Nationpoint-FF Loan Mod Attempt

[Joel Fraser]

I've been lurking a few months and decided to share our story for any input from anyone. We purchased our home new in 2005 for $462k with an 80/20 thru First Franklin (1st IO ARM, 2nd 9.25% 15yr fixed). In 2007, just before the first rate adjustment, we were able to refi with Nationpoint (fka FF) and paid a point to get a 30 yr fixed at 6.55%. We do not escrow. The Nationpoint rep said our 2nd was at a good rate and they couldn't touch it. We have a friend who owns a mortgage company and she ran some quotes and thought it was a good deal. At the time of the refi (Aug 07) the house appraised for $484k, so we used the extra value to pay refi costs. Jump ahead 6 months after refi to 2008 - in Feb, husband lost his job. He searched diligently but hasn't found anything substantial due to somewhat specialized line of work. We used savings and retirement funds to make payments. In May, we submitted a hardship pkg and let the May payment go until the last day of the month, hoping to get some attention. In June, I was able to get verification over the phone that they received the pkg, but 'they're really busy.' In July, I was told it had been reviewed by a mgr and was complete, but had been forwarded to a negotiator (still current on payments at this point). In August, I chose not to make the payment. When we got the 1st collection call, I told them we were waiting for help from a negotiator and they said we had been called on August 4 but they couldn't reach us. I responded that we had voicemail on every number we'd provided and they said they weren't allowed to leave messages! I asked them to note in their files that we requested messages so we could return the call. I got a call from a negotiator later that week, who left a message, and I returned his call that day (8/15). He basically went over the info in our pkg to see if it was current (waste of time!). He said he would order an escrow report -- when I asked why, he said any modification would require escrow. He thought he could drop our interest rate to 5% on the 1st for 2 years, but I told him by the time he adds the escrow, the pmt will be higher than it is now. I asked about the 2nd and he said he didn't have much wiggle room there but he'd try to knock off a point. That's the last we've heard. I called yesterday and left a message on his voicemail asking for a call back. I then decided to be bold and put an offer out - I FedExed a letter to the negotiator re-stating our situation and our desire to meet our obligations and stay in our home. I told them the situation in our neighborhood (2 homes in pre-foreclosure, no sales). Our property tax statement shows present value at $344k -- $140k LESS THAN ONE YEAR AGO!! I pointed out that if they foreclose, they will not be able to sell it for even the amount of the 1st, and the 2nd will lose out completely. We would file bankruptcy to avoid the constant future hassle of avoiding a judgment. I requested an immediate reduction of the interest rate on our 1st to 4.75% for 3 years and agreed to the escrow account, then stated approximately what I thought the payment would be. I then said we would be willing to withdraw money from a 401k to make a cash payment of 10% of the balance of the 2nd, IF they would write off the remaining balance and there would be no negative reporting to the credit bureaus. I know it sounds crazy, but hey -- isn't this whole market crazy right now?! I got a call from collections again tonight - at least she was friendly and somewhat compassionate. She stated the amount we owed for August and September plus a late fee for both loans and asked if we could schedule a payment. I said no, we were waiting for the negotiator. She said she needed to let us know that if a payment isn't made by Sept. 30, we will be considered in breach of contract and foreclosure proceedings would begin. She was at least kind enough to say 'I hope things work out for you' before the call ended. So that's where we are. A house in a neighborhood nearby was just sold at foreclosure. I checked the court filing and the Lis Pendens was filed 1 year ago. I really hate to go through foreclosure, but at this point I'm willing to live here payment-free while they figure out what they're doing. I just hate telling our kids we're going to have to move, and I hate it even more because everyone LOSES (us and the mortgage companies and even our neighbors). Just my thoughts. Thanks in advance for any advice!! Frustrated in Florida