First Franklin Loan Modification / Foreclosure

[Mike]

Hello: We purchased a home in Plantation FL in 2007 - closing was 3/20. We have an 80/20 mortgage through First Franklin. Due to some family financial hardship, we fell behind on our mortgage. After defaulting, we received notification from a foreclosure attorney of a pending foreclosure filing. Having learned from watching TV to contact the loss mitigation department, that was where we started. Its a grueling process filling out forms and compiling pay stubs and tax returns and faxing them, only to learn that they didn't get it or lost it and we refax and refax, then our rep is not available when we call and they transfer us to someone else who tells us our file is empty, so we refax again then no one ever answers the phone when we call and no one returns our calls after we leave message after messages. Then one day, out of the blue we reach someone who is actually familiar with your file who actually seems to want to help - mind you this is 4 months after we attempted to start the modification process. We told this rep that we needed to have the property taxes and homeowners insurance escrowed as well as loan modification, because we ended up with a $7000 tax bill this past March which they need to pay, which she says they will. This rep tells us we have to make three consecutive repayment payments at set amounts before the actual modification is put into place. When asked what the modified payments would be, she gives us a general figure, but nothing concrete and nothing in writing, which leaves us a little skeptical because there is nothing preventing them from making the payment even higher than it already was. We finally received our "repayment agreement" in the mail and due to our skepticism we have yet to sign it. The agreement is so open ended, that we are really racking our brains trying to determine if it is truly in our best interest. We did request new repayment amounts. They agreed to lower the initial payment, but the subsequent payments must remain the same - fair enough. At the same time, we can't get an actual figure for the monthly payment in writing - just a window of where it might be. In addition to this, we are also facing a situation where our home that appraised $28,000 above the purchase price in 2007 has lost about $128,000 in value due to the market slump. We are now seriously upside down. Our original plan was to refinance in two years before the first adjustment of the ARM, but now will not be able to do that and who knows how long it will take the market to climb back up - if ever. South Florida home prices went so high that the average person can't afford to buy a house anymore and the only reason we bought when we did was to get one before they got completely out of reach. So here we are with our ARM, our home losing tremendous value and our taxes have tripled. Our only hope at this point is through loan modification negotiations. My husband has spoken to the foreclosure attorney who informed him that the dockets are so full in South Florida, that she can't possibly get a court date until August. So in a sense we have a bit of breathing room, but not much. I am not willing to just blindly accept their modification and have it be something outrageous, only to end up in the same situation or worse, especially given the fact that we are so upside down. To be quite honest, the only thing that keeps me from seriously thinking about away and sending First Franklin the keys (Jingle Mail) is the fact that Florida law allows retaliation for creditors, wherein First Franklin can file a deficiency judgment against us and we could have our wages garnished, otherwise I may have just elected to walked away. Don't get me wrong, I love the house and I want to maintain financial responsibility for it, I just want it to be something we can live with., and given the fact that we will not be able to refinance this loan down the road any time soon, I want to carefully think it out, plan it out and negotiate the best deal that we can. After the foreclosure suit was filed, I sat down and closely examined our closing documents for the first time and was horrified at the details of our ARM. Our 80% mortgage is for $320,000 (the ARM, 30 years) and the 20% mortgage is for $80,000 (high fixed rate, 14 years). We have gigantic balloon payments at the end almost as much as the original mortgages themselves and the adjustable rate can go as high as 14.55% and adjusts every 6 months starting in 2009. Hopefully loan modification will help us to make it something we can live with, given we won't be able to refinance it for a good long time. Like I said, they have filed the foreclosure, so as far as "deed in lieu" goes, I don't know if that is an option here. Short sale is not even going to come close to the first mortgage, so I'm not sure that is a good option. Does what we are doing make any kind of sense, given the circumstances? I'm sure there are people who just blindly sign these agreements and never question them and I'm sure there are people who get scared and just move on. We have contacted attorneys, who for a nice fee, will step in and work on the loan modification agreement, foreclosure, etc., but it seems we would be better served applying that money toward the modification agreement, should we decide that is what we really want to do and we are already negotiating. Thanks for developing this site. Its very informative. You've done a great job with it. ~ Evelyn :confused: