Downey Savings

[Joel Fraser]

I have a home that I refinanced about 3 years ago with a broker. It turned out to be a Downey Savings loan. The home was bought to help a young friend who wanted to be a foster parent. The minimum payment in January was about $1599 and the rent from the home was $1400. In January, I contacted Downey Savings as I was hearing about a lot of people having bad loans. I did not really understand what type of loan I had as I had set it up on billpay and just had the payments coming out automatically. I contacted the friend and told him I would sell the property as I was afraid the loan would reset. He asked me to let him buy the home, so I referred him to a loan officer. Of course his family deterred him and told him to watch the market first and he never went through with it. So, I contacted Downey Savings about modifying or short-selling (http://www.zinomortgage.org/forum/short-sale-outpost/) the property. They refused to discuss it with me stating that they just service the loan and they have an agreement with the investors to 'neither refinance or modify the loan'. They also state that it is an federally backed loan. I have contacted them several times with the same question. They state I have no option but to pay the mortgage payments. The home has dropped approx $100K in value plus the negative amortization. The home is now worth 210K and I owe approx 350K. I even tried to hire a loan mod com who stated that Downey would not allow a modification on the loan and they bailed out of trying to force them. My payment escalated to $3900 per month in June (which I did not know until I made my July payment). Of course this means that I am a negative 2500/mo plus garbage and water bills. My income on my regular job is approx $5200 / mo. My primary home mortgage is approx $3700 / mo. Needless to say, I am already struggling with my primary mortgage, credit card bills, children in college, etc. Technically, I quit paying my mortgage payment in July. Does anyone have any ideas on how to get Downey to allow a modification and/or a reduction in the amount owed for the home? Also, I asked my primary home (ASC/Wells Fargo) to modify their loan, but they refused on the basis that I can't afford my mortgage even if it is modified. They also refuse to refinance because I owe $80K more than the value of the home and they will only refinance 80% ltv. With the difficulty with these two homes, I am now destroying my credit and will have no hope to refinance soon. This may seem stupid to ask for help as I actually work in the real estate industry, but can't even get my own to deal!