i'm 26 years old, i live in ocala, fl, i have my home loan with bb&t, the home is 2 years old, and i owe 160k on the loan. i had the house built when the market was at it's peak, and since i've moved in, the homes in my neighborhood have only gone down. realistically, the house is probably only worth about 120k judging but what the other homes are going for. i have a 6.65% fixed rate 30yr loan, payments are $1432 including pmi, tax, and insurance.

i recently opened a business (used car dealer) and sales have been slow. i have never missed a payment on my house or any other bill i have had, EVER. not one. i have excellent credit, it was a 760 mid score before i bought the house 2 years ago. however, i am using all my cash to pay my mortgage, and my credit cards are paying my gas, food, some utility bills, and all the day to day expenses one would have. i am running out of available credit and won't be able to stay on top of my bills for long.

i have been working with NACA (a non profit home loan modification company) since february, and they have sent a loan modification proposal to my lender in march. the modification calls for a reduction in interest rate to 3.x% and get rid of the pmi, which would lower my monthly payment to around $850, much more manageable for me. however, bb&t claims they have not received it. i called NACA and had them resend it and will be following up this week with bb&t to see if they have received it, but from what NACA has told me, lenders routinely claim they have not received anything in order to avoid proceeding with the modification process.

i've really been thinking about my situation over the last few days. basically, even if i do stay in this house and can actually make all the payments, it would likely take many years for the market to recover enough for me to even break even on this house. so why stay in this house, in a town i don't want to live in, for 5 years, 7 years, or more just to break even on the house? i am thinking about calling bb&t and basically telling them that i will stop paying on the house and just walk away, or they can approve the loan mod and give me some incentive to continue paying this mortgage. they have to know that they won't be able to sell the house for anywhere near what the loan balance is, so instead of selling the house and taking a loss, why not approve the modification and make less profit(but still a profit) on the house due to the lower interest rate?

so really, i have 2 questions:

how likely would it be that the lender says yes to the loan mod if i give them an ultimatum like this?

and how bad of a hit will i take on my credit? keep in mind that ALL of my other credit reporting bills (4 credit cards, personal loan) have been and will continue to be paid on time.

well, i am open to suggestions, but i definitely don't want a judgment against me. what are my options here?

You may have better luck hiring an bankruptcy attorney. The attorney can delay a foreclosure, perhaps giving your lender enough time to process your loan modification request. I have received a loan mod from my lender (i am not going to accept it, but I did get a mod offer). I think when you have an attorney they tend to work a little faster.

i don't want to file bankruptcy. with a lower mortgage payment, i'll be fine.

ideally though, i'd like to just be able to get rid of the house and move in with a friend for a while, in order to keep my bills to an absolute minimum and pay off my other debts, and go from there. that's why i either want to do the loan mod, or find a way out of this house, without screwing myself over too badly.

I was only suggesting bankruptcy because you said you mentioned walking away from the house. Keep in mind that Florida is a deficiency state so they can sue you to recover losses.

no problem. any ideas on what i can do, other than a bankruptcy?

You can try writing to an executive sending it FedEx but that will not guarantee you anything. Someone that oversees mortgages. Call and find out what V.P.

just write to them and go over my situation and ask him/her to approve my loan mod?

what about a short sale? how likely is that?

Call them up again and have them create their own mod for you. At least, if you miss a few payments, they can postpone the sale. If you check through the old posts, most of the lenders postpone the foreclosure sale until the mod completes or fails. While you are waiting on them to create your plan, you can have NACA resend their own plan.

last time i spoke with them, they tried pawning me off on the obama plan, but said it could take 6 weeks for them to send me the paperwork. and from what i read, that's only a temporary mod... after a certain amount of time, your payments go back to where they were... is this correct? anyways, the NACA plan was permanent, the rate is locked in for the full remainder of the loan. would the lender do something like this?

The loan mod under MHA is actually permanant. Your payments will be at a set much lower interest rate for the 1st five years. They will set an interest rate cap in your loan documents (which should be around the current market rate at the time of the modification) say, 6% or so. If your modified interest rate is less than the 6%, after five years your interest rate will go up 1% each year until it reaches said interest rate cap.

I wouldn't trust the person that told you it was temporary. You can get all the information you need from the FAQ. It will clarify many of the details.

http://www.financialstability.gov/docs/borrower_qa.pdf

With the millions of people trying to get loan mods right now it will take a few weeks. If you qualify for the Obama plan I would go with that.

thanks for the info. i might be closing my business, and am not sure what i'll be doing after wards. if that's the case, and it's time to do the paperwork for the obama plan, will i be able to qualify for the modification without a current job? because it might take me a while to find one that is worth taking, one that can actually pay my bills. my area is extremely low paying.

They will reject you for not meeting income requirements, if there is no job or business income. Even if you do obtain the Obama Mod, there is a 3 month trial period. Payments must be made on time for 3 months for the modification to become permanent.

Four months if you are FNMA current.

A few weeks I think is optimistic. I know a work week that is about sixty is not unusual, and you still can't catch-up. It is like ground-zero.............people with legitimate requests and hordes more calling/submitting requests that are in no way going to qualify but keep calling jamming the system. It is insane.

Yeah, w/ a pending mod. review a f/c can be postponed until a decision is made.

providing i keep my business open and am paying myself enough income to qualify, will they go through my business bank statements and such, or is a copy of my salary checks good enough? i don't have a "pay stub" per se, since it's just a check from the company to myself with no taxes taken out. just wondering if that's acceptable.

This is what it said to submit if you are self-employed on the paperwork I received from BofA:

You don't need to file for bankruptcy or walk away from your house! You need to find a company/attorney that knows how to negotiate with lenders. I'm sure you've heard the horror stories of how people are getting ripped off by these types of companies, but like any industry there are shady characters that are involved. You need to find a company that will do it for a reasonable price and don't charge any fees until they know that they can get your loan modified.

that's what i was trying to do... i was working with NACA for the past 6 months but they are a joke. i was working with a company who charged a fee, but backed out because i didn't feel comfortable. they wanted like $1500 upfront and another $1500 later. i might consider paying someone, but damn, who can you trust? any reputable companies or attorneys out there that can get the job done?

I wanted to add my nickel on this topic about NACA. They lost LOST LOST my paperwork, had it in the wrong section for over 5 months concerning my foreclosure. They lost our paperwork 3 times and said that it was our servicer who was not responding. They told me not to talk to my servicer and that we should only go through them.

Jump forward to mid August after recieving my mod paperwork from my loan servicer and trying to get NACA to look it over. 1 week of being hung up on by NACA, our servicer snuck in or maybe I wasn't paying close enough attention to the fact that our house was on the selling block. We had a contract with our servicer and a mod agreement that gave us until September and they reassured us our home would not be foreclosed on.

What did NACA do for us? Use all of our time and energy and forgot to call us back when our house was being sold at the county steps.

We declared BK to save our home at the last second. No return calls from naca. Yep, all they did was take up my time. Stilll made me turn in my own paperwork, could have done that on my own.

Lots of stress. Do what you need to on your own, it is your house. See how nice they are to you when you write them about a sale date.

No one qualifies...that's the point. They are "trials"...that's it!

forensic loan audit..google it.

if you purchased on subprime, most likely you did with that PMI, then you most likely will have some violations from the original lender. once those violations are revealed and brought to the current lender's attention, THEY HAVE TO PLAY BALL.

I have been educated on this a bit and almost ready to pull the trigger to obtain the services.