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Home Loan Modification Countrywide

January 5, 2008

in Community Blog

home loan modification countrywide
Countrywide loan modification?

I’ll make this quick. Do to some circumstances my wife and I fell behind on our mortgage. Our lender is countrywide. We applied for a loan modification. How often do these actually materialize into something decent? We have a 100% financed sub-prime loan with an 80/20 ARM and prepayment penalty. (A piece of trash loan I know, we know better now) Countrywide wants more financial info for our case. We are still struggling with the payments. We are just starting to get traction again financially but are in serious delinquency. There is no equity , this a Florida home, we have some cash but not enough to bring it current. Advice anyone? Please don’t lecture on the economy or the “housing crisis.” This is in regards to a mortgage loan modification.

I’ll get straight to the point.
You asked how often do these actually materialize into something decent?
well, that depends.
here is how a loan mod works:

let’s say your mortgage is 1000 per month.
and let’s also say you are 6 months behind.
that means you are behind $6000. with me so far?

okay, the way a loan mod works is this:

countrywide will take that $6000 that you owe and divide it up over the next 6-12 months and ADD it to the mortgage you already have. so let’s look at the most favorable example:

if they split it up over the next 12 months (which is all based on approval), that means your loan mod payment is $500. make sense? $6000 divided by 12 months is $500. okay?

here’s the kicker: that’s on TOP of your existing mortgage, because you still owe that.

so what will happen is you will end up paying your regular payment of $1000, PLUS the $500 for the next 12 months.
make sense?

a couple of statistics that may interest you:

89% of people who sign up for a loan mod never make their first payment. yep, you read that right. the reason is fairly obvious. if it was difficult to make your original payment, increasing that payment only makes it more difficult, doesn’t it?

the reason a lender is willing to do it is for that 11% of people. you see, foreclosure is expensive for banks. it costs them on average more than $30,000 per house after you account for attorney fees, holding costs, taxes, insurance, etc. they want to avoid it and squeeze every bit of money out of you before they do so.

hope this helps. if you have any questions, email me.

oh, by the way, you can check this out to see what other options you have:

squidoo.com/youstopforeclosurenow

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