80/20 with Countrywide, Attempting Modification

[Joel Fraser]

Hi everyone, I'm new here and would like to introduce myself. You said the more information the better, so, I apologize in advance for this being so long. I really do appreciate anyone who reads it all the way through and has feedback. I bought my house in March 2006 in Michigan. A few weeks earlier, when I made the offer, my mortgage broker told me I had “locked” in a fixed rate loan. So I put up my good faith money, paid for an inspection and an appraisal, gave notice on my apartment, scheduled time off from work and paid for a moving van, title fees, processing fees etc. Three days before closing the broker told me that the underwriter was no longer willing to make the fixed rate loan but offered me an 80/20 where the 80 would be fixed for the first two years then adjust and the 20 would be fixed. He said it was a good deal and that as long as I kept up with my bills and stayed at my job I would have no problem refinancing into a fixed rate loan in two years. The Realtor and title person said the same. I searched on-line and spoke to a few home owners that I knew and saw the same advice repeated everywhere, so I felt fairly confident that it was true (and perhaps it would have been if the market hadn't taken a nose dive). I also felt enormous pressure because of all the money I'd already put up and because I'd already given up my apartment. So, I signed the papers. It wasn't until recently that I really understood what happened, that I had been played. I was young, naïve and trusting. Two years later, I feel old, bitter and cynical :( This brings us to February/March 2008. Even though I have never made a late payment on the mortgage and I have dramatically improved my credit score, and the housing market in my part of the state really wasn't that bad (we never really had inflated home values), I could not find anyone willing to talk to me about refinancing. Lenders were already reluctant to make new loans, when I said Michigan, they all but laughed at me ... some actually did laugh. So I called Countrywide, after running the gauntlet that is their automated phone system for a few days, I finally figured out how to get the work out department ... I was lucky enough to get someone who barely spoke English and who got a good chunk of my information wrong because of the language barrier. I did everything they told me to. I faxed in all of the requested information the following day. I called later in the week to confirm that it had been received, they said that it had been and it was at that time that I learned that the information they had on file was wrong. But they said it was too late to fix it, that I would have to wait 30-45 days for their response. By the end of the week I received a rejection letter, which was actually dated the same day that I called in, a day before I faxed them the supporting documentation. I had been rejected outright. I called Countrywide repeatedly and got the run around, transferred and disconnected more times than I could count, a Countrywide rep finally convinced me to wait for a letter that would tell me what my payments were going up to. When the letter arrived, it was temporary relief, my monthly payments were higher, but I could still make them. And then, I admit that I became complacent, I didn't want to think about dealing with Countrywide and I convinced myself that I was waiting and watching the news to see if lenders became any more agreeable under pressure from the public and Congress. I finally snapped out of it and called Hope Now a little over a week ago. I was referred to Novadebt and spoke to a lady named Kate who seemed very helpful, confident and business-like. She gave me some good insight on my budget, we agreed to contact Countrywide and ask for a loan modification to fix the loan at either its introductory rate or roll it back even further. I gathered my documentation and called back, only this time, Kate was not available, and I got someone who did not inspire any confidence at all. We called Countrywide, and went through the exact same channels I had gone through on my own. She got bounced around and seemed as clueless and frustrated as me, and I ended up doing all the talking ... honestly, I could have (and have) done that on my own. So we finally got someone in the work out department. She took down all of my information and gave me the usual spiel about waiting 30 days. I told her that I had been through this back in March and about the letter that was obviously generated without anyone reviewing my application. She softened up a bit and said that a lot of things have changed since then and that they are working with more people and modifying many more loans, especially ARM's. She asked me to send in two bank statements and proof of income. She said I did not have to send in a hardship letter, but could if I wanted to. So, that's the long story that probably sounds like a hundred others :) Now I'll give you the numbers. My monthly net income is $2309.00 (that includes a $400 rent payment from my boyfriend and my work income) Countrywide figures that my monthly expenses (including the mortgage) are $2165, leaving $144 each month. First Mortgage Payment = $694.55 10.875%, Variable ARM, The current wall street journal index plus 8% points, can not vary by more than 1% every six months, capped at 15%, next change date should be Nov 1.Original Principal Balance $74,000.00 Current Principal Balance $72,805.55 Second Mortgage Payment = $198.88 12.6% Fixed, Balloon Payment due April 1, 2021 Original Principal Balance $18,500.00 Current Principal Balance $18,350.16 I'm going to fax in my pay stubs, bank statements and a hardship letter this week. I have a concern about the bank statement. I have a joint checking account with my boyfriend, it makes it easier to pool our resources for groceries and paying household bills. But, this means that some of the debit card charges on the bank statement will not be my expenditures, it will also show a little more money deposited by him into the account each month to cover his share of groceries etc ... is Countrywide going to hold that against me? I would also really appreciate advice on what I should include in my hardship letter. My goal is to get into a fixed rate loan and have a total monthly mortgage payment of $700-750, should I tell them that? I would of course be happy to have even lower payments, but I think that this range would be manageable for me and more realistic in terms of what Countrywide might be willing to do. Also, should I give it two weeks and see what the status of my request is or should I start being aggressive immediately? If immediately, how should I start? Emails? Please ask questions if you need any more info!:D