My husband was unemployed for 2.5 years due to medical issues. We exhausted our savings staying on top of the bills.
In aug, 2012 he did receive a job, but is underemployed and the combination of our two paychecks are barely getting us by.
We have an 80-20 loan on our house (from 2004) and our current 80% mortgage company is PennyMac.
I have tried numerous times to get a modification or reduction in payments, or even just a little forbearance until we could get back on our feet, but was denied all assistance.
In September of 2012, we fell behind on our payments, and have been 2 months behind since then.
We have received letters of Default from both companies (Ocwen is the second mortgage holder).
In Feb of 2013 I was able to get caught up on all principle payments due to our tax return, but we still have the late fees and extra charges they tacked on for being behind( valuation payments, certification letter charges, etc).
Now, however, we are finding ourselves behind again due to unexpected medical issue with my husband again. I can’t rely on constant paychecks.
We are wanting to do something to lower our monthly mortgage payments which are currently a total of 1,145 for both loans on a 170,000 home.
My husband looked online for some assistance and apparently filled out a small interest form. He was then contacted by someone at Consumer Attorneys Service out of Florida, with Brenda McCann as the head legal person.
After speaking with someone for almost an hour, they sent us a “contract” by email that I was to electronically sign right then, and provide our bank info so they could debit the $1700 retainer fee and set up a monthly legal fee of $700 a month after that until they resolved our issue.
They did say they could not guarantee any result which I do understand, but it scares me to think about using these people. They did provide, albeit over the phone (and there are a couple statements online) some of the positive outcomes they were able to do for others. But they also have a C- rating on BBB.
I have done a little searching online on PennyMac and it is very disheartening. Seems Pennymac doesn’t like to negotiate loans. The date for the initial attorney retainer debit has not happened yet (4-12-2013), so we have not paid them anything. Im still trying to figure out if using a lawyer to battle Pennymac is the way to go.
They seem to think from the preliminary info we gave them that they would indeed be able to help us, but again no guarantee. Even on the contract I signed (hastily I might add) they say you shouldn’t have to pay a third party to get a loan modification. Another thing that kind of scares me is there is a section that says we might be responsible for other fees that may incur.
My question is, do I try again to deal with Pennymac myself knowing that very very few if any have had any luck, or do I trust this firm to go to bat for me without any guarantee of any kind of loan reduction. Time is running out because I am again one month behind on paying the mortgage. I don’t want to foreclose. thanks.
You should first try working with your lender directly and contacting a free HUD Housing Counselor.
In fact this is what Pennymac says:
There are for-profit companies you can hire to represent you in this process, but often the same results can be achieved by contacting your lender yourself. And wouldn’t you rather put your money toward your home investment than spend potentially thousands of dollars in fees to an outside firm? In addition to saving money, working directly with your lender or through a free housing counselor can help avoid scams.
Remember, no lender is required to modify any mortgage they don’t want to.
Also, if you are getting back huge tax refunds it means you are having too much withheld from your paychecks. Adjust your withholding to break even and put the money back into your pockets each month where you need it to get by.
From what you’ve shared it seems like the issue is bigger than just modifying the mortgage. It sounds like your larger financial situation is out of balance and needs addressing.
I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth, How Do I Get Out of Debt Quickly? Change Your Mindset, and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.
Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.
Please post your responses and follow-up messages to me on this in the comments section below.