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Help!
blaurentnv wrote in filk_friendly
Well, I did not expect to be needing help any time soon. However, I've ran into a problem. As some of you know, I had surgery last June and had a reduced workload for a while after that, reducing my income. We contacted our mortgage company both before and after and have been working on a workout plan. The latest information I had from them was in my account information on their webpage, which said "Your Loan Modification has been approved, and all collections activities have been suspended as a result of this approval." I've been making the payments on time or early for the amount requested while they reviewed the workout.

This week, I received 2 phone calls from them indicating that they wanted a chunk of money right now and that our loan was in default. Today, I received a "Notice of Intent to Accelerate," which is the first step towards foreclosure. It gives us until March 14 and wants the missed payment around the time of my surgery and the accumulated difference between the amount that they asked me to pay during the evaluation of the workout information and regular payment. This adds up to about $5k, possibly lest (depending on how they dealt with the payments that I've sent since their balance calculation; the person on the phone today used a number around $3k). I asked about the approved workout and he tried (or said he would try) to connect me to a supervisor. After a lengthy hold, it switched to a busy signal and disconnected me.

I'm hoping that this is just a case of the left hand not talking to the right hand, and it'll get sorted out and we'll have an appropriate workout plan. However, I believe that due to the tight deadline, I need to do contingency planning.

I think what I need at the moment is moral support and any information any of you have about fighting this kind of problem. A referral to an inexpensive lawyer in California that has experience with this kind of thing would also be helpful. If we wind up with no option but to pay them the money they are asking, I'd like to know if there are any resources I can tap. Our old house in Wells, Nevada is still for sale, so I would expect to be able to pay back the money when/if that house sells.

Thanks.

Bob Laurent

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Disclaimer: I am neither a lawyer nor a banker

Does the website still show "Your Loan Modification has been approved, and all collections activities have been suspended as a result of this approval."? If so, take a screenshot or printout right now, as it's documentation you might want if it changes later.

Then, try calling them back (since you got disconnected), mention your workout and that you just received that notice, and ask for the status of your workout plan. Ask to be transferred to supervisors or the workout department as appropriate.

It could be that your workout was not approved for some reason, which would sned you back to collections again. In that case, it's important to find out why it was not approved (mostly so you can find out if they made a mistake or if you didn't qualifty). If they made a mistake, you can probably get sent back to workout again pretty easily for them to try again (my guess is that most actual paper-pushing work is being done by low-paid temps in a cube farm somewhere, so mistakes do happen). If you don't qualify, find out if there is anything else you might qualify for. If you can pay the original monthly payment but are having trouble with the lump sum of back payments from the time you were off work, emphasize that in your negotiations, since it implies that this is a one-time problem to be gotten past.

If you can't afford your original monthly payments it's much harder to make a deal, since that requires them to either lower your interest rate or extend your mortgage term to get the payments any lower, both of which are not good ideas from their perspective, particularly if you're in the first few years of this mortgage since then most of your payment is going to interest right now and there's just not much wiggle room to work with. It's not a good idea for them to take a payment that's less than the interest, so they generally won't set up a plan for less than that amount. If they don't set up one where you pay at least some toward the principal, then you don't make any progress toward getting the loan paid off, which is a bad idea for you. (This is what those interest-only loans with balloon payments were doing: people were just paying interest to the bank and not actually lowering the amount they owed on the house, then the entire loan balance would come due at the end of the mortgage term, which of course many of them didn't have lying around or they would have bought the house outright in the first place.)

I can babble about compound interest and How Mortgages Work for a really long time (math teacher), but that's not what you asked for, so I'll refrain unless you have questions.

Re: Disclaimer: I am neither a lawyer nor a banker

Thanks for the suggestions. I have both taken a screen shot and made a printout from their website so I have some documentation.

I think you have a good idea about offering the original payment amount henceforth. I probably won't call them back until Monday so that I'm sure to be in business hours and not being handled in India (Friday afternoons being notorious for not getting real help).

I, too, teach math, so I have a fine understanding of compound interest :(

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