Profile picture for Ian McNulty

Wells Fargo playing games?

I've owned/lived in my condo for almost seven years.  I have an FHA loan.  I refi'd about a year before the height of the market & lost my job about three months after the refi.  That was 2/2009.  I was out of work for 14 months.  In April '09 I attempted to get a loan mod but they told me I couldn't because I had a negative cash flow.  I won't get into how unconscionable that is (considering a mod would have fixed that problem).  I attempted a few more times, only being offered a moratorium which I declined.  Frustrated, I reached out to a one of those community action groups & they contacted Well Fargo bank for me.  20 minutes after that call I was contacted by an underwriter from WF who was willing to work with me.  They started my trial mod (or so I thought) in Feb, 2010.  I told them I wasn't interested in anything that would hurt my credit.  They replied saying I "had to show some delinquency in order to obtain final modification".  The benefits seemed to outweigh the risks at the time & I agreed, knowing i was in for a balloon payment at the end that would be negatively amortized.  The trial payment (which i thought would reflect the final payment) was 700 & change.  During the trial mod I became employed.  In July, 2010 I was called by an underwriter & told I was not approved for a final mod.  I started to flip...the lady put me on hold, came back to the phone & apologized profusely, admitted my mod was mishandled & offered me a final mod with a 4.75 rate (FHA rate for the time).  My payment did not change much though...i went from a payment of seven & change on the trial mod to a payment of 1020 on the permanent mod - $90 less than my original pmt. @ 6%.  My credit score suffered, but only for a few months.  There was also about 4k of neg. am.

(continued)
  • March 10 2012 - Naugatuck
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (13)

Profile picture for Ian McNulty
Cool.  Thanks for the info.  Looks like it wouldn't be so crippling after all...maybe a $200 loss?  I can reconicle that easily...as for getting approved - I don't think it'll happen until tax time next year.  My credit union is super liberal, so I think I'll bark up that tree first before hitting up a co-signer if there is an urgent need.  They consider 80% of rent income as well...but I don't know about equity or lease history...

to be continued...
  • March 17 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Yes anything on schedule E reporting the rental income will be used to lower the gross rent for the year except depreciation is added back before the final figure.
  • March 17 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ian McNulty
For me, personally, the biggest reason is that I'm trying to get closer to my job...& renting is against my religion - if I'm gonna rent I might as well sleep in my car & use the ample facilities @ work while saving money.  Also for the same payment that I'm swinging now I can get almost twice the note, or more preferably, for about half the payment I can get the same thing in a more desirable neighborhood.  My fico is 700+, I have a perfect payment history (save for the mod debacle which has already blown over).  If I can avoid renting I definitely will...in fact I'd kinda like to buy up a bunch of units here for an investment since they're so hurt value-wise.  I want to punish this neighorhood with some section 8'ers of my own...I've had enough.  It was OK when I was 20, but now it's time to move on...

@ Russell - I imagine they also lump assn fees/common charges in with those numbers as well?
  • March 17 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Cindy Quinton
Here's the thing I can't figure out from the posts (and others in the same boat who've posted). You can rent it out and break even, but your major concern is that you'd "be crippling my ability to borrow for a primary residence."

Why worry about it? Unless you are reading directly from NAR's website, virtually everyone else in the country thinks we are still looking at a market that hasn't leveled out yet. Go rent something, then in a couple of years when things are more settled and you have a two year rental income history, THEN buy a new home. Why be so eager to jump out of the frying pan into the fire?
  • March 17 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You are correct.  Most programs work this way:  If you rent out your current primary residence, you can count 75% of the rental income if you have at least 30% verifiable equity in the property.  We would subtract out your mortgage payment including monthly taxes and insurance from 75% of the rental income to calculate the income or loss on the property.  Another option for later is once you have reported this year's rental income and expenses on your tax return for next year, the profit or loss on the return will be used and the mortgage payment is not counted (since the mortgage interest, taxes, etc are already included in the bottom line profit or loss calculation).
  • March 17 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ian McNulty
Renting it out would be the safest play.  I can easily break even on it or negligibly better.  I've been under the impression that if i do rent it out & break even that I'd be crippling my ability to borrow for a primary residence.  Is that not the case?
  • March 17 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I unfortunatley agree with the fact that you will have to suffer some credit damage to leave this property. If you lease it out your debt to income may not qualify for another purchase as you will have to show enough to cover both mortgages. If you can do that then I would absolutely do it even if you are just breaking even after expenses etc. on the first. Your in a very similar situation to many people today. The banks are terribly slow and inacurate in the mod programs, they have very little structure and most of the employees are new in hires with a basic pay. Your mortgage mod didn't change the price because it sounds like you didn't get a HAMP mod but rather one of their "investor" agreed mods. With the addition of all the banks fee's, legal costs etc. tacked to your loan it raises your principal so even with a rate adjustment there is too many other charges to see a viable difference. It is difficult to go through and very unfortunate, but it seems those of us who are honest payers are the ones that take the worst of it in the market downturn. Maybe consider the short sale if necessary, take pride in your home while short selling and try to make it a quick and painless as possible experience. Going that route will mean you may have to rent/lease for a few years after but that should give you some time to build up a large down payment and go 15yr next time so you can get rid of the bank note ASAP! If you need a list of the top agents in your area for a short sale just let me know. Im very familiar with what your going through and willing to help however I can.
Best of luck!
  • March 14 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for pawsoffmymoney
I don't think you've been wronged, at least not intentionally. As someone else stated, the bank is doing you a favor by "considering" letting you out of your original promissory note, whether or not it works. There is no way for them to do that without it having a negative impact on your credit. This is a negative situation and the bank has an obligation to the credit system to report it as such. I feel your pain, believe me but you may want to consult with an attorney to map out for you the best way out of the property with as minimal damage as possible and just accept the fact that for a few years you'll need to rebuild your credit.
  • March 14 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ian McNulty
thank you all for your input, keep 'em comin!

@ pete - if i go the short sale route i'll be in touch.

@ chuck - you must be a banker...lol.  if you are i'm truly sorry the last few years have been so rough on you ;-)  i'm not looking for a free lunch, & i pay as agreed (for now).  as someone who has good credit, the idea is "why make it bad if you don't have to?"  i'm looking to minimize the loss/damage at this point.  if i can rent the place out without murdering my ability to borrow for the next place that would be great.  i don't see it happening that way, but one can hope.  more realistically i'll end up buying & bailing :-/ (that was a joke - before you get all high & mighty on me).  as for feeling wronged - that's all about the butchering of my permanent loan mod (which they admitted themselves) & associated misrepresentations by the bank.

also - my lawyer sent me an article yesterday about some nice whistleblower accusing BoA of defrauding hamp...specifically receiving financial incentive from the feds for hamp but not giving owners mods as required by the program.  i'm sure WF & the rest of them are pulling the same nonsense...i've already got him on it.  http://www.reuters.com/article/2012/03/08/bank-of-america-whistleblower-idUSL2E8E804820120308
  • March 11 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I don't understand why people feel entitled to a loan mod, and to thenw ant one that doesn't damage their credit is quite preposterous. 

Hardship or no hardship, you are asking them to take a loss and alter your agreement. You are not paying as agreed so your credit SHOULD be damaged. Credit scores are supposed to be a reflection of ones ability and propensity to pay their bills as agreed, you apparently cannot do that. 

I know people get mad when I say things like this, but it's my opinion. HAMP money doesn't fall from the sky from the loan mod fairy, we all pay for it. I'm not a grinch and I understand that ---- happens, but get real. Your entire post presumes that Wells Fargo owes you something. They don't. They could just foreclose and be done with it, they don't have to modify a thing and if they do and it hurts your credit, you should say "thank you." 

I would love to know how you have "been wronged."
  • March 10 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Loan mod's are a joke for the most part.  Most never go through, it a great deal like short sales in that the customer usually gets screwed.

Short sales are a real joke, the reason most of them never close is because the banks make more money if they get the property back, especially on insured loans.  They were already bailed out and they get bailed out agian when they get the property back.

Many times when bank owner homes are sold the restricting for closing are a joke and clients can't meet the bank reqirements for closing especially if the home is in deed of repair for government loans.  There is not a great deal of common sence used by the banks today and one department does not communicate to the other in the REO area.  It's as if the left hand has no idea what the right hand is doing.

An even larger problem is in the short sale area where the banks are receiving many real bad, over inflated BPO's thus causing many short sale home to be on the market much longer than necessary.  All bank should be required to get professional appraisals on short sales as we have too many agents out their pushing poor numbers to make a buck as they can't do it selling in this market.

I spent 35 years in banking and we never had these issures.  Banks today for the most part are as corrupt as the federal government.











  • March 10 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Contact the hope hotline which has free counselors who help borrowers work with the borrower's lender for a solution.  http://www.995hope.org/

The sad part is you are telling a much too familiar story told by many across the country.
  • March 10 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ian McNulty
Fast forward to a few months ago.  My place is super upside-down (worth 87, owe 133), & I'm ready to move for a number of reasons, including work.  The rents are OK, about 1200/month.  I spoke to another WF underwriter about streamlined refinancing.  He explained that my loan was too upside down, even under the more lax FHA regs. & that unless there's a hardship (which there is) I'm pretty much out of luck.  I then bark up the hardship tree.  The first "home preservation" person handling my request may have been fired...she sounded like she was high on crack, & she lost a lot of my info.  I spoke to my new rep yesterday morning.  She tried to say that my loan mod was not a hamp mod (or fha hamp).  Worse than that, the explanation changed a handful of times & she was gasping & oh my god-ing at the info she was reviewing, leading me to believe they thoroughly butchered it.  The good news is I will soon be in touch with an underwriter.  Unfortunately I feel like I can't trust them & am considering getting my lawyer involved.  More than anything else I just want to get out & not hurt my credit again.  Also, if I have been wronged I'd like to make them make it right…

How would you handle this?
  • March 10 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.