Indymac constr to perm - Modify now or wait?

[Joel Fraser]

Hi. In 2006 I took out a construction to perm loan through Indymac. Three months into the project I fell off the roof and crushed my heel. Indymac wanted to requalify me and put me into a new loan. I stated in no uncertain terms that with my injury I would not qualify for a new loan so they modified the existing loan. The original loan was $370K. The modified amount is $480K. The value appraisal was $500K. Recently two neighbors sold under value at $392KAt this moment I just received the last construction draw so there is 30K in the checking account but only because the construction loan was a reimbursement loan. I made arrangements with the contractors that they get paid with the loan disbursement. The 30K is paid to them so it will be dispersed within the week. The construction portion is now complete and it is time for it to roll over into a perm loan. They are offering a 5/1 Arm and the loan officer stated that because the LTV was more than 80% I needed to have PMI. Since I did not qualify he was raising the interest rate to 8% to factor in the missing PMI. The docs for the perm mortgage just came in today and they are requesting them back by the day after tomorrow. This again, is a modification of the original loan. There was no qualification.