BiggerPockets

They're not actually asking you to go into default, they're just saying they won't do anything until you do.

I wouldn't do anything for another week or two. The details on Obama's new foreclosure prevention plan should come out next week.

That said, if your family income has fallen by 60% and there's nothing you can do about it, it may be tough to bring the mortgage back in line with what you can afford. Can you just sell the place? Countrywide may be willing to do a short sale.

I work with an attorney that tell people they have to be 3 months late before the bank will take a look at the problem. It is not a problem until the bank is being hurt. As far as the bank asking to default, that is a new one. They do look to see if you are current or not before the conversation starts when you call in.

WOW, ok, that changes the WHOLE topic.

you need to call them and talk to them about a hardship modification.

BECAUSE you are in default is why they SHOULD assist. call and ask them again. it's amazing how talking to someone different can yield a different answer. keep calling. it shows that you are really trying to do something.

wow john, way to get on-board behind the current president. it's only been what? 35 days?

i hope that you said the same things during president bush's wonderful policies.

So...the wifey heard Obama on the news saying something like, "It is not okay for a mortgage company to ask someone to go into default"

We can scrape together payments, it'll be tight, but they want their back payments in one lump sum. We cant' hack that, but we can hack monthlies on a slightly irregular schedule.

Letter of hardship. I sent one. We sent abotu 30 pages of stuff and a request for modification (along with the letter of hardship) to their Hope department.
I explained the cut in income, and that I'm in charge of security at the nation's largest insulin production facility. I then explained that I'm taking a class that ends in May that will make me eligible for employment at this insulin plant. So, if we could cut our payments in half until August or so, we'd be more than willing to add them to the end of the term."

Their respone, "No."

from what I have heard homeowners dont usually get the best results when trying to do the modification themselves. Attorney based services that are properly licensed with their state seem to get good results, the only problem is they are pretty expensive... and if you had the money for the loan mod you would have the money for the mortgage payment.
If you can stomach the fee that might be the best way to go though

haha im not selling any!

Tyler,

A homeowner can do on their own what any consultant can do and charge them for. Most banks don't like consultants because 99.9% of them don't know their head from a whole in the ground. This is the sad truth.

Noe,

You cannot pick what options you want based on what is best for you the homeowner. The bank goes down a checklist and does workout options in a certain order. You either qualify or you don't. Calling back and talking to someone else is not going to work because the system will be documented about what happened and why so the chances of getting another rep and them doing something outside the box is essentially nil in my book. Of course anything can happen and I have seen some crazy things but I wouldn't count on this type of thing helping you.

Christopher,

Their was someone on this forum who posted that they did a work out without being delinquent so I don't want to say it is impossible. But I have never seem it happen in all my years in loss mit and remain skeptical of it happening. Granted, being delinquent before being eligible for a workout seems crazy from the homeowner's view but from the bank view, as stated, why would they lower their revenue stream to be a nice guy? Their job is to lend money. Period.

The reason you didn't qualify is because the numbers say you can't afford the home on your reduced income. Going from 40k to 15k in income that shouldn't be much of a surprise. Before you are eligible for any workout option to stay in the home, you have to show continued affordability of the home. If you can't, then you don't have any realistic options to stay in the home. I know that is not what you want to hear but that is the way it is.

Having said that, I do feel for your situation. I would recommend trying to sell and if that doesn't work, your only options are probably a short sale or DIL.

Good luck

Mike C

John Andre,

The 3 month cut off you are referring to is where the lender formally moves the workout process from their customer counseling (i.e. collections dept) department (0-3 months) to their loss mitigation department. That is standard practice although they may have different names for the departments. The loss mit department will try hard to not to be involved in the process until the 3 month delinquent time period has passed and will probably not even look at it until that point, with rare exception.

Good investing all

Mike C

Hey Mike
I agree with you that they could do it themselves but most people are intimidated and or hear no once and give up. The loan mod business is the wild west to say the least and that is why I would be very careful but with people like CW and N******l C*** sometimes its the best option. Either way Christopher I wish you the best of luck!