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When Should I Stop Trying To Modify My Loan With Wells Fargo?

by Tim
(Patchogue, NY)

I have been in two trial loan modification periods so far trying to get a mortgage modification from Wells Fargo.

Mad medical problems from me and my wife Iver the last year has put us in a bad money spot. Wells Fargo *****, my wife's health problems have gotten worse because of the stress.

I just don't want to be told one day "You owe us $10 thousand or we will foreclose on you."

What do you think?

Mortgage Loan Modification Answer:

by Loan Modification Expert - Dan North


If you are asking me if you should give up, my first answer is no, you should never stop fighting foreclosure, if you want to keep your home.

If you are asking what your chances are and what are your options then I would need more information to make anything but an un-informed opinion that may not apply to your situation.

(If you want specific recommendations complete the on-line Pre-Qualify for FasTrac Hardship Loan Modification Form with that information I can better evaluate your situation and will also get a free Attorney and CPA side check.)

Since you have been in two trial loan modification periods already did Wells Fargo give you any explanation why you were not granted a permanent modification?

All that Wells Fargo is going to look at is whether it costs them more to modify your loan or foreclose. It is totally a financial decision for them. There are several factors that make a big difference in what they will decide:

  • How much equity if any you have in your home


  • Is your mortgage upside down and by how much?


  • Are you behind in payments and how much?


  • Do you have mortgage insurance and can the lender get a partial claim from the mortgage insurance company to keep you in your home?


  • Wells Fargo will evaluate if you can afford the modified payment or are you likely to re-default.


  • Your local housing market


    • Are there a lot of foreclosures and short sales in your housing market?


    • Are any of the houses in your market selling and for how much?


    • Does Wells Fargo already own a lot of foreclosed homes in your market?


To decide what your options are you have to evaluate whether you can afford to stay in your home even after a loan modification.

  • Can you afford the payments at 31% of your gross income? Do you need to have payments below 31% of your gross income?


  • Is there likely to be additional future medical expenses that make the modified loan un-affordable?


  • Will your income be changing over the next year or years and by how much?


  • If we have to short sell or give the home back to the lender what will it cost to rent or lease a new home or apartment?


  • Don't forget to consider the tax write off you get on interest, you will not get that if you rent or lease.


  • Do you really need to be working out an exit strategy so you can get out of your house with no debt?


There are a lot of factors to consider but the bottom line is what can you afford and will the lender make that modification? If not, then you need to look at what your exit strategy will be and start working on that.

By all means go ahead and try to modify your mortgage with Wells Fargo and if that can not be worked out then go to short sale and as last resort Deed In Lieu of Trust where you voluntarily give your home back to Wells Fargo in exchange for canceling your debt. If even that fails then stay in your home as long as possible and don't make it easy for the bank to get you out. Wells Fargo may come back and make you some offer to leave that will help out in some way.


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Comments for
When Should I Stop Trying To Modify My Loan With Wells Fargo?

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starstarstarstarstar 		Wells Fargo Said To Miss Payments And Then Foreclose
by: Anonymous

I did a loan modification with wells fargo. I got burnt, they went up on my payments and set me up on an in-house program. Wells Fargo is a rip-off.

I was current on my payments when they sent me a letter saying I was able to get on the hamp program. Then came back and said you are current but if you missed some payments we can set you up.

What a lie! My home went into foreclosure so they offered me some in house stuff and raised the monthly payments. I have made three payments and the county still has my house pending foreclosure.

What's up with that I had a new loan and current and lose my house what the hell is up with that
Rating
starstarstarstarstar 		Loan Modification With Principal Reduction - Imputed Income And Claiming Loss
by: Todd

I own two lots that I purchased on balloon loans three years ago with another co-signer. He went bankrupt last year. I continued to make payments and tried to extend the loans but the bank will not refinance under terms that I can afford (they offered a 16% refinance)

If I can get the bank to modify the loan amounts to appraised value (approx 50% of the loan amounts) I could pay off one loan and refinance the other, barely, by gutting all other resources. But, my lawyers seems to think that this would generate an IRS claim of "imputed income" and I would owe tax on a non-existent $100,000 or so.

Is this true? Also, would there be a write-off for the loss of value on the property that I could claim to offset the tax on the imputed income?

Thanks

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