In April 2008, I sent a letter to my lenders requesting a permanent postponement of the impending increase in my mortgage payment amounts. I purchased my home in June of 2006 for 270,000. Like so many Americans, I was eager to purchase a home and obtained an Accelerated Rate Mortgate otherwise known as an ARM loan to do so. My realtor assured me that after two years I would be able to refinance my home and get into a fixed rate loan so long as I made my payments on time. By the April of 2008, it was clear to me that I was not going to be able to refinance my home although I had made the payments on time. At that point, my house had already lost $50,000 in value from the time that I purchased it, and housing prices were continuing to rapidly decline. Because I was upside down in my loan, I could not sell the property unless my lender would agree to a short sale. I was warned that if I did a short sale on my home I would still face paying taxes on the deficit between what I sold for and the amount that I paid to purchase the home. Knowing that my ARM was set to go into effect in June 2008, I sought to protect myself in advance.
My loan increased in July 2008, and I had yet to hear back from my lenders about my request despite several attempts to get an answer from them. They continued to tell me that my request was under review. Over ten months later, my lenders told me that my request was denied and that they could not modify my loan because I did not make enough money to show that I could afford the home. It seems oxymoronic when you think about it. Lenders will not help lower the payments of existing homeowners if the homeowner does not make enough money. It seems obvious to most people that the way lenders reason is counter productive. Obviously if I made more money, I would not need a loan modifcation to begin with. I was furious that it had taken almost a year to get back a response only to be denied.
When my request was denied, and my loan payment increased for a second time within a year period, I decided to make a drastic decision. I was going to stop paying my mortgage. A few people from home modification companies told me that the lenders didn't see any reason to work with people who were continuing to make payments; in the eyes of the lender, I was paying, and therefore, I did not need a modification. Another reason that I stopped paying my mortgage was because I didn't see the point in continuing to make payments on a home that the ARM payments were going to force me out of eventually. And, to top it off, houses on my block were being sold for over $100,000 less than what I originally paid for my home.
My hopes were dismal. I didn't know what to do, and I was too embarrassed about my situation to tell anyone. I called several companies for help, and I was told that because of my debt-to-loan ratio, I would not be able to qualify for a modification. My lenders advised me to short sale, but I wanted to keep my house. It was my home afterall.
Help finally came when Obama was elected into office and enacted the HOPE for Homeowners Plan. At first, it didn't seem any lenders were going to use it, but then it became mandated for lenders to try to help homeowners stay in their homes. I hired an attorney to help me modify my loan. At first, I was leary because of all the modification scam artists out there, but after careful research, I found a legitimate attorney who had a moneyback guarantee.
Getting a modifcation offer took longer than the attorney originally stated it would take. I was told it would take from four to six months. It was over six months before I got a modification offer from my second lender. The offer stated that after I made three probationary payments on time (this is a part of the Obama plan), then my mortgage would be modified. Last month, I made the final probationary payment, and my loan modification is currently underway.
The lender on my first loan, the primary lender, only now has just offered me a forebearance plan. It contains the same probationary period payments, and then after the three month probationary period, my loan is to be modified to a fixed amount, God willing. The lender did include a warning that after I submit the documentation required to get the probationary period started, I might still be denied if the documentation I send doesn't qualify me for a modification. My attorney believes I will qualify, and I'm praying that I do.
I still don't know what my ultimate mortage payment total will be, but I do know that whatever the payment is, it will remain the same for the rest of the life of my loan without any increases- And, that is a good thing. The forebearance payment on my first loan is already $600.00 less than it was prior to my obtaining a lawyer. I'm praying for good things to happen for me and all others in my same predicament.
I wanted to share my story so that others who are facing foreclosure know that there is really hope for homeowners to save their homes. It is likely that if you are a homeowner facing foreclosure you will have to hire a lawyer to get your mortgage modified. Lenders are more likely to negotiate with a trained attorney than a desperate homeowner with little knowledge of the current laws.
Best of luck.
My loan increased in July 2008, and I had yet to hear back from my lenders about my request despite several attempts to get an answer from them. They continued to tell me that my request was under review. Over ten months later, my lenders told me that my request was denied and that they could not modify my loan because I did not make enough money to show that I could afford the home. It seems oxymoronic when you think about it. Lenders will not help lower the payments of existing homeowners if the homeowner does not make enough money. It seems obvious to most people that the way lenders reason is counter productive. Obviously if I made more money, I would not need a loan modifcation to begin with. I was furious that it had taken almost a year to get back a response only to be denied.
When my request was denied, and my loan payment increased for a second time within a year period, I decided to make a drastic decision. I was going to stop paying my mortgage. A few people from home modification companies told me that the lenders didn't see any reason to work with people who were continuing to make payments; in the eyes of the lender, I was paying, and therefore, I did not need a modification. Another reason that I stopped paying my mortgage was because I didn't see the point in continuing to make payments on a home that the ARM payments were going to force me out of eventually. And, to top it off, houses on my block were being sold for over $100,000 less than what I originally paid for my home.
My hopes were dismal. I didn't know what to do, and I was too embarrassed about my situation to tell anyone. I called several companies for help, and I was told that because of my debt-to-loan ratio, I would not be able to qualify for a modification. My lenders advised me to short sale, but I wanted to keep my house. It was my home afterall.
Help finally came when Obama was elected into office and enacted the HOPE for Homeowners Plan. At first, it didn't seem any lenders were going to use it, but then it became mandated for lenders to try to help homeowners stay in their homes. I hired an attorney to help me modify my loan. At first, I was leary because of all the modification scam artists out there, but after careful research, I found a legitimate attorney who had a moneyback guarantee.
Getting a modifcation offer took longer than the attorney originally stated it would take. I was told it would take from four to six months. It was over six months before I got a modification offer from my second lender. The offer stated that after I made three probationary payments on time (this is a part of the Obama plan), then my mortgage would be modified. Last month, I made the final probationary payment, and my loan modification is currently underway.
The lender on my first loan, the primary lender, only now has just offered me a forebearance plan. It contains the same probationary period payments, and then after the three month probationary period, my loan is to be modified to a fixed amount, God willing. The lender did include a warning that after I submit the documentation required to get the probationary period started, I might still be denied if the documentation I send doesn't qualify me for a modification. My attorney believes I will qualify, and I'm praying that I do.
I still don't know what my ultimate mortage payment total will be, but I do know that whatever the payment is, it will remain the same for the rest of the life of my loan without any increases- And, that is a good thing. The forebearance payment on my first loan is already $600.00 less than it was prior to my obtaining a lawyer. I'm praying for good things to happen for me and all others in my same predicament.
I wanted to share my story so that others who are facing foreclosure know that there is really hope for homeowners to save their homes. It is likely that if you are a homeowner facing foreclosure you will have to hire a lawyer to get your mortgage modified. Lenders are more likely to negotiate with a trained attorney than a desperate homeowner with little knowledge of the current laws.
Best of luck.
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