American Home Mortgage Servicing Nightmare in Tennessee

[Joel Fraser]

Hi Folks, In July of '06 I found myself in a cash flow delima, so having considerable equity in my home, a cash out refi seemed to be my best solution. Unfortunately, upon applying I discovered there were errors on my credit report (none mortgage related) and my scores were in the dump. This blew me away because my scores were over 800 just a few years prior and I had not had any late payments since then. (Hindsight showed that high credit card balances took my scores down almost 100 points, what a scam) My mid score at this point was around 610. Since my situation was immediate, I didn't have time to deal with the errors, nor the means to pay down the cc balances. I shopped brokers. The best offer I found was a 2/28 ARM at 9.21, 514K @ 85 LTV. Again, because of the urgency I had no option but to take the deal, thinking that the cash out would provide me with a cushion to either refinance after dealing with the scores, or sell the home. Anyhow, we all know what has taken place over the past two years. My current situation is that I have exhausted all possibilities of a refi, I've exhausted all my reserves to stay current on this outrageous mortgage (I've payed these guys over 100k with only 3k in principal reduction), I'm now in an adjustable rate, I had my fist 30 day late in 22 years of mortgages as of 09/01/08, and you can't hardly give homes away in the present market because this is primarily a 2nd home market. I'm seeking words of wisdom. Any and all would be greatly appreciated. I'm concerned with the short time frame for foreclosure allowed by TN statutes. The lender's notice of default was generated on 09/03. I called the lender prior to default inquiring about a modification. I was told that wasn't an option until I was actually in default. Upon telling them that it was just a matter of time passing, they gave me a list of documents to fax for the mod application. They said it would take from 30-60 days for an answer and that there were no guarantees. Shortly thereafter my computer crashed, so I lost access to some of the financials they require plus I was sick for a week with the onset of the season change. It seems when it rains it pours. I've lost a few weeks now and time is not in my favor. I have the money to make a payment to avoid two times 30, but I am torn on whether this will help, since another 30 day late will occur on 10/01. I actually went online to make that payment last friday to make that payment, but I couldn't, they locked me out. Maybe this was a blessing in disguise based on your input. I'm thinking this money might be more wisely spent on an attorney, pursuing the avenues I've learned from this site. The lender's default letter gives me until 10/03 to bring everything current (Aug and Sept payments) or they will begin foreclosing. I don't have the resources to do this. I'm afraid to pursue a modification on my own based on a horror story that I read here where the lender claimed to be reviewing a mod app, but was actually moving full speed ahead with foreclosing. I've reached the point where I trust no one. Anyone in TN have first hand experience with this lender? I just need a modification to a more reasonable fixed rate and a little breathing room to get back on track. The lender has covered their bases with the default letter and the clock is ticking. The verbage of it has me confused as to what the best route for success in this matter would be. I know you hear that they really don't want to foreclose, but the verbage of their default letter says otherwise in my mind. Can someone please offer advice? I have absolutely no experience in this matter, but I can assure you once I get through this learning curve, I'll be there for the next guy. That's just my nature. Thanks guys.