11-21-11

From NG:

Dear James,

My daughter was here this evening  and we were discussing how our loan modification is going right now, explained to her how mediation works. She is so worried that we’ll lose the house. I told her not to worry and not to lose hope because if the mediation fails then we’ll file Chapter 13.

She is so worried because she’s hoping that once this loan modification is all finalized she’ll move in with her husband and their 19-month old son. It’s better if they move in because our grandson wants to stay with us all the time.

It will be economical for them and for us because we’ll split the mortgage payments so Alex and I can start saving for our retirement.

I explained to her that Chapter 13 won’t change the existing term (30 years interest only) of our loan and won’t reduce our principal balance, but we have 60 months ( 5 years) to pay the arrears in addition to our regular monthly mortgage payments.. Did I understand this correctly?

**Question on the Chapter 13: When we stopped paying for our mortgage in 2009 it was like $3,331 a month.. If we file for Chapter 13 are we going to pay that $3,331 plus arrears? The total arrears will be divided by 60 months, is that how it works? Since it will be a lot of money $3,333+ arrears, is the court going to reduce the payment we’re going to send to the trustee?

After 60 months that means we’ll just continue paying our regular payments to the bank?

At this point do you think it’s safe for my daughter to move in or wait a little while till after the mediation?

I don’t want to rush their moving in but at the same time they are only wasting their money on their lease to own house, they’re paying $2,100 a month.. They are due for signing (another 2 years) again next month.

Thank you so much, we are very grateful for your help, it gives us peace of mind.

Sincerely,

NG

***

Dear NG:

I never make guarantees, but I would say that your chances of keeping your house are very strong.

The fact that we can force mediation means that foreclosure is delayed six months or a year. That opens a big window during which settlement can be negotiated.

The investor will be better off with modification, so the investor is our ally against the greedy servicer, who makes more money if the servicer forecloses. Mediation gives us time to identify who the investor is and to reason with him.

Also, instead of dealing with underlings, I will be dealing with attorneys.

Sincerely,

James Robert Deal , Attorney

***

The situation here is that NG has a steady income and can pay payments which will retire the loan over 40 years. NG qualifies.

NG is dealing with Wells Fargo, servicer for the XYZ mortgage backed security pooled fund.Wells says it cannot modify the loan because the pooling and servicing agreement does not allow it. I want to see that pooling and servicing agreement.

I am not convince that Wells Fargo has even talked with the representative of the XYZ fund. By law Wells must tell us who the investor is and how to contact him or her.

Washington’s new law requiring mediation before foreclosure, will save borrowers’ homes and save investors a lot of money. It will slightly reduce servicer income, but servicers should negotiated their pooling and servicing contracts better.

JR