im 4 months behind my mortgage on my primary since I was denied a loan mod

**karlsd** · 06-23-2011, 10:14 AM

they denied me because

A. i make too much money
B. I am current on my loan

well B is not an issue anymore as I am 4 months behind.

I short sold an investment property 18 months ago and the 2nd bank did not forgive the debt which forced my hand into Chapter 7 Bankruptcy. I have been approved for chapter 7 but the official discharge did not go through yet. My Primary lender has put my account on hold since I filed for Chapter 7 and have not received anything from them since I stopped making payments. I called them today for an update. They said no action is being taken since I filed for chapter 7 but once the discharge goes through they will take action. I can either get my loan up to date, short sale, in deed of lieu, or straight foreclose. I asked them if they would reconsider the loan mod. they said if my income did not change then NO.

My credit is already shot so I am going to push this as long as I can. I find it hard to believe that they will not cut my interest by a point or two instead of foreclosing (may take 2 years to get me out...which can equate to over 50K) and getting another house they don't want.

If they drop my rate (currently 5.05) by 2 points I would pay back all that I owe and it would be business as usual for the bank. yes it would about 200-300 less per month in interest from me....but that's better then losing 50K and the money it will take to foreclose and the time it will take to get a new buyer in there.

so my question is...are they just talking tough right now or will they break a few months down the road when i stand my ground...at some point will they negotiate with me?

I realize every bank is different, but I know of 3 different people that were in the same boat and they attempted a loan mod and were turned down....it was only after they were 6 months of more delinquent that the bank took them serious and eventually renegotiated the terms of their loans.

I figure worse case scenario, i push it and give them a chance....if they don't bite and things get ugly Ill short sell it...which means I wont have to pay them a dime of what i owe (this was the case with my fla short sale). Walk away with a fresh start and go rent somewhere (thinking of moving to NC...rent is like $1000 for a small 3 bedroom house). and potentially have up to 50K in my pocket.

your thoughts?.....lets keep it civil please. this is just business. I bought a place in FLA for 215..short sold it for 89....i paid 405 for this place in NY....i recently had it appraised for 335.....im a 40 year old man trying to start a family and if they buried me today my wife will get nothing but debt. I had good intentions with my RE investments.....i was told by all growing up that RE was the way to go...buy a house...dont rent....well just my luck that i was part of the biggest RE bust in history...well im tired of it. I either want my loan interest dropped to make my life easier or i want out......i make a good salary in NY but at the end of the month i have nothing and -50K in debt on my primary...NOT the American dream...

As I stated I am willing to work with them and stay in the house, make my loan current and continue to bay my mortgage BUT at a lower interest rate.

**karlsd** · 06-24-2011, 07:13 PM

anyone?....................

**Greg** · 06-27-2011, 05:10 AM

If they lower your interest rate then they will have to lower mine and everybody else's. Fair is fair.

**karlsd** · 06-27-2011, 05:31 AM

ok got it....so i stay in a house worth 65K less then what i paid for it and just deal with it?

options guys.....real viable options guys.....lets hear them.....i dont want opinions...i want options.....smart business options...lets hear them!

**Greg** · 06-28-2011, 06:11 AM

With the hole you have dug there are no business options available. Your biggest problem is your future liability for you current and past debts.

Your place in Florida was not your home so the lender there can come after you for the balance of the loan plus costs.

The lender in NY might also be able to come after you for their loss.

Only time will tell if the bankruptcy will protect you.

**karlsd** · 06-28-2011, 12:08 PM

Originally Posted by Greg

With the hole you have dug there are no business options available. Y.

you know whats scary? That people such as yourself make statements with such definitive authority. Honestly your clueless. And you should think twice before replying to a post with such a definitive tone, as some people may give up and live in their money pits for the remainder of their lives.

I was on the phone for an hour with my ex boss turned realtor who specializes in short sales in NY. A short sale is a VERY viable option for me. The bankruptcy will buy me some time to get my ducks in a row and I conceivably stay in this house for well over a year without making a payment. All outstanding debt will be eaten as part of the short sale. I will qualify and the bank will accept based on preliminary #s. I was denied a loan mod based on very basic criteria that was asked for and i did not challenge the outcome. I will be prepared and short sell when the time is right. They key is having good people to represent you who know how to work the system, as I had for my Fla short sale, which worked seamlessly. With a properly worded hardship letter and VERY detailed financial worksheets i will get qualified for a short sale (neither was required for the loan mod).

There is no way in the world they will attempt to foreclose when im 10 months behind and have a viable fair market buyer for the bank. They will accept a short sale.

So this is a VERY viable business option available to me. If all goes well I can walk away with anywhere from 20-30K in my pocket from the payments NOT made on the property. All fees will be rolled into the short sale and pay nothing. I walk away with another credit hit....which is insignificant to me at this point.

I would also like to note that when it came to my property in florida I got tons of misinformation and poor advice. People just don't know the rules of the game, as they change all the time....every bank handles situations diffferently..each state is different. I was actually told by many, including licensed accounts that i would have to eat the 1099 i was hit with for the deficiency balance on my short sale (nearly 30K). they were WRONG. it was a simple tax right off.

A word of advice to all on these boards..........there are people depending on you. give advice based on fact. from real experience...ie..i was in situation X and i did Y and Z happened. keep it simple. It amazes me how people get p*ssed off when you don't pay your mortgage, or file for bankruptcy or try to get out of their loans. Its just business.

So we buy a bad stock, do we have to get stuck with it for the remainder of our lives. No we cut our losses and move on. that's smart business. and don't worry about these banks...they will be around for a long time and they don't give a crap about any of us.

**Greg** · 06-29-2011, 07:40 AM

When you did your short sale did the bank sign a note saying they will NOT come after you in the future for the money they lost?

If not they will find you later on when you get back on your feet and want their money.

Make sure when you short sale your NY property you get the bank to sign one of these or they will come after you also. These are not standard documents in the short sale package and are overlooked by most short sale agents.

The 1099 on your short sale in FL will resurface when the IRS gets around to it. Usually they wait a couple of years so the interest and penalties have time to grow. The only people who don't have to pay on the 1099 are owners who reside in the property which you were not.

Those of us who are concerned about those of you not paying your mortgage couldn't give a crap about the banks getting screwed. It is your neighbors you are screwing when you drive down the neighborhood prices.

By the way, I am under water on my house but I don't look at my house like it is a piece of paper with some stock info printed on it. It is my home and I have enough pride to suck it up and keep on making the payments. Just like the majority of Americans.

**karlsd** · 06-29-2011, 08:27 AM

Originally Posted by Greg

When you did your short sale did the bank sign a note saying they will NOT come after you in the future for the money they lost?

absolutely, I wouldn't have done it if this weren't the case.

Originally Posted by Greg

The 1099 on your short sale in FL will resurface when the IRS gets around to it.

the 1099 was addressed and will not resurface. I had a clear cut capital LOSS (215-89K) which offset the Capital GAIN. the 1099 is done and will not resurface.

Originally Posted by Greg

It is your neighbors you are screwing when you drive down the neighborhood prices.

will my neighbors take care of my wife and children if I were to die suddenly with a house 65K under water? If they will I will make my payments and not do a short sale.

Originally Posted by Greg

By the way, I am under water on my house but I don't look at my house like it is a piece of paper with some stock info printed on it. It is my home and I have enough pride to suck it up and keep on making the payments. Just like the majority of Americans.

and that my friend will be your down fall. Because at the end of the day its sheet rock, wood, concrete with a piece of paper binding you to the debt that you may never get out of.

once again...i don't want opinions and to hear whats in your heart. I don't want to hear about pride or doing whats considered admirable. This is business.

An lets be clear on something. I have no intentions on walking away from this property. I personally believe that those who walk away, are irresponsible and essentially destroy any future in owning their own home again. Getting foreclosed on is not a wise move for anyone involved. A short sale is best approach that benefits all. I get out of the smothering money pit, the new owner gets the property at fair market value and the bank gets a new owner to pay the mortgage on the property. It will not decrease the value of the neighborhood. The bank will not accept the offer if less then fair market value.

as far as me not making a payment, it is part of the game. Most banks will actually tell you that you MUST be delinquent to be considered for anything including loan mods and short sales. It was one of the reasons they gave me when they denied my loan mod. They actually said I was denied because I was current.

**tttyyy22** · 06-30-2011, 11:25 PM

I hope you succeed. . Oil.

**Greg** · 07-01-2011, 05:16 AM

Originally Posted by karlsd

and that my friend will be your down fall. Because at the end of the day its sheet rock, wood, concrete with a piece of paper binding you to the debt that you may never get out of.

I doubt it. I just bought my 3rd house and this time I did it with 100% financing. It is a foreclosure where the owners figured it was a smart move to ruin their credit and walk away.

Once I am finished remodeling it I will flip it. So, in a way, people like you are helping me out. Yea for the losers.