14 replies to this topic

[hilo]

Hello, 

 

I recently called Ditech to ask what mortgage refinancing options there were. I asked about the Disaster relief assistance because I am in an affected area.

I then received a letter that stated I was being assigned a representative. 

 

What does this mean?
I'm currently seeking employment. I can make my payments now with the help of roomates. The taxes recently went up and I want a more affordable payment. They sent me a package to see if I qualify. 

What I am afraid of is any information I give them may be used against me seeing that simply asking about disaster relief made them assign me a rep. 

 

Any thoughts or legalities I should know?

I'm in Texas. 

 

payments never late. 

[Kuuner]

How could/would it negatively impact you or be used against you? Are you currently making your payments? That would be the only thing I can see used against you, your credit impact on non payment. If you are making your payments BUT are asking if any assistance may be available to you, that's normal and their response is normal. Disaster relief assistance comes in many forms and lower payments and/or a forbearance may be an option.

 

USUALLY, not always but usually, if you start making payments less than contractual amount due, you could subject yourself to credit harm. Even if you get into a loan modification, until it's permanent (unless), if its less than contractual, it could impact your credit. Disaster relief is pretty normal for the GSE type loans (Fannie/Freddie/VA/USDA/FHA, etc.). They look at your zipcode/county. They look to see if you are impacted financially due to the disaster (employment not available or reduced due to disaster). They look to see if the property is impacted (Damaged/destroyed). They look to see if you have adequate insurance for the damaged/destroyed property.

 

Ditech used to be GMAC. They got into a LOT of trouble back before/during/after the crash of 08'. They are highly regulated and monitored and subject to administration by the CFPB for their practices/procedures so, let's just say in the one in a million chance someone's out to get you, the CFPB will come down on them hard.

[hilo]

Kuuner thanks for your reply and sorry for the delay. 

 

I want to look into an in house modification due to loss of employment. (however, not lost due to a disaster)  I wanted to get any advice on this as I am current and don't plan to default even if 'they' advise to. My income is painfully low and I've been out of work for a year. Previous years tax returns were low as well due to business I owned on the decline. Hence the unemployment. The payment went up due to taxes and it has become unmanageable. 

 

I rent out rooms to afford it now. I'm wondering if renting will affect qualifying for a modification? The house is my homestead in Texas. I report the rental income. 

 

The first thing I did was ask to stretch out to 3 years, the payment included for taxes that the escrow couldn't cover. 

 

My payment last year was $2100, it jumped to $2400 because of taxes.
My goal is to keep the home, (not interested in selling) , I don't care how long the loan is, 40, 50 years is fine with me if they will do it. 

Any advice or idea how low these modifications can get the payments?

[DollarDog]

Your property taxes INCREASED by $3,600 in one year?  Wow.  That's scary. 

[tiggerlgh]

Was this a new build home? Or what happened for taxes to go up that much?
Mod terms vary based on Bank as they are now all in-house. But most still follow HAMP roughly. So if approved can go down to ~31%.

Rents do count as income. Taxes will always change and that is outside of the banks control. I would make sure you are prepared in the future if they change as you won’t be able to mod again.

What is your DTI (mortgage payment/total income)?

[hilo]

I live in the center of Austin Texas is what happened. I've already done the HAMP 2 years ago. Can I do it again? 

 

I have a disability but am preparing for the future by gaining technical skills. 

 

I'm currently unemployed, do I just calculate my DTI regardless?

Edited by hilo, 04 March 2018 - 12:44 PM.

[tiggerlgh]

Having a modification two years ago will hurt your chances but they may still have some workout options. Good Luck

[Kuuner]

Mods are not all "in house". There are still GSE mods available even if they are not a "HAMP" mod. That said, if you already have one, chances are reduced greatly at getting another one. You can get to a point where the lender/servicer considers any modification, "Excessive Forbearance" basically meaning, short of paying you to stay there, anything they do for you is just going to prolong the inevitable, default.

 

Can't hurt to ask for another one as your financial situation has changed. All they can do is say no.

[hilo]

How would a car loan affect the qualification of a mod? Do I wait until after it's modified? before. 

 

I need a car in Texas in order to get a job in order to pay the bills. Mine just died. 

[Kuuner]

How would a car loan affect the qualification of a mod? Do I wait until after it's modified? before. 

 

I need a car in Texas in order to get a job in order to pay the bills. Mine just died. 

So you don't have a job but you can get a car loan? If you get a loan (somehow) and then apply for another mod, the payment will be based on your front end debt ratio but...your back end ratios will take the car into consideration and could throw you out of any mod. That's assuming they'll consider you anyway.

[hilo]

 

 

So you don't have a job but you can get a car loan? If you get a loan (somehow) and then apply for another mod, the payment will be based on your front end debt ratio but...your back end ratios will take the car into consideration and could throw you out of any mod. That's assuming they'll consider you anyway.

 

 I can get a car loan. I have reasonable credit. 

 

Can you explain what frontend and backend ratios are?

[tiggerlgh]

Front end DTI is your mortgage PITI/gross income

Back end DTI is all debt payments (including mortgage)/gross income.

Assuming the mod isn’t approved can you afford the mortgage and auto payment?

[hilo]

Front end DTI is your mortgage PITI/gross income

Back end DTI is all debt payments (including mortgage)/gross income.

Assuming the mod isn’t approved can you afford the mortgage and auto payment?

I've never been late on my mortgage. I make it work with renters to cover 90% of the payment, but I definitely struggle and will continue to until I have gainful employment. My point being, the dti with the rental income is not enough for the underwriters to be happy with. 

I have to keep the house , it's my only retirement and gains $50k+ value each year. However being in Texas, the taxes go up every year about 1k. Why? Because I'm a mile from downtown in the hottest city in America.

Health is another but not the last metric for keeping the house. I won't go into that but know there are other factors. 

[Kuuner]

 

 

 

So you don't have a job but you can get a car loan? If you get a loan (somehow) and then apply for another mod, the payment will be based on your front end debt ratio but...your back end ratios will take the car into consideration and could throw you out of any mod. That's assuming they'll consider you anyway.

 

 I can get a car loan. I have reasonable credit. 

 

Can you explain what frontend and backend ratios are?

 

 Maybe you have undeclared income and maybe your credit is good enough to get a non income verification loan and maybe I'm just missing it but it sounds like you are having cashflow problems. Getting a new car, with a new car loan sounds like that's only going to exacerbate the problem. I get that you need transportation and I get that your car took a dump but, is this the best solution? To go further into debt? Sounds like the margins are thin and my concern is adding more debt to the situation puts you in the position that one false move, one tenant not paying their rent on time, defaults you on potentially not one, but two large loans.

 

As a person that manages a bank's portfolio, I see it all too often. No one wants to take the bus. No one wants to fix what they have or buy a beater. They buy a new car. Something happens. They default. They get the car repo'd. They get behind on their mortgage. They default. They try to refinance out of the default on their mortgage but the default on their car loan stops that from happening. They get desperate. They have equity but now can't get to it without selling. They try to go hard money but they find out hard money lenders won't (Can't) lend on owner occupied property, especially in Texas! They file BK last minute to save the house but then, they go back to beginning and realize, they don't have any income to fund the chapter 13 so they convert to a chapter 7 only to realize four months later, they get their discharge and a couple days after, get another sale notice from the lender. Unless thousands just fell into their hands, the usual outcome is it goes to foreclosure sale.

 

Not saying that's gonna happen, just saying that I've seen many many similar situations with that outcome. When they call me for help (Like a loan mod), I have to tell them unfortunately that I'm out of options.

 

Hopefully the job situation will change for the better and hopefully everything will work out. I'm rooting for you.

[hilo]

I agree and you have valid points that I have also considered. However I am in a rock and a hard place. I have a disability - one metric of needing a car. 

 

The car loan is not a 'new car' but used in the cheapest car class. ( I realize you may have meant new as in 'new to me')

With half down, I'm looking at a payment of $80-$100 a month. That may change when the hard pull is done...

Putting half down is a gamble because of what you said about the unknown happening that the amount could be needed for.

How did I get it? Once a year there is a festival in which I can rent the house for $1k a night.  the car died during that week. 

I have some small income a month on top of the renters from a contract job. 

  

I weighed the cost of other transportation (uber, car2go, bus, train) given my conditions and that would be close to $300-$400 a month. 

 

The job situation should be promising, there's not enough code writers for the market but the first junior job is the hardest to get. With a job I intend to put half my income into the debt and I'm not opposed to driving beaters as my last car was 20 years old. the transmission and oil problem costs more than the worth of the car. I found out about these problems 2 years ago when my situation started and did not rush to buy a car with the intention of riding it out until the last leg. That leg has finally broken and I got two years out of the car without spending a dime.  

 

Thanks for rooting for me!

I'm rooting for societies who's values don't leave people in a lifetime of debt for education and healthcare. They exist , but unfortunately I'm stuck in this american one.