A Comment from Diana: A Real Life Story of Today's Mortgage Mess and Why All Lenders Need To Get Involved

Last week, I wrote  Calling on All Mortgage Lenders on Active Rain! Be a Hero - Give FREE Time To A Distressed Borrower and Help Them Save Their Home thru Note Modification.

I told about how I have been helping families get their mortgages notes re-done by simply spending time with them and communicating with their mortgage companies to help them save their home from foreclosure.  I challenged ALL lenders to do the same. 

I have received a lot of great comments on it but none as powerful as Diana's. Please read this.  Diana puts the face on what is real today.  She isn't a real estate speculator who screwed up and now must pay the price. 

She is real person.  A proud homeowner who lives in her dream home with her husband and son.  She is scared, sad, confused, stressed, and can't sleep at night.  She does not want to lose her home.   And she shouldn't. 

Here is what she wrote me as well as my response.  

Once again, I am calling on all lenders to assist this process.  You all get calls everyday from people who cannot refinance because they are upside and cannot afford their new adjusted mortgage payment.  Diana is just one of tens of thousands.   Don't brush them off because you can't make money off of them in a refinance. 

You are the expert.  The professional they have turned to for advice.  Help them.  Get their mortgage company on the phone for them, ask for the note modification department, and help them understand what they have to do to save their house.   It will take you less than 45 minutes.

If you don't know how, please call me or email me and I will walk you through it as well.

Here is Diana's comments and mine...

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FROM DIANA:

Aaron,

I wish I could find someone like you in my neck of the woods. 

We are looking at a real chance of losing our home and I just want to cry. The stress it has caused me is so overwhelming. My husband and I can't even sleep at night because our minds are crowded with worry and "what if's".

7 years ago we were referred to a wonderful man who was a mortgage broker and he helped us get into our first home. Not a big fancy place and it's a not really in a popular big city but we love it.  5 months after moving in, I lost my job. It's been a constant struggle ever since.  We've been on the verge of foreclosure twice and somehow pulled ourselves out of it.  Last October we went back to see that wonderful broker because we were in foreclosure. He talked us into a loan that was an interest only fixed loan for the first two years - but would adjust in October 2008. He was able to get us a few thousand in cash to put in the bank to rely on for the first year of higher payments (we went from paying $1300 a month - including insurance and taxes, to paying $2200 with the new loan not including anything).  His idea was that we would build up our credit for 12 months, pay the house on time for 12 months and then come back to see him this October 07 to get us into a better loan - a whole year before it would ever adjust, no worries. 

We do well for the first 7-8 months but then we have car problems, higher bills and a multitude of other little things that add up and next thing you know, we're behind but making our payments within the next 30 days - determined not to get to 60 days but knowing we are walking on the edge and about to fall off if something happens.

So I call the broker to see if we're going to have problems in October with us paying 30 days late and he assures me we'll be fine, just stay under the 60 day mark and he'll see what he can do .. and call me back.  I get no call for a week and then he tells me what we all already know - he can't get us out of this loan and he suggests we sell while we still have some equity in the house and rent instead.  Problem #1 - I do not want to move! I know it might seem silly but the reality is, my son is at an age where he needs stability including a home in this neighborhood with his friends. Not to mention we have pets and we've been working so hard to try and keep this house - I can't just let it go. Add to this the fact that both the homes on either side of me have been up for sale for at least a year - no one is buying! Even if we put it on the market, I know it wouldn't sell - nothing is selling here right now.

We trusted this man. I feel so betrayed and left up the creek without a paddle.  I also found out in the process of talking to various people at Countrywide (the people who have our loan right now) that there is a $10,000 prepay that neither my husband or myself remember being told about - but I'm not counting it out that we were told and just didn't fully understand.

So now I'm playing a game of phone tag with Countrywide to try and get a loan modification because we owe for August and now September .. with October here in a week. We do not have the money.

If we could just get 2 payments worth of funds under our belt - we could put one month in the bank and pay the first month with the second one. What my husband brings in each month is enough for a NORMAL house payment. I'm not expecting to get the $1300 a month again but we can not afford the $2200 either and especially when we have to pay taxes and insurance (we are behind on those as well!).

I'm out pounding the pavement looking for full time work and have signed up with two employment agencies who are impressed and seem to believe they can get me work within the next month. If we could get something done about the loan as well as me finding a job - we would be set.

I'm sorry I'm rambling. I'm stressed, confused, scared and sad.  I honestly do not know what we will do if we lose our home. All of the technical talk is overwhelming. I do not understand the people at the banks and I do not know what they need to hear. 

I'm suppose to fax my husband's paycheck stubs and a hardship letter tomorrow - I hope I don't screw up!

Thanks for doing what you do - thanks for letting me vent as well.

Take Care

Diana

FROM AARON:

Diane--- Thank you so much for your comment.  You have really put this blog into real perspective. 

First of all, I want you to know that you and your husband can start sleeping at night.  It is highly unlikely that you going to lose your home.  Countrywide has hired 2500 people to help people, like you, stay in their homes.   They call that department, "Countrywide Hope."

I saw a press release yesterday where they proudly say they have saved 35,000 families from foreclosure so far.   You will likely be 35,001.   

Don't stress, be confused, scared or sad.  You are doing the right thing. 

It sounds like you are talking to the right people at "Countrywide Hope."   Their job is to help you save your home, not take your home. 

If they have asked you for the hardship letter and your husband's paycheck stubs, you are likely talking to the right people.   Don't worry.  You cannot screw it up.   If your comment to me is anywhere close to the hardship letter you wrote, that part is done correctly.

The paycheck stubs are requiredsimply so they can determine if you will be successful in the note modification.  They are not pre-qualifying you for a new loan.   They are going to look at your entire financial picture, as well as your credit in all likelihood, and give you complete financial advice on how to make this work.

Don't worry about the prepayment penalty or anything else about your current loan, including the past due payments.  

What you can expect is a new 30 year loan, not interest only, between 6.500-7.250% and some serious advice on how to manage the rest of your current, non-mortgage debt.   They will probably add the past due payments to the back-end of your loan or roll partial payments into your new one. 

This process is not going to be easy but it will very likely get done.  Your payment will no longer be $2200, but it won't be $1300 either.

If you stumble at all, and you need someone to get in the middle of this to help you understand it all, please do not hesitate to call me at 702-283-2333.  Anytime.   I will gladly call with you, speak with rep at Countrywide, and make sure you better understand this process. 

There is nothing more important in this life than your personal health and happiness.  Stress often comes from things we can't control.  I want you and your husband to feel like you are in control of this because today you are. 

I believe this challenge will be overcome successfully and I am here for you if you need me.

Thanks, Diana!!  Best of luck to you and your family.  Please update me of your progress.

Aaron