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Best time to ask for loan mod???

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J

Jeanne1976

Junior Member
What is the name of your state (only U.S. law)? Washington DC

Thank you in advance for reviewing my question.

I lost a good paying job and can no longer afford my mortgage payment. I am slowly recovering but my income is only about 60% of what it used to be. I have enough in savings to make my March, April and May payments. I'll default in June. I'll need a loan mod to keep the house.

My question is: Am I in a better position to get a mod while I'm current (and remain current, at least until June), or am I in a better position to get a mod if I default immediately. In which situation is the bank more likley to give a mod? For those in the industry, you probably already know that there are no foreclosures in Washington, DC. So there is no chance of losing the house in the near future even if I default immediately. But I don't want to start a snowball effect that I can't get out of by defaulting unnecessarily. Obviously the lawmakers will get their act together at some point such that foreclosures are again a reality.
 


Zigner

Zigner

Senior Member, Non-Attorney
I would suggest that you begin communicating with your bank about your situation.
 
J

Jeanne1976

Junior Member
With all due respect, that was not responsive to my question at all. Of course I need to begin communicating with my bank in order to get a mod. What kind of response is that? Do you think I expected my bank to just offer a mod out of the blue?

Now that we've gotten past the fact that I begin the process by communicating with my bank, can we move on to my question?

Am I in a better position to negotiate a mod if I have defaulted or if I am current?
 
J

Jeanne1976

Junior Member
Really? Does it make sense to ask the opposing party in a negotiation for negotiating advice? Obviously it's in the bank's best interests for me to remain current for as long as possible. Is there any possibility that the bank would tell me to save my money and default immediately, even if it actually is the best strategy?

Sir, I appreciate that you took the time to respond a couple of times. Thank you. But you clearly lack experience in this area. Telling me to ask the bank for advice as to whether to strategically default is bad advice.

Does somebody experienced with loan mods have any thoughts?
 
>Charlotte<

>Charlotte<

Lurker
Jeanne1976 said:
Does it make sense to ask the opposing party in a negotiation for negotiating advice?
Click to expand...

You wouldn't be asking the bank for advice. You'd be bringing your problem to the bank's attention in order to find a way to solve it, and the sooner you do that, the better. The bank is not your enemy here. You both have an interest in finding a solution to your problem, but there's no sense in treating this like a poker game and keeping your cards so close to your vest. They don't want your house. They don't want to foreclose. If there is any solution that will enable you to not default on the loan, they'll be more than happy to start the process. You need to find out what options the bank has for helping you, and in order to do that you need to talk to them. Their response is not going to be "Yay! All we have to do is wait a couple of months for this customer to default, and then we get to do another foreclosure! Beer and skittles for everyone!". This isn't a negotiation. It's a problem in need of a solution. If there is a solution the bank will help you find it, whether it be a modification or perhaps a deferment.

Zigner's advice to you is good advice. If your attitude here is any indication of how you treat people who are only trying to help you, you should probably try to not do that when you call the bank.
 
J

Jeanne1976

Junior Member
Am I in the Twilight Zone?

Yes, I will bring my problem to the bank's attention. Clearly that is the only way a mod could ever work. That is not the issue. I did not ask whether I should or shouldn't bring my problem to the bank's attention. Why didn't I ask that? Because I already know that I must.

Again, my question is whether I am in a stronger position if I default first or remain current. And, once more, I am not asking whether or not I should inform my bank of my problem. Is that clear yet? I will inform my bank. I am not asking if I should inform my bank.

Just in case you missed it. My question is, for purposes of a loan mod, whether it's best to default first, or whether it's best to remain current.

And again: I. Am. Not. Asking. If. I. Should. Tell. My. Bank. About. My. Problem.

Obviously I've come to the wrong place for advice. But at least I got a laugh. If I ever wonder whether to inform my bank about something, I'll be sure to ask here first!
 
S

Sgt. Pepper

Member
The national banks will often not give a borrower the time of day until after the borrower defaults. The reason is that most banks are dealing with so many defaults, they don't have the resources to also deal with people who are current but who may default in 3-4 months. From the bank's perspective, you're not a problem yet.

But if you're dealing with a small local bank (or credit union), they may be willing to deal with you immediately, and they may take into account your willingness to remain current for as long as possible.

Like you mentioned, there aren't really any foreclosures in DC, so you won't lose your house anytime soon no matter what you do.
 
TheGeekess

TheGeekess

Keeper of the Kraken
Jeanne1976 said:
Am I in the Twilight Zone?

Yes, I will bring my problem to the bank's attention. Clearly that is the only way a mod could ever work. That is not the issue. I did not ask whether I should or shouldn't bring my problem to the bank's attention. Why didn't I ask that? Because I already know that I must.

Again, my question is whether I am in a stronger position if I default first or remain current. And, once more, I am not asking whether or not I should inform my bank of my problem. Is that clear yet? I will inform my bank. I am not asking if I should inform my bank.

Just in case you missed it. My question is, for purposes of a loan mod, whether it's best to default first, or whether it's best to remain current.

And again: I. Am. Not. Asking. If. I. Should. Tell. My. Bank. About. My. Problem.

Obviously I've come to the wrong place for advice. But at least I got a laugh. If I ever wonder whether to inform my bank about something, I'll be sure to ask here first!
Click to expand...

You need a financial advice board, not a legal board. :cool:
 
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