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Should I allow my pmts to fall behind in order to be considered for a loan mod?

My 1st is an conventional ARM interest only with a balloon due in 2 years.  My 2nd is a conventional.  I originally planned to use equity to refinance after 3-4 years, but that plan is nil.  I've even considered using my 1st payment to pay down my 2nd and create more equity, but I am worried about the implications this will have on my credit.  I am not sure how to resolve this without foreclosing.  v/r Cliff
  • January 06 2010 - Arlington
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Answers (10)

Keep in mind that you do not have to be late to be considered for a loan modification. 
  • January 07 2010
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I am not going to rant and rave about the really bad advice one of the posters has given you, but in VA, any loan mod people must have a Mortgage Brokers License to handle your loan Mod. Visit :

Virginia State Corporation commission, Bureau of Financial Regulation

These good folks are friendly, and are there to help Virginia residents!

Good luck Cliff, Jim

  • January 07 2010
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Thats on the 2nd, most likely they own the 1st as well... they must of looked at it as getting something is better than nothing.
  • January 06 2010
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No joke....It is riduculous but It is fixed at .02% for 10 years..If I had not read the note mod agreement I would nor believe it...
  • January 06 2010
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Andrew, .02%....?  Get real brotha!  Next time you spit out rediculous rates like that, why dont you include all the terms...
  • January 06 2010
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Jeff,

You don't even know if the OP is struggling to make the payment and you are recomending they skip payments...Frightening!

I am good friends with a loan officer that has been actively helping folks negotiate loan mods- he is 14 for 14.  Got a 2nd mortgage modified to a .02% rate fixed...not bad.  He is working on one now that the 2nd mortgage company has agreed to a short payoff...as a result he will be able to refi into an FHA loan...If they had taken the advice to miss a payment...that option would be off the table!  Skipping payments when you have the ability to pay is not a geat idea. 

Just my .02
  • January 06 2010
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It is obvious your over your head, and overpaid.  Do yourself a favor and find yourself nice rental for half the price if possible... your house is the collateral for your loan, if you dont pay, they take your house... thats it... unless of course you refied before and took money out.

  • January 06 2010
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"Should I allow my payments to fall behind in order to be considered for a loan mod?"

The current administration distributed $750 Billion Dollars a few months ago to Help Homeowners who will lose their homes without help.
 
  Loan Modifications are handled differently than a new loan. Forget talking to a loan officer, you don't need a new loan, you NEED your existing loan modified so they are OUT of the equation right now.
For a Loan Modification: 
  Credit IS NOT A Factor.
  You do need a HARDSHIP,
  You DO need some form of income in the household.
  You do need solid professional help to get a substantial modification, by this I mean more than $100-$150 a month off your monthly payment, which is typical of what you will get doing this on your own, depending on the lender, and will be in the same boat in a month.
  Again, the administration distributed $750 Billion Dollars to HELP Homeowners who will lose their house without help. 
    It does NOT Hurt your credit as much as you may think to be late or miss a payment on an installment loan when you are at a point in time with your finances like you are right now. (I guess at this just based on the info you have given)  If you have a strong, legitimate hardship right now, I would not make this months payment (January) yet, and if you did I would Stop payment right now.
   Use some of that money to pay for a steak dinner with the wife and kids and relax for the evening. I am not kidding, there ARE more important things in life than money and with the right knowledge and support, anything can be overcome with a positive attitude and faith, sometimes blind faith..
   EVERY Modification is done differently based on the situation.
BOTTOM Line is that you really need to at least speak with a professional right now. It's never too early to start especially if you forsee a hardship in the near future.

  Also, remember that you will be negotiating with a multi-billion dollar entities loss mitigation attorneys, not the branch manager that truelly loves you and Mostly, your business; all the more reason for YOU to have the right people in "Your Corner of the ring" for guidance.     Based on what you have said so far, 
you will need professional help with this and a great start is with an A Rated modification analyst. All due respect to other contributors and I hope I have not offended anyone and if so, my apologies but I am sick and tired of people being misled and misguided on one of the MOST Important decisions and hurdles in their life. EVERY situation is different.I would love to get all the details of your situation and guide you to success.

  • January 06 2010
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You should never fall behind in order to obtain assistance. Anyone who tells you to is wrong.  The qualifying factors have more to do with the relationship between income and mortgage payments and hardship(s).  You need a good loan officer who can discuss your options.....Good luck.
  • January 06 2010
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Cliffscott, Sorry to see you are having issues. Although many lenders require you to be behind in your payments before they will work with folks in the past, this may not be the case much longer.  I, in good conscience, would NEVER suggest you artificially create late payments artificially to qualify for your loan mod. Keep in touch with the lender, perhaps they will see the light. I hope you get your loan "fixed".  Jim 
  • January 06 2010
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