In the notice above, it says that if there was a foreclosure action pending that it could re-start right where it left off and that’s what I’d say happened. I could be wrong, but since you had less than 30 days from the notice to the foreclosure sale, that’s probably it.

If you’d like to pursue legal options, I’d recommend checking out the National Association of Consumer Advocates. They have a nationwide network of attorneys that can help you with little or no cost in many cases. You can search for an attorney here.

Thank you,
Jane

We applied for loan modification again(HSBC denied us the 1st time).
This time HSBC sent a letter to denied us again and I call HSBC to find out the why. They said the information is not correct and that they are sending out a forbearance agreement to us. The Agreement is for 3 month
and after that HSBC gonna review our situation again to see what kind of package they can offer us. Is the forbearance agreement the trial before the loan modification? Please advice. Thanks!

Diana

I think it’s definitely possible for your home price to recover in the next 20 years or so. But my question would be do you really want this stress in your life? If your income is fixed at $2,200, your mortgage is probably taking up almost all of that, isn’t it?

When my wife and I had to decide whether to drain our savings to try to keep a rental house (see My Short Sale for more info), we decided not to. The money would’ve run out before the short sale completed anyway we figured. We decided it was better for our family stress level to stop paying the mortgage payments, work the short sale, and let the home foreclose if the bank pursued it. Either way, our credit was going to be toast, but at least this way we still had some money in the bank. We eventually sold the home for about $55,000 less than we owed and the bank wrote off the loss.

In your case, I’d recommend trying to sell like we did. It might gain you significantly more time in the home and you’ll no worse off if they do eventually foreclose. In the mean time, save every penny you can toward moving costs and securing a rental place.

If you’re not comfortable with the law suit idea, maybe you could get a second opinion?

In the end, though, you should do whatever gives you and your family peace of mind. It’s hard to choose not to pay a bill when you’ve had that habit all your life. But if that’s what it takes to allow you to move on with your life, then do it.

Best of luck,
Todd

It sounds like they want to work with you and aren’t looking to foreclose. And if your business downturn is short-term in nature, I think you has a fair shot at getting a more affordable mod payment. If they determine your income is not dependable enough, you probably don’t have a very good shot.

I’m sorry I can’t give any firmer answers than this, but it’s completely up to Chase at this point and trying to second guess them is like trying to second guess the weather unfortunately.

You don’t have to be a co-borrower on the new loan, but they will want your income and expenses included.

If you want a third opinion, I’d recommend calling a HUD Housing Counselor.

Here’s my reasoning…usually if you apply for credit and are denied, that can be discovered because you have a credit inquiry from a company that you don’t have a credit account with.

But…you already have an account with your mortgage lender and it’s not uncommon for lenders to periodically run credit anyway. So, applying for a mod would just look like a normal inquiry as far as I know.

But I’d really recommend not applying unless you truly need a modification. And if you truly need a modification then what happens to your credit should be a secondary concern to keeping your home.

If you’re applying simply as an attempt to lower your payments, I’d recommend against it. First, it probably won’t work. Second, it’s a TON of time and trouble for something that probably won’t work out. And, probably most importantly in the big picture…you’ll be taking time away from someone that actually needs the modification.

I’m not sure which B of A program you’re talking about so if you have more info, please reply and I’ll do some investigation.

Thanks for your time. I’ve been looking for clarification on this for some time, but still can’t seem to find a straight answer. Here’s my situation as simply as I can put it: My wife is the sole borrower on our note. She bought the home in 2007 (we were dating) and I am on the title (signed one document at closing), but not the note. We married in 2009. We finally received the Request for Modification and Affidavit form after nearly 9 months of trying. We quit making payments to try and force the banks hand a little bit. Do I have to be listed on this form as co-borrower or have my income or debts listed? We qualify based on my wife’s income and debt. The mortgage payment is around 54% of her gross monthly income. If we add my income, the ratio goes down to 31%. I don’t want it to seem like we are hiding anything but the truth of the matter is she is the only borrower on the note.

In the end, though, you either need the mod or you don’t. You can either afford to make the payments or you can’t. If you need the mod, can afford the payments and want to stay in the home, what other choice do you have except to accept the terms?

Since you’re just entering the trial period, the bank has not actually modified your loan yet. And assuming you successfully complete the trial, the payments you get may not be the same as your trial payments. It’s all extremely confusing and more complicated than it should be.

As you’re nearing the end of the trial period, I’d continue to hound your loss mitigator about getting the details of the loan so you know what they’re offering you. They ’should’ provide it, but…

Hope this helped and best of luck.

I’m going to caveat this answer with the fact that what I give is only an opinion…what you’re bank says is what will happen. Hopefully the two will match but they may not.

First of all, they won’t put you into a trial unless they’ve approved you for a mod. They run all of your numbers and consider your application and then if they approve the mod, you begin paying the new, modified payment. The ‘trial’ is just the first few payments of your new loan.

If you make all your payments, the trial converts automatically into a permanent mod…you don’t have to re-qualify at that point.

Did they offer you a reduced payment while they’re considering your modification package? If so, that could be what’s causing your confusion.

The best way to find out is to call and ask them…if you can actually get someone on the phone. Hope this helped.

In addition, even though you don’t feel your situation has changed, it has…as you say, you have no savings now and you did when you sent the package in last time.

If you’re in danger of imminent default (which you are according to what you posted here), they SHOULD process your modification package and approve it even though you haven’t missed any payments. What they will actually DO, though, varies by bank and individual situation.

Finally, let me put your mind at ease a little (hopefully). If you stop paying, they’re not going to come take you home next month. It varies by state and I’d recommend checking out our state laws overview or state law summary for more info, but it will take several months before you even have to think about moving or losing your home.

Let me give you my story…we stopped paying the payment on a rental house we have in Virginia last May. We’ve been in a couple short sale negotiations with the lender and a couple buyers since then. We received a Notice of Default after a couples months, but that’s it. We had a couple months of harassing phone calls, but once we got the collections department and the loss mitigation department to talk with one another, those calls stopped too. No one’s even talked about foreclosure and it’s been 10 months now since we’ve paid a payment.

All that to say I would recommend you stop paying your mortgage and start saving your money again. If you end up saving your house, you could need it as part of the modification plan (shouldn’t under HAMP, but may under different programs) and you WILL need it if you lose your home to foreclosure. You could have 6 or 8 months of house payments saved up that would allow you to move into a nice rental or something. I know it’s not ideal or pleasant, but you need to make sure your family is taken care of.

Hope it helps and thanks for writing.

We applied for loan modification in April 09. We hired a lawyer to help us.Finally, we got and answer today from HSBC saying that we had been denied because my household income can afford to pay the monthly loan.
Actually, the loan plus HOA and Tax is around 64% of our income. We never been late in our loan payment because we were using our life saving and right now our saving drained out. Can they denied our application becuase we were never late? The loan plus tax and HOA is 64% of our income that is why we apply for loan mod. So, what we should do? Our lawyer is telling us to apply again. Is that means that we have to wait for another year to get an answer? We don’t want to lose our home. We don’t have saving since we use it all to help us to wait for the answer. We are so desparate. Please advice. Thank you!

My recommendation is to paint the most accurate picture of your family’s financial situation as you can. Include all your income and both houses. Of course, this could bring about some tough decisions like possibly having to let go of or sell the retirement home so you can stay living in your current home. But the question to ask yourself is whether you want to maybe get by with telling them the absolute minimum amount of info you can and winding up with a plan that truly isn’t workable…or tell them everything and hopefully end up with one that will work long term?

As far as finding out if they’re participating in HAMP or not, you can ask them or you can go to the Treasury Department’s lender page at: http://makinghomeaffordable.gov/contact_servicer.html there’s a lot of other valuable info on this site too…spend some serious time there!

I have since gone back to work for 2 companies part-time. Needless to say our income over the last couple of years due to the economy and building industry has drastically declined. We do qualify for the 31% rule but how do I know if our lender ING Direct is participating in the Presidents plan? I received paperwork from their home retention dept but not sure if they are looking to do a loan modification or ?

My current income is about $2000.00 a month and our mortgage is $2,000.00 and we are not paying credit cards and own our cars.

We are behind in our property taxes. Is this a problem for the Presidents loan modification qualifications?

2 months behind in the mortgage payments.

I plan on filling out the paperwork to start the process but do not want to jeopardize my qualification by putting my husband on the forms (his income is less than mine but he has the other house).

Do you think I have to put him on the paperwork?

They aren’t required to show the details of the final workout at the start of a forbearance because the underlying facts and circumstances could change drastically if the 3 or 6 month forbearance period.
It will probably affect your credit fairly severely because you’re not paying as originally agreed. We have a couple article here on the site about credit impacts. It won’t hurt as bad if you didn’t pay at all or if you eventually foreclose. But, honestly, I’d be more concerned with staying in the home than your credit rating. After all, if you stay and they modify your loan, you’ll have plenty of time to rebuild the credit. And if you have to leave the home, people are very understanding when you explain what happened. You’ll get asked about it every time you apply for credit without doubt, but it’s pretty easy to explain away if you can actually speak to someone that has the power to approve/disapprove you.
If they modify your loan after the forbearance, they’ll just add the part you haven’t paid onto the new loan. If you just go back to paying your old mortgage, they’ll most likely try to work out a repayment plan with you by dividing the amount you owe by 12 or 18 months and adding it to your normal payment. If that won’t work, they may put it in a promissory note with no required payments until you sell the home or refinance.

Hope that helps and best of luck!

Now, if the job loss is temporary, there should be due consideration given. But with foreclosures taking 6 – 12 months or more in most of the country, I’d argue that 6 – 12 months is due consideration.

Thanks for any help