Bad Credit Refi/Debt Consolidation [credit difficulties] [debt consolidation]

admin — Thu, 20 Oct 2011 15:40:00 +0000

Hi, I'm
in quite a difficult financial situation and wonder if anyone has any advice. I want to do two things and wonder what product or products are out there that can help me.
First some background information . I have had several credit difficulties in the past year and my FICO of around 660 to mid 400 crashed. My wife has basically no credit (I bought the house before we were married, and it is only in my name). I have an 80/20 mortgage, in August 2006 with rates of 8.75% was / 11.5% respecitvely opened. I've fallen behind and is currently in a repayment plan with the two first and second lenders. I have 3 payments left on the repayment plan, but they have to commit too much financially.
I was recently put in touch with someone from Arbor Mortgage, and they claim to allow a product to me to roll a car loan, personal loan, and a few credit cards in a refinancing of the house on my monthly payments much lower than the board would . I would like to compare and see if it really like these products available to me, as I obviously have terrible credit at this point, and the LTV on the home is near 100%, but need a chance, whether by a reduction in the total rebuild of my payments. Is there someone who could with any type of loans that may be available or could be me in the right direction as I could about these payments under control and help start rebuilding my credit card point? Thanks in advance for any advice.

Reply:In order to get a loan workout/modification you'll need to be 100% truthful with the lender, if you feel you can't make the payments then you need to tell them that… you don't need to hide your feelings just to allow you to stay in the home until you run into another financial problem down the road, because believe me, if you aren't truthful with the lender about not being able to afford the payments they put you in, you are probably just delaying the inevitable. You need to tell them exactly how much you can afford, and if they can't meet your target payment, then you should do the right thing and let them know you can't afford it. You are going to have to be prepared to put your life on the table for examination, the only qualification is if they can determine you'll be able to meet the mortgage payments. Your lender can do just about anything they want, forgive past due payments, lower your rate, extend the fixed rate period, etc. They are in this to help themselves out, by not foreclosing, spending thousands in legal fees, waiting for the home to sell/eating interest, and paying real estate agent commissions… so if you can help them out by making the mortgage payment, that is what they would agree to, but if you can't, don't tell them you can just to stay in the home.
Refinancing is going to require you have at least 12 months of mtg payments reported on time, and most likely 24 months reported on time. You have a jumbo loan amount, which means your financing options are going to be limited unless you have pretty good payment history. Also, not knowing what your home value is, but looking that you purchased in the end of 06 with 100% financing, and home values here in the southland have been going down since then (especially in the suburbs) because of affordability issues, you might find yourself owing more than what the home is worth, and that doesn't work when you are trying to refinance with a loan amount like you have. Ask your real estate agent to do a "comparitive property analysis" to help determine with what your home value is.
You would have to ask IndyMac about getting your mom's name off the loan, quit claiming her off the property only removes her from title, not relieving her obligation from the mortgage… and you'd have to ask IndyMac permission to remove her from title or they might call your mortgage due if they found out she was removed without their permission (check your mortgage docs for a "due on sale" clause). It's probably not too likely they'd permit her to get off mortgage or title, lenders are only looking to help people out if it benefits them (see end of paragraph 1)… not give someone a break if it means the chances of paying the mortgage would decrease.

Reply:Thanks guy, I'm going to start working on what you mentioned.
When I had finally had the time to contact IndyMac about the default (I work as a registry nurse and was lately working 12hr day shifts; by the time I get home, it's 8PM) I had actually wanted to do what you had mentioned. The lady that I spoke to was actually very nice but when she told me the monthly payments that I would be making, I wasn't sure how to tell her that they would still be too much for me since I didn't really start working full time till the end September. I've only started making payments this month and it's probably only half of what they had wanted from me. Do you happen to have any idea of what the qualifications are on the program to do a modification to the loan? Does the modification allow for them to roll in the past dues into the principal and making adjustments to the loan based on that? I really do want to keep my house. I'm not really interested in selling.
I saw that you work with people in Southern Cali….do your services reach San Diego? Eventually, I do want to refi in order to get my loan on a fixed rate. I believe that the rate for my first is on either a 7 or 10 year fixed. The broker that I worked with made sure that I would have a cushion. In all honesty, I really just want to get my mom's name off the loan. I would even be okay in keeping the payment as it is, although it would be nice to lower it even by $700. I was told that I could have her quit claim. Would the bank allow her to do this without having me requalify by myself on the loan?

Reply:guy since you are over the FHA loan limits the FHA rescue loan (FHASecure) wouldn't be avaiable, you are going to have to bring it current in order to refinance with a new lender, and even then it's doubtful a new lender would want to work with you since the mortgage lates… I think your best bet to is to work with IndyMac on getting a loan workout/modification (much different than the "catchup" plan IndyMac put your in earlier), lenders would much rather work with the homeowner than go through the foreclosure process. A loan workout/modification can actually change the terms of your loan, forgive a portion of the mortgage balance to make payments more affordable, etc. Please consult with a HUD approved counseling agency when trying to do a loan workout/modification.
A source you can visit is http://www.995hope.org/, it's a non-profit company able to set homeowners up with HUD approved counselers and they are dedicated to help homeowners avoid foreclosure. Or you can just visit HUD's list of Approved Housing Counseling Agencies at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

Reply:Hi,
I would also like the same type of information. I wasn't sure on whether I should start a new discussion since I'm also in the same boat. I had to go on disability due to my pregnancy which suffice it to say created this disaster of defaulting on my mortgage. I was hoping to refi in December but after reading some of the other discussions find that there is no way since I would have to bring my mortgage up to current which is almost impossible considering the property tax bill that is due by December 11th.
My current loan is 80/20 through IndyMac. 1st is an interest only at 6.75%. 2nd is fixed at 9.375%. Original loan amount of $589,450 in Dec of 2006. 1 year prepay. Mom is on loan and title, although all payments made solely by me. I used my mom's fico to get better rate, since I didn't have great scores. If mom had not been on the loan, I would have been able to purchase insurance to cover mortgage during disability period. Current total monthly with 1st and 2nd is $3665.
I'm in San Diego, so market has dramatically dropped. I'm almost scared to have the value assessed for my home. When I spoke to the mortgage company the did some 3 month plan to get me back up to current, but it is almost impossible for me to make the total payments.
Any advice would be greatly appreciated. Someone told me of a loan where you could refi 110%. Is it impossible to refi until the payments are current?

Reply: Hello,
I'm in a rather difficult financial situation and was wondering if anyone has any advice. I would like to do two things and was wondering what product or products are out there that may help me.
First some background… I've had several credit difficulties in the past year and my FICO has plummeted from around 660 to mid 400's. My wife, basically, has no credit (I purchased the home before we were married, and it's solely in my name). I have an 80/20 mortgage that was opened in August 2006 with rates of 8.75%/11.5% respecitvely. I had fallen behind and am currently in a repayment plan with both the first and second lenders. I have 3 payments left on the repayment plan, but they have become financially too much to take.
I was recently put in touch with someone from Arbor mortgage and they claim to have a product that would allow me to roll an auto loan, a personal loan, and a few credit cards into a refi of the home to lower my monthly payments significantly across the board. I would like to compare and see if there really are products like this available to me, as I obviously have terrible credit at this point, and the LTV on the home is near 100%, but need a chance to rebuild it by lowering the sum of my payments. Is there anyone out there who could help with any type of loan that may be available or could point me in the right direction of how I could go about getting these payments under control and start rebuilding my credit? Thank you in advance for any and all advice.
I have a couple of critical questions……..The first being is your first mortgage currently an ARM? If it is when did your first late payment occur? If it occured after your loan adjusted you may be elgible for an FHA rescue loan……that may be what they are looking at.

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Bad Credit Refi/Debt Consolidation [credit difficulties] [debt consolidation]