Mortgage Forum

Mike

This is the story of our journey through the loan modification process with Counrtywide.We refinanced our home in March of 2005 to a 3 year interest only adjustable rate loan @ 7.25%. The amount of the loan was $384,500. Our loan was soon sold to CW, and they became our servicer. We also took out a second mortgage with HSBC in the amount of $95,000 @ 11.25%. Our monthly payment on our first mortgage was $2310, and $958 on our second. At the time of the refinance, our home was appraised at $525,000. Our credit scores were in the low 600’s.We are both self-employed. I own a small construction company, and my wife is a real estate attorney. We have both been in business for over 15 years, and now also owns a title company.In 2004 we started an extensive remodel of our home. We performed all the work ourselves through the construction company. We were near completion of the project in 2005 when we refinanced, but not completely done. As I stated we had not the greatest credit score, but we needed to refinance to pay the bills for our remodel project. Based on the market in 2005, we were confident that when the project was complete our house would have appraised for about $650K. This was based on similar home sales in our neighborhood, as well as assurances from several realtors and appraisers who are friends. We continued to work on the house financing the project ourselves, and making our mortgage payments every month. Our plan was to wait until January of 2008 and refinance to a fixed rate 30 year loan before our payment adjusted in April. This would have given us four months to go through the process, as well as improve our credit scores to qualify for a better rate.Our plan worked perfectly except for one problem. Our house appraised in October 2007 for about $400K. Our credit score is 767, but we cannot refinance due to our diminished home value. Our only option in order to afford our home was to ask for a modification. If not our mortgage would adjust to 10.25%, and our payment would go up $956. We contacted CW to discuss our options in December of 2007. We were told that we likely would qualify for a modification. This is how the process has gone to date. Keep in mind that we are professional people who have worked in the real estate industry for over 15 years.We started our modification request in January of 2008. We contacted the modification department on 1/16/08 and provided our financial information. During that conversation we had to provide all of our bills and income and they adjusted the income to get us in the system. We then drafted our hardship letter and put together all of the documentation they requested. We were told not to fax the information at that time, as they would call us back to confirm we were in the system and assigned to a negotiator. We were told to call back in 10 business days to confirm where we were at in the process. We were told the process could take 12 weeks for review. After numerous calls, it took until the beginning of February to finally confirm we were in the system, and what else was required to move forward. We were told that everything was on hold because they had not received our documentation and hardship letter. So even though we were told not to fax everything in January, that was what was holding up our deal (of course during our conversations with customer service no one ever told us this until the 15th of Feb)- we faxed all of our information on 2/15/08 one month after we started the process, base on what we were told. On 3/6/08 it was confirmed that our information had been obtained and our case was assigned to a negotiator. We were told she (Katherine Richards or Katherina Richards) would call us soon – every time we called they supposedly emailed the negotiator of our contact and to call us. We used our cell phone # to be sure they would reach us. Finally on 3/12/08 we spoke with Richards and she said they had all of our information, they were checking on the status of our property taxes, and she would then submit to management. She stated it should take 5-10 business days for the decision to be made. Our payment due April first was going to adjust up $956. She told us to make the April payment if we could, otherwise they would add the amounts due to our principal. We were told to call back in one week. We started calling almost daily starting on the 3/20/08, but could never get an answer. Every time we were told that a message had been sent to Ms. Richards and that she would call us back. Finally on 4/14/08 (three months later) we were told that Richards was no longer our negotiator, and our new negotiator was Misty Bennett. Of course she was not available. Again, we called every day at different times of the day to try and catch the negotiator. We were never told that additional information was required. On 4/23/08 we were told by customer service that it would be another 90 days before anything would happen and that it could be up to 120 days since there was a new negotiator. Countrywide had made changes on 3/25/08 as to how they were handling modification requests. Late that afternoon (4/23/08) – 5:30 our time – Misty did call us back and immediately started asking financial questions. She indicated that although they had our bank statements, they did not have our hardship letter, tax returns, or any other information we had provided. She requested that we resubmit all of our information. She stated that if we provided all of the information, she would review within 24 hours and call back with additional questions or concerns. She also stated that once the information was in the system it could take as much as 30 days to get an answer – she was very defensive and not helpful at all. On 4/25/08 we faxed all of the information requested – and updated - along with copies of the prior request. On 4/25/08 Customer service said we were up for review with management and the negotiator had been checking the status as well. On 4/29 – Again we were told the information was there but they could not review and the negotiator was monitoring. On 4/30 - We called in to make our late April payment ($3441 with late fee and phone pmnt chrg.) in order to avoid having a late payment on our credit. At this time we were told that our modification was denied, and that the negotiator had tried to call us on 4/29 but was unable to reach us. This was not true since we have V mail, and caller ID on every phone we own. They said we would receive a letter in few days. When we asked why we were denied they stated that our income was too low, that we were negative by $1400. We argued that we were never contacted by the negotiator, and based on the information we had sent them our income was higher than our expenses by $400 per month. The CS agent said she would change the income amount to match what we had said, and see if she could contact the negotiator to reopen the file. After being on hold for 15 min. she stated that the negotiator had closed our file and we would need to start over. She stated we should call back in a week to find out the status.On 5/7 – We contacted C Service and were told our file had not been assigned yet but we would likely be denied because our numbers did not match the outline of the system. We were now at positive 14% and needed to be at 10%. They said they would adjust the numbers on out file, and hopefully our file would be assigned soon. We asked how long, and they said at lease 30 more days, but maybe three more months.While all this has been happening our construction company has had very little work. We have been forced to use income from our other businesses to cover our personal bills, as well as the bills for the construction business. We have considered walking away from our newly remodeled home. This would be sad since we have done so much work on it, and we know the market will come back, and we will be able to refinance.We have heard through our many contacts in the business that this is happening to many people like ourselves who are only trying to use the resources we have to ride out the bad market. We do not want to walk away from our home. We love it here. That's why we spent our time and money improving the place. But if we are faced with paying $4,000 a month, and getting no equity for who knows how long, we would be better off to walk away from our great house.The situation with CW is appalling. If we treated our customers in the title business this way, we would not only loose all of our business but would likely be in jail. Why are these people allowed to get away with this.http://www.zinomortgage.com/images/smilies/mad.gif