Mortgage Modification Offer @ 44% debt to income ratio

[ChefV]

What is the name of your state (only U.S. law)? PA

I have been going through an arduous process of applying for a home mortgage modification since my home is under water and cannot afford my current monthly payments. The resulting mortgage modification offer to stay in my home is actually higher than my original mortgage of about $15. Looking at my application paperwork, when you evaluate my declared income against their offer, that puts the debt to income ratio of my mortgage, taxes and insurance at 44.4%, which I think is higher than acceptable loan ratios. My question is, is this potentially a predatory lender and if so, do I have any options to stay in my home without being forced into payments I cannot afford? Any advice would be immeasurably appreciated.

 

[FlyingRon]

How can we possibly tell given the scant details? Why would you agree to a mortgage with worse terms than your existing one?
You don't close on the new mortgage, you just keep paying the old one.

 

[ChefV]

My apologies, I didn't want to overburden with too many details. The long story short is my wife was the primary breadwinner as I was helping her build her business over the course of several years. Upon completion of my work on her business, she decided to leave. That left me in a position with no immediate income and as a result, could not pay my mortgage. I immediately called my lender and explained the situation and they said the only way to apply for a modification was if I met the imminent default requirement being divorce, disability or failure to make 3 consecutive monthly payments. Since my divorce was not final, and I could not make my payments, I qualified under the latter requirement 3 months later. The modification process has taken over a year to complete and as such, I have not made mortgage payments during that time. Once the modification process was tentatively approved, they said I needed to make 3 months of "trial payments" to determine my eligibility to finalize the modification. These trial payments were also higher than my original payment amount and when I questioned the lender, they stated that the trial payments were only that and did not reflect what my final modified payment would be. So, not having any other option, I made the payments for 3 months as required. The end result is the final modification offer that is higher than my original payment and the outstanding unpaid interest from the last year is being tacked onto my mortgage balance.

I hope this provides a clearer picture.

 

[HRZ]

WHat legal obligation does wife have to pay?

IF your ship is destined to sink, why try to keep it afloat at great personal cost ?

 

[ChefV]

My wife has no obligation to pay, the house is entirely in my name.

The reality is that because I have not paid my mortgage, my credit is a mess and if I do not sign this modification, they will foreclose on the house, effectively laving me with no place to live. With my credit now the way it is, I cannot buy something else, and if any landlord runs my credit report, which most do, I'm screwed there as well. Seems to me like they've now put me in a situation that I either sign the modification, or become homeless and I would like to know if that is legal.

 

[xylene]

Underwriting your risky loan does not equal predatory lending.

You need to focus on your income.

 

[HRZ]

ABsent finding a decent pay job and or two well paying tenants if legal, you best have lifejacket ready ....

 

[LostInCleveland]

Mortgage, taxes and insurance are only supposed to add up to 28% of your income. You either need roommates, a better job or to move and send a jingle mail.