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Hello Kevin!
This is Cowboy…remember me? Sam asked me to email you this situation that we ran into to see if you have any input/suggestions.
The mortgage company we are dealing with is Cit Mortgage. I called to do a status update on the file and got transferred to their bankruptcy department and they said this particular loan does not qualify for a loan modification due to the fact that they filed for chapter 7 bankruptcy and file has already been discharged. The loan needs to stay the way it is.
Sam wanted to know if you have any suggestions what to do from this point?
Thanks for your help!
When a homeowner files BK they are no longer held responsible for the debt although they can keep the loan if hey desire. The lender can do a modification but does not have motivation to do so because they have no recourse.
To get a modification after or during a BK the homeowner must have some leverage, like negative equity. If the home has negative equity you can call the lender back and tell them the homeowner wants to keep the loan if the lender will do a modification but if the do not budge they will walk away.
This is the only thing you can do at this point.
I hope this helps.
Kev
When doing a Loan Modification can you do it with another bank or do you have to use the the lending organization that provided you with the loan?
San Jose, CA
A loan modification is with the lender you currently have. When you modify a loan the only thing that changes are the terms of the loan. If you want a different lender you need to have a refinance. If you have negative equity you need to get a short refinance and this is very difficult.
Have you done loan modification on income property? Can it be done? Self employed borrowers?
Bonita
Los Angeles, CA
Answer:
You can get a modification done on rental property just like you can your primary home. You can also get it done if you are self employed. The only difference is how you prepare your game plan.
I got a modification from my bank a few months ago but they only took my rate down to 7.5% and the payment will go back up after a year. Is it possible for you to get a new modification and lower my rate?
Louis R
Reno, NV
Answer:
Oh boy, you should have gotten a much better rate. 7 1/2% on a modification is not low enough. Most lenders can go down to 4.5% and that is a much lower payment for you. Some times the lenders only give you what they think they can get away with. Remember, the lenders have to do everything they can to get the most amount of money out of you they can. When the lenders deal with the homeowner they know you will take less than we will. We remove all of the emotions out of the equation and it becomes purely business.
What is the biggest challenge you face in getting a modification done?
Terry J
Lancaster, CA
Answer:
The biggest challenge we face in getting modification done is reworking the budget so it fits in the lenders profile.
"I have heard about the new FHA program coming out in October. Should I wait to see what they will do for me?"
Susan P
Stockton, CA
Answer:
I would not wait to see what the Gov does to help you. One thing you need to realize is their program is designed to only help about 400,000 families. Last month we had almost 400,000 that went into foreclosure, so the odds of your family being one of the very few they help are very low. Also, why would you want to wait on them to help you when you can do a better job dealing with your own lender and keeping the loan with them? Your lender wants to help you because it is in their best interest to do so. If I were you I would contact a Certified Mortgage Modifier and have them prepare a package that will give me the best opportunity of success in getting a modification done.
"I am afraid of doing a short-sale on my home because I will get a 1099! Do I have any options left?"
Lynda
Reno
Answer:
Lynda, you can still perform a short-sale and get out from under your financial mess. If I were you I would consult with an accountant that specializes in Insolvency issues. Find the best accountant you can, and if you need me to recommend one to you please email me and I will send you the phone number.
You may not even get a 1099 at all. You will only get a 1099 if you did a cash-out loan. If the loan was purchase money then you have nothing to worry about.
"I called my bank and they told me I had to be behind on my payments to get a modification, is that true?"
Thank you,
Joan
Fresno, CA
Answer:
No, you do not have to be behind on your payments to get a modification done. You may have been speaking with the collections department. You need to speak with the Loss Mitigation Department and tell them you are being proactive and know that you can not afford to keep making the same payment and ask them to lower your rate.
"I have two loans on my home can I still get a modification done?"
Tyrone
Phoeinx, AZ
Answer:
Yes you can still get a modification done. I would work on both loans at the same time.
"I lost my job and have no income at the moment. My lender told me that they would not work with me because I have no income. What can I do as I am afraid I am going to loose my house?"
Whalen
Sacramento, CA
Answer:
When do you think you will have another job or at least some type of income? The banks do not want your house; they want you to make your payments. The reason they told you that you did not qualify is because they do not want to give you a modification now and then come back and foreclose in the future. They would rather foreclose you now and move on. We need to see how long you may be out of work and what you expect your new income will be. Ask the bank to give you a forbearance for 90 days to get your finances together and then lower your rate to make your new payment more affordable.
