On 2/24/2009 I faxed in documentation EMC requested for a loan modification. I have so far adhered to the payment plan that was set up for me starting 11/15/2008 through 04/15/2009 pending the modification.
Today I learned that my request for a modification was denied (only after I called to follow-up, no one called or wrote to inform me)
Why do I want a modification? - the loan is predatory (Interest Only, Adjustable and with a High Rate - 11.5% - Since 2005, I have created ZERO ownership in my home).
While I consider approaching a HUD counsellor, please accept this as my formal request today March 12, 2009, to PRODUCE THE NOTE ON MY HOME.
It is saddening that after receiving $25 billion dollars in bailout (taxpayer) money, JPMorgan Chase is refusing to make a predatory/unconscionable $37,000.00 affordable for the homeowner.
Even more saddening is the fact that if the fact that JPMorgan Chase is unable to realize that, with current suppressed home values in Atlanta, if this mortgage goes into foreclosure, even the primary lender (Suntrust Mortgage - 80%) will not receive enough proceeds to satisfy the debt. Which would mean that JPMorgan Chase would definitely get nothing.
t just makes good business sense for EMC to modify my loan, I wonder why and how come EMC cannot see this.
I have never asked for a principal reduction. All I have been asking for is realistic solution - forget the complicated math, make the loan affordable to me - so I can keep my home and EMC can receive their payments.
I hate to do this, but since the payment plan I was told to adhere to this payment plan pending the modification of my loan. Of course I understood that this would be reported negatively to the credit agencies. The modification has been shot down. I will not cease payments totally, but going forward I will pay EMC what I can afford.
In the meantime EMC can add the outstanding debt to my principal balance until they chooose to foreclose or modify my loan (whichever they see fit to do).
While you are considering this, please don't forget to PRODUCE THE NOTE on my mortgage.
FOLLOWING IS THE STATEMENT I SENT IN SUPPORT OF MY REQUEST:
By August 2005 I had very good credit. In spite of the fact that Bank of America had 3 duplications and 3 errors on my credit file my median score was still in the 700's. Please find enclosed item A', a merged credit report from 8/13/05 showing my scores from Experian, TransUnion and Equifax. The second page of item A' shows the erroneous derogatory items that I speak of.
Bank of America eventually realized their errors and updated my information with the credit bureaus. Please find attached items B', C' and D'.
In fall of 2005 I was in the market to buy my first home. I was approached by a realtor who said since my credit was good and the real estate industry was doing well it would be the best time for me to buy a rental property in addition to my primary residence. The agent referred me to a lender (Accredited Home Lenders, a sub-prime lender currently out of business) who would provide the purchase money. In addition I was told not to worry about the fact that my income ($32,000) could not support two mortgages because there was a healthy supply of potential renters who had already been inquiring about the house and all I had to do was close on the property and a tenant would immediately be placed in the property.
At this point I guess anybody can see where this was going, but at the risk of boring you I will continue: In November 2005 I closed on the property, the agent received a commission and vanished, and I got stuck with two mortgages and no renter for the rental property.
For a period I did what I could to keep up with the payments exhausting my savings and 401k, borrowing money from friends and family while I tried to find a tenant. In March 2006 I was referred to Specialized Real Estate Services who found me a tenant for the rental property. However the damage had already been done. All my resources were exhausted and I realized I was not going to have money for March's payment. Before it was late I called Chase and told them that I would not have the money for March's payment. I was put on a payment plan and I adhered to that plan
The lease on the rental property expired in February of 2007 and I was not able to secure a tenant so I paid the mortgage for February and March. After paying April's mortgage I decided to go ahead and list the property for sale so as to put an end to this problem that I had created for myself. We were set to close May 29, but the buyers could not make that deadline, it was moved to May 31 and once again they were unable to meet that deadline, thus putting me in the uncomfortable position of being 30days late on my payment. The buyers reneged on the contract and I did not have the resources to keep up the payments so the rental property eventually went into foreclosure in October of 2007.
In June of 2008 I accepted a promotion with my employer, Wachovia Securities, which involved relocating to St. Louis, Missouri. My relocation package included a home buyout benefit. This was one of the main reasons I accepted the position to be free of my primary residence with the killer mortgage note. However it turns out that Wachovia would only buy my home from me at the appraised value'. Due to a stagnant housing market and suppressed home values in Atlanta, coupled with a number of foreclosures in my subdivision, my house was likely to appraise about $15000.00 to $20,000.00 short of what I owe on it. That effectively killed that option.
In retrospect, both I and Suntrust Mortgage are culpable for marrying a $32,000 per annum wage earner to an adjustable rate mortgage on a $200,000.00 house. What is happening in the housing industry and the economy as a whole are just repercussions of bad decisions we all made in the last few years.
The loan on my home is an 80/20, both being originated by Suntrust, both being interest only and fixed for 5years only. I understand that when EMC Mortgage acquired the 20% loan from Suntrust, EMC had no idea of these latent problems. Since 2005, I have created no ownership in my home all I have paid is interest. However, Suntrust has offered me a loan modification of the 80% loan by converting it to a 40year fixed, principal and interest and also reduced the interest rate significantly. Suntrust did this independently without consulting EMC.
Currently, the principal balance on this loan is $37,750.00 (just as it was 4 years ago). The interest rate is fixed at a staggering 11.5%, until 2010 when it becomes adjustable (that is when things will really get interesting, when the rate begins to jump around). Currently, I cannot afford this loan as it stands and next year the rate could be even higher.
I psychologically prepared myself for another foreclosure and had given up on my home and fallen many months behind on my payments. When Suntrust mortgage offered me the loan modification, I realized there might be a possibility that I could keep my home.
However, at this point it all depends on EMC Mortgage. Therefore, in my last ditch attempt to keep my home; I would like to appeal to the business sense of EMC Mortgage:
If I cannot afford the total note on my home and it goes to foreclosure, even Suntrust Mortgage will not receive enough proceeds from a foreclosure sale to extinguish all obligations under the loan.
I understand that EMC can negotiate with Suntrust for a portion of the proceeds, but realistically speaking, it is unlikely that Suntrust, sitting at a deficit, will fork over to EMC, any portion of whatever proceeds they recover from a foreclosure sale.
I am not asking for a principal reduction I knew how much the house cost when I walked up to it (it was my first time and I simply had no idea that the terms of a mortgage could come back and bite you so hard). 11.5% is so high that it hurts even to think about it, and it is not even a fixed rate! Additionally, it is interest only, so over the last 4 years I have created zero ownership in my home.
What I am asking is for EMC to make this loan affordable to me over the long term and in return, EMC will never have to do any more maintenance or collection calls on this loan. This would be a win-win situation for both EMC and me I can afford to keep my house and create ownership in it, and EMC will receive my monthly payments with no problems or interruptions. If this win-win situation seems like a worthwhile objective, then permit me to request that EMC do the following in the furtherance of this objective:
1.Please provide me with a significantly lower interest rate to make this mortgage affordable.
2.Please provide me with a fixed interest rate for the whole duration of this mortgage.
3.Please change the terms of my mortgage from interest only to principal and interest so that I can create ownership in my home with every payment I make.
4.Please extend the term of the loan to 40years, like Suntrust did, in order to make the payment affordable over the long term.
In conclusion I would like to keep my primary residence if the loan can be modified to make the payment affordable over the long term. Given a good, plain simple loan I will be able to afford to keep the house. I am appealing to the business sense of EMC to create a situation that will be beneficial to both the mortgagor and the mortgagee.