Mortgages with Litton and Wilshire

[Joel Fraser]

Hello, I would first like to thank everyone who posts to this site. It has been extremely helpful to my husband and I. Here is our story: My husband purchased/built our home in 2006 prior to our getting married so I am not on the loans. The purchase price for the house was $384,000. He has two loans 1) a 30 year ARM currently at 8.55% and will increase to a whopping 11.5% in October with Litton. 2) is a balloon note after 15 years and currently paying monthly interest only payments @12.45% with Wilshire. One would think that with interest rates like these that a person's credit score had to be in the toilet but his was 700. Total mortgage is 3428.00. I started to become weary when I was reviewing loan documents to prepare for a refinance. There are pre-payment penalties on both loans but have already past. My husband also had equity ($66,000) in a prior home that he was "advised" to put into an interest bearing checking account and that all would be ok and to just refinance after two years. The application said things like "stated" income and the closing costs were astronomical.Well here we are at the two year mark and like everyone else we are upside down in our home and the $66,000 was used to make the house payments/improvements and is gone. The appraisal came back $70,000 less than an appraisal done at closing. So....we are upside down to the tune of $64,000. We have bounced around many ideas. 1) re-finance with an FHA Secure for the 1st loan. But to me this just doesn't seem logical because we would have to finance the closing costs and we would be adding more to an already upside down loan. 2) entertained the idea of FHA's new program in October 08 but who would want to pay back hard earned equity to the government plus there is a lot of hoops to jump. However a broker told me after 5 years you don't have to pay equity but that was not how I interpreted it from various sources.3) loan modification - we have already started this process with Litton. _And thanks to Cat for posting email addresses to the loan modification department. _For weeks, our questions went unanswered and we were unsure if we had sent in the appropriate paper work. I sent an email yesterday and heard back from the mod dept today and we should know an answer by the end of the month. They said they will be doing a BPO. I asked the representative (Shawn Wilson) if a copy of the appraisal would be helpful? He said yes. This is where I had a question and I apologize for the lengthy post. Should I provide an appraisal of $330,000 when there monetary interest in the property is $304.475? He said that when the Debt to income ratio is high the investors may reduce principle and I don't want to jeopardize any proposals. Thanks for taking the time to read our story.:)