Need advice on modification letter

[Joel Fraser]

helloI found this site the other day and found itvery informational. We are3 months behind on our payments and are on a repayment plan was advised in februar to ask for a loan mod because we are on an ARM. so we sent in everything and yesterday recieved our letter explaining that our rate would drop from 12.75% to 7.5% but states annually what does that mean? our principle jumped up to around 10000.00 more. It says our first payment will be due July 1st and all we need to do is sign and send in $500 but they say we are in default and that they could still forclose, I also made another payment since the date of letter and and want to know where that payment will go and there is nothing stating about the past due amounts, what about my repayment plan, I have the payments due on the end of each month does that mean I will have one due on June 30 and then one due on July 1? I have tried calling the person on the letter but have to leave a message, Want to know if this is a good thing, we want to stay in our home. thanksall stressed out