to deal with someone is to research them. I work for a loan modification company that gets results every time, has a sterling reputation, and knows not only the gov't programs but also the lender's own programs to get you the best possible modification. You don't need to miss payments to secure a modification, anyone who tells you that you need to damage your credit isn't on your side or doesn't know what they're talking about(either way is dangerous).

Now, all of this assumes you want to stay in your house of course....otherwise you should shoot for a short-sale. But if you do want to stay in your house, please feel free to contact me(I'm in Belmont) and research the company I work for:

Jason Schumacher
650.291.1106
http://www.choicelc.com
Choice Loan Consulting
Web Reference: http://www.choicelc.com
0 votes Thank Flag Link Sat May 16, 2009
Susan
My recommendation would be that you talk with a Realtor experienced in short sales. Many Realtors have experience, you need to find the best one that can provide you with your options, and the pros and cons of each.

The only blessing you have is that so many people are in the same boat that the government IS trying to help.
I know that it is frustrating. I would be very careful about loan modification companies. Understand all of the fees up front, the possible downside, and the impact on your credit report.

Get it all in writing.
0 votes Thank Flag Link Sat May 16, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Hi Susan, I'm going to help you. Call Ruel Cordero at 650-303-8500. Tell him I referred you. Ruel will charge a very small fee up front.

If Ruel is successful in reducing your debt and payment, then he charge you his normal fee. But only if he is successful. Please do not work with someone who asks for a huge upfront payment. Let them earn their money first.

Please keep me in mind some day down the road, or if you know anyone in the future who is thinking of buying or selling. I'm very confident Ruel will be able to help you.

I wish you well,

Dave Tap Tapper
Realtor
Cashin Company
http://www.DavidTapper.com
650-403-6252
Web Reference: http://www.TeamTapper.com
0 votes Thank Flag Link Fri May 15, 2009
Susan,

I'm sorry to hear your loan situation. Lots of people are having the same problem with these loans. I loan modification is taking time. Well, at this time, do you want to stay in your house or wants to move out. If you would like to stay and have the income to support new payment then loan modification is the best option (since your loan is fannie/freddie then refi is not possible). You can contact the HUD approved counsellors for loan modification, they will do it for free. Let me know if you want the list of contacts nearest to your area.

If you are planning to do short sale, then it would be good to have a realtor who knows how to do short sale. I'm a Certified Short Sale Specialist and can help you to sell your house. You can call me at 510-366-9405 for free consultation. And the best part is our commission is paid by bank, not seller, so it will be a free service. I have experience in negotiating with lenders and successfully closing short sales. Let me know if you would like any help in short sale. You can also email me at blaison@blaisonsamuel.com

Blaison Samuel
Certified Short Sale Specialist
510-366-9405
blaison@blaisonsamuel.com
0 votes Thank Flag Link Fri May 15, 2009
Hi Susan - Unfortunately the banks are overwhelmed and often unsure of their own guidelines. If you stop paying, your credit will be adversely affected. We used to suggest that people do stop paying if they were going to go through a short sale but that's no longer good advice.

If you have to go with a short sale, I suggest you definitely find an agent who knows what they're doing. They're complicated and frustrating enough as it is. The Realtor is paid through the money the bank receives in the sale.

It's questionable at this point whether loan modification services are worth the expense. The government is cracking down on them for poor consumer practices.

I know it's frustrating - believe me - I worked on a short sale for nine months last year. But my suggestion is that you keep trying your bank. Keep trying to get your loan rewritten.

I'm interested to hear what others suggest as this is new and quickly changing territory. Every bank is different in terms of their willingness and flexibility, but the squeaky wheel gets the oil.
0 votes Thank Flag Link Fri May 15, 2009
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