NBR: Loan modification question

babygroves

Has anyone gone through with a loan modification? What are the pros and cons? Was/Is it worth going through? We are trying to find ways to save a little money, but don't want to do it if it is more of a con than pro.

TIA

femmeftle9

I'm assuming you're talking about your house. We just went through a loan mod on our main mortgage. If it weren't for the loan mod, we would have had to move back into our condo, so for us it was well-worth going through.

However, from what I understand, you can't just want a loan mod. You have to file hardship papers to show that you are facing a current hardship. Chances are, the bank is not going to consider a loan mod unless you have already stopped paying on your mortgage, which sucks because that screws your credit.

We were in a 5 year ARM & still had a couple of years before it reset, but we were going to be screwed on refiancing because the house had dropped so much in value, there was NO WAY we were going to have equity before it reset. We have a much better loan now, where we pay principal and interest... and they gave us a good 15 years before we'll need to refi (it's a balloon).

It also depends on the bank you are dealing with. Our main mortgage is with Indymac, and they were EXTREMELY willing to do a loan mod. Our second mortgage is with Citibank & they refused to do a loan mod, because they claimed our income was too high.

babygroves

femmeftle9:

I'm assuming you're talking about your house. We just went through a loan mod on our main mortgage. If it weren't for the loan mod, we would have had to move back into our condo, so for us it was well-worth going through.

We were in a 5 year ARM & still had a couple of years before it reset, but we were going to be screwed on refiancing because the house had dropped so much in value, there was NO WAY we were going to have equity before it reset.

Yes, I am talking about our house. We have been paying our mortgage. However, in October it will become an AR and right now it is fixed. Also, I am now working part time and when we bought our house I was working full time, so we have a decrease in the amount of take home money. We are in the same boat as you, if we don't do something about it now, I'm afraid we would not be able to make our payment and then lose our home. How much has it saved you.

Currently we are paying $2400 a month on our mortgage and we would like to see it under $2000.

 Also...where did you get your DC onesie in the siggy???? So cute!

femmeftle9

We went from $2700 on our first mortgage to a little over $1800. Over the course of several years, it will gradually go back up to $2700. So it's saved us about a thousand.

Get all of your financial statements, assets, etc together because the bank will want to know EVERYTHING.

I must warn you, they probably will not work with you until you are no longer "current" on your account.

Thank you - I bought DD's onesie at BRU.