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Posted: Fri May 11, 2007 4:50 pm Subject: Mortgage Question

A guy from work was talking to me about being behind on his mortgage and he knew that I had been (and am still 1 payment) and he was filling out the form they sent him to see if he could get some help and they ask about his assets. Cash he said he had $20 in his pocket, Cking and Savings, he said he has maybe $40 in one but looks like he has alot right now in his cking because he just got paid, but with car payments, etc, he said he goes quick. Now my question, because I did not know how to answer him, they ask about retirement funds (401K, IRA, etc). He is concerned that when he puts that down that they will count that as income and try to make him use that money to pay things. It comes out of his check and he said he already has 2 loans out against his 401K and cannot take any more and is paying it back through payroll deduction, so what do they do when you put down your 401K information? Will they do this? I do not know what to tell him.

Posted: Fri May 11, 2007 4:54 pm Subject:

Oh, and the other thing he was concerned about was when he was filling out the budget thing, how will it look if he is putting out more then he is bringing in? He said he got a letter of intent to foreclose and he is trying to get it taken care of. He said he does not have $3700 all at one time. He ran into some hard times, lost his mom and had to pay for the funeral (only child), dad had already passed away.

He also has a wife and 3 kids. His middle child has MS, so that also puts a bit of a burden. Wife does some substitute teaching, but that is about it.

(edited to add info about family)

Posted: Fri May 11, 2007 7:44 pm Subject:

I don't think they would take the 401k into consideration, especially since he can't take out any more money from it. I think what they are looking for is actual proof that he has a reason to be behind and does not have the money to catch it up immediately. Obviously there are not going to be any red flags like he has $30,000 in a savings account that he doesn't want to touch. We had to do a form like this one time to get some kind of extension and they wanted to know all our bills etc. If it looks like he is putting out more than he is bringing in, well,no wonder he is behind and how could they argue with that? I think this form is a formality just so he can get some help. It sounds like his circumstances more than indicates an emergency situation that he needs a little time with to get back on his feet. I hope this info helps and I hope I am right but maybe someone else will come along with more info. I wish him the best of luck!!!

Posted: Sun May 13, 2007 8:12 am Subject:

My husband and I had to do this last year when we were behind on our mortgage payments and starting the negotiations on a forebearance agreement. This helped us get caught up. I don't think they asked about 401 (k) though. I would suggest that he is honest about it in case this matter does go to court. I remember we had to list things like car payments, credit cards, etc. We also had about half the money to put down on the forebearance agreement though. He may also want to contact HUD because they help work out payment plans withs mortgage companies. We had trouble with our mortgage company again earlier this year. They tried to say we were late on our last payment in December on our forebearance agreement. We were not. They even turned it over to the same lawyer's office. I was able to work out everything with the lawyer's office and prove that we were current on our mortgage. It was a pain in the butt though. With foreclosures at an all time high, it is scarey business right now. Our apr is going to keep going up but our mother-in-law told us she would co-sign on a refinance through her bank if it gets approved. Hubby and her are going to the bank this week to see what can be worked out. It would be a lot less interest which would be a big help financially to us. Plus, I wouldn't mind telling our current mortgage company to kiss off.

Posted: Mon May 14, 2007 7:07 am Subject:

I told him what to put down everything. I will also tell hiim to call HUD. I will try to find the number for him for the next time he comes into the office. Poor guy, he is so scared and really doesn't know which end it up.

Posted: Mon May 14, 2007 7:10 am Subject:

I hope things work out ok for your friend...I am trying to find some assistance as well for when I go on my unpaid maternity leave to help with rent and gas and electric but so far I have been turned down for everything!

Posted: Mon May 14, 2007 7:19 am Subject:

Thanks Leah. I hope so too. He is a very nice young man and to have to go through ALL this at one time is rough. I don't usually get too involved with co-workers and their personal stuff, but he is such a sweetie and always helpful.

Section 8 will not help you with rent? I know they base things on income, so not sure where you fall as far as that goes. Can you get WIC, which may help free up some money. Have you talked to Social Services to see if they can tell you where you might get some help?

Posted: Mon May 14, 2007 7:23 am Subject:

The only thing I qualified for was WIC and I barely got that...If I had made 84 dollars more last year I wouldnt have....what a joke...and Food stamps laughed at me(she basically told me if I really needed the help I should quit my decent paying job and get a job at a fast food joint..WTH??) and Community Action pretty much told me I shouldn't need help. So, I have basically come to the conclusion that if I want help, I gotta go work at McDonalds..Of course they all told me that if I already had a couple of kids the guidelines would be more favorable to me...LOL

Posted: Mon May 14, 2007 7:28 am Subject:

That is crappy . . . . How do they expect you to pay the bills when you can't work??

Posted: Mon May 14, 2007 7:29 am Subject:

I don't understand the programs too much or how they base some of their stuff. I know when I was a single parent, I made $10 more a month than what was allowed for food stamps yet I was able to get WIC for a short time. How that was, I don't know, but what use to really tick me off was here I was stuggling and could not get the assistance and I saw people driving around in new cars, eating steak and such every night and on WIC, Food Stamps, and house assistance. How the heck did they get all that and be driving brand new vehicles?!?

Posted: Mon May 14, 2007 7:33 am Subject:

Probably cheating the system . . . . .

Posted: Mon May 14, 2007 7:36 am Subject:

AMEN!

Posted: Mon May 14, 2007 7:45 am Subject:

401k have a hardship clause that he can take to use for housing and or medical. I am guessing this is what they are trying to find out.
this has nothing to do with the 2 loans that he has already taken. this woudl be above and beyond the loans..

Posted: Mon May 14, 2007 9:38 am Subject:

So they might be able to make him pretty much drain his 401K to get caught up? I don't know how much he has in his account, but I know he has gotten a couple of loans for like $1000 each and they are payroll deducted. I would not think that he had very much in his account considering he really hasn't had the 401K for too awful long.

Posted: Mon May 14, 2007 9:43 am Subject:

A hardship loan is figured differently..
the amount of the loans are not taken into consideration.
I had to take one and I also had 2 loans out..
He will be taxed on the hardship because you dont pay it back..

Posted: Mon May 14, 2007 9:43 am Subject:

That would suck for him! That is his retirement!

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