Mortgage Forum

Joel Fraser

So here's our story. In 2006 we bought a lot to build on and got a construction loan with indymac. At the time my husband owned his own remodleing company. When we rolled the construction loan to perm mortgage for 750k total. the house was about 95% complete and we had a U&O from the county. We then got a 142k HELOC to finish the house. (my husband was the general contractor and went a little crazy with the construction budget - it was the first time he had tried to build a house). Both the mortgage and HELOC are in my name alone. They wouldn't qualify us with him on the loan because they considered him self employed. In the end, we ended up owing Indymac 750k for the first mortgage (which had rolled in our loan for buying the lot) and a 142k HELOC. The first was a 10 year mortgage only loan at 6.5% and the HELOC was interest only 9%. Just as we were finishing the house in May 2007, the housing market took a huge drop. As a result my husband's remodling business went under. he had to declare business and personal bankruptcy. We also couldn't sell our previous home for what we thought we would be able to. So we had to do a short sale on it or would have been paying a 902k mortgage and a 450k mortgage. We got national city to approve the short sale on the old house, but I agreed to pay the shortfall off over time. So I still owe Nat City 50K. My husband was out of work from May through October 2007. And I was on unpaid maternity leave from september to november 2007. During that time I used credit cards and loans from my 401k to pay the mortgage and support our family. He got a job in November 2007 making half what he made when we started building the house. In January 2008 I began calling both the mortgage and HELOC divisions at Indymac to try to get a modification or refi so we could afford to stay. I was told that we didn't qualify for a refi because we already had a pretty good interest rate, and our rate didn't change for 10 years, and we weren't behind on our payments at all. I called and called and called every few weeks from January through April. No progress. We used every credit option available and borrowed money from family members to cover the mortgage and pay bills. We decided to not pay in April to try to get them to at least negotiate with us. That finally got their attention. The first mortgage team agreed to lower our rate 2 points for 3 years and wipe out all the fees and penalties. The HELOC offered us a 2pt modification as well. I finally thought maybe we would be able to stay.... The modification documents we actually on their way to me.... Then on May 15 my husband was fired. I immidiately called Indymac and said we no longer were able to do the mods they had offered and asked about other options.... NO RESPONSE. I called and called everyday. Finally I got a nice woman to explain all my options. She said I could apply for another modification and send revised financial statements but that we likely wouldn't qualifiy for anything that would actually reduce our payments to something I could afford on my salary alone. So she suggested we seek a short sale. I asked about deed in lieu ... she said indymac has only done 2 or 3 deed in leius in the last year, and they are disfavored there because they make less money on those than they do on forclosures for some reason. So I immediately listed the house for sale and we spent our april and may payments getting some unfinished work done that our realtor said were absolutely essential before we could sell. We listed our property at 85% of the first mortage at our realtor's suggestion. He said that's usually the minimum the banks will accept on a short sale. We couldn't get any offers. The house still has work left to be done and is double the size of those on our street. (when we bought the lot there were three other empty lots where people had plans to build similar size houses ... then the market took a dive and they didn't build and they are all trying to unload their lots) So we owe 750k on our first mortgage, and indymac has it - the nice lady I spoke to told me our investor is Deuche Bank. The HELOC is 142k or so and is held by indymac. We lowered our asking price and finally got an offer earlier this month and submitted a signed contract and short sale package to indymac. I called and called to see if it had been assigned or what the progress was and got no answer. They told me that it takes 3 weeks just to "image" your package and have a liason check it before it even gets assigned to a negotiator. Then I found this site. I sent an email with a pdf of my package to the people you've all listed. I got an email today from someone who is the head of the short sale department at indymac and said they are working on my package. I hope they at least give me an answer before the buyers walk. Our contract says they can walk if the bank doesn't approve the sale within 45 days.... My husband put his heart and soul into building this house (and unfortunatley all our money). So loosing it is tearing him up. He wants me to ask them to consider a modification that would have us get a 30year fixed mortgage for market value of the house. That would net them more than they will net from the curent short sale package offer because of the realtor fees and closing costs. But he still hasn't found a new job. And ...the house is worth about 600k in its current condition, and 700k at the most if it were finished, iand we owe 900k. So it doesn't make sense to me to seek modification unless it would reduce the loan balance and not just reduce the payments temporarily. From what I hear they mortgage companies aren't really doing principal write downs... so I think its unlikely..... Anything else anyone have to suggest about ways to get the short sale package approved ? Can I assume they will just write the whole thing off or will they only approve it if I agree to pay some of the deficiency ? Anyone think I should ask about a write down or that a write down from 900k to 600k is even within the realm of possibility ? Anyone hear anything about short sale or mods where investor in mortgage is Deuche Bank ?? Thanks in advance for listening to my story, and for any suggestions you have !