HI -- Good news finally! I actually went through an org called NACA and also personally called my Lender (Country wide) last November. They said they will look into it and they sent a letter via fedex last week. I was in 7yr arm interest only at 5%. My rate got changed to 2% for the remainder of the term (Which is 24 years. So my payment remains the same and i will be paying some principal too instead of interest only. Hope i can hang on to a job and ride it out until i can sell my house. My house is underwater by 150K.

dp1 said:raringvt said:I've been following this thread for a while with hopes that it would have some good info...boy have I been disappointed. I came across a robust forum that discusses the topic though:

loansafe.org

The forums are packed with success stories on mods & refis. Sounds like things are starting to move along. I'm currently going through the process of applying for a mod (lost my job) and have found some useful info there.

Hope it helps.

raringvt, great site, very helpful information.

Quick question to all regarding my situation:

House bought for: 450K
Current Zillow estimate: 375K
Loan Payoff Amount: 150K
Area: Chicago area

Can I be eligible for loan modification, on the reason for losing job in next 30 days. I have always been on time and actually paid more when I could. What are my options?

why would a bank modify? They can foreclose, sell the house, and get repaid in full.

you are at 50% LTV they will not help you.

The Obama programs are only for people around 80-125% LTV.

No lender has any incentive to adjust your loan since they will be repaid in full if you stop paying the loan

DamnoIT said:While it may be worth it to stay in your home, people should be aware of the consequences of entering the program.

121 pt drop in the trial

“My FICO score and ability to get credit is in danger,” said Stern, 64. The limit on his credit card, which he relies on for business purposes, was slashed to $500 from $15,000. “This program is helping with payments on one side, but then hurting your credit on the other, so you wind up behind the eight ball.”thats from a perfect credit score, but most people in trouble already have 1 or 2 late payments, which cause the same kind of drop to a perfect credit score...so its not going to hurt to ask for a mod if you are already late.

However, if you have perfect credit, a mod can indeed result in a credit score drop.

I came on to post the same article. A friend of mine managed to get a mod w/ Citi, but he said it dinged his credit score pretty badly--he didn't know it was coming, no documentation mentioned it when he was going through the process, nobody said anything to him about it. He said the only reason he noticed the drop was that a credit card slashed his CL due to a "periodic review" of his credit.

DamnoIT said:While it may be worth it to stay in your home, people should be aware of the consequences of entering the program.

121 pt drop in the trial

“My FICO score and ability to get credit is in danger,” said Stern, 64. The limit on his credit card, which he relies on for business purposes, was slashed to $500 from $15,000. “This program is helping with payments on one side, but then hurting your credit on the other, so you wind up behind the eight ball.”

I received a Fedex today from Suntrust. In short, they sent me paperwork for a 3 month trial mod. The reduction would be almost $1,000 per month. No details as to how they arrived at that figure or what the mod would look like to get it to that level.

It says we have until 9/1 to accept and make the trial payment. I guess after that, they review the situation more and make their final decision on the permanent modification.

My wife and I both have 750+ credit scores, and I hate to see them get whacked...but $1,000 a month for a ~100 point (guessing) score drop sounds like an OK deal. If we're staying in our house, don't buy new cars and have little need for credit for a little while it shouldn't be such a bad thing. Not to mention the "incentives" for on-time payments add up to like $5000 over 5 years--I think. In my opinion, this could be the deal of a lifetime--assuming the mod gets finalized.

What are your thoughts on taking the credit score hit?

fozzy13 said:And not to sound harsh, but if you need the loan mod badly enough to apply in the first place, why would you care what it does to your FICO? Would you rather go into foreclosure?

Not exactly facing foreclosure right away--we have savings and other assets that could be liquidated if necessary. Due to job elimination, also not sure if we plan to stay in the city we're in for the long run. In my opinion, going through with the loan mod is a definite decision that we intend to remain--especially given the hit to the credit score.

Your thoughts on the credit score hit are certainly interesting. I hadn't heard that the credit hit would be wiped when you go into permanent mod. Who is your lender? Anyone else know if that is typical?

I wish there were more data points in this thread. I'll add one. I've been helping our nanny with options for her home. She bought in 3/2006 and put 20%. She did a no-doc loan with Countrywide for ~$344K. They put her in a jumbo IO 5/1 ARM at 6.75%. To add insult to injury, they made her pay a point. Really, she shouldn't have spent so much on a home. English is her second language.

Today, her down payment is wiped out and the home is likely worth ~$340K. She's paid a whopping ~$2K of principle in the last 3.5 years. So she's right around 100% LTV. Bank of America rejected her for a loan modification. Her monthly net income is right around zero. She's self-employed and has income documentation. The MHA loan officers gave her some options that don't seem very favorable. She can refi to a 30-year PITI at 6.25% with .75 points and full closings costs. Alternatively, she can do a full PITI 5/1 ARM at 5.5% with 1.625 points and full closing costs. With the new ARM, she cannot roll the points into the loan. In both cases, her new payment is very close to OR more than her current payment.

Thoughts, criticisms, and ideas are welcome. After reading above, perhaps I should try hooking her up with NACA?

smilesdotcom said:thinwallet4d said:Get a home equity loan as large as you can. Numerous options from there.
Please elaborate. How does a large HEL give me more options?

Because it turns equity in your house into cash. That gives many options.

As an example, make the assumption that the poster has no alternative source of income and can then not make the payments after loosing the job. Foreclosure may wipe out his equity. One option (I don't suggest doing this) is to take the cash and put it on black. 50% (almost) chance of solving his problem. A more conservative option would be to take the cash and continue the monthly payments for both the loan and the mortgage to buy some time. The interest on the loan makes this expensive, but it's an option.

My examples may not be the best options available, but possibilities exist with cash in hand that you otherwise don't have. When the downside is losing it all, I can see taking drastic measures.