Mortgage Question

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)

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!!!

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.

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.

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!

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?

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

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

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?!?

Probably cheating the system . . . . .

AMEN!

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..

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.

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..

That would suck for him! That is his retirement!

That would save his house..
so I guess it will depend on what is more important to him

That is true but I was hoping there was another way for him to get help!

I just don't know how much he has in his 401K that it would even amount to too much. I gave him our home office's number so he can call and see what he has, but he said he really didn't think it was very much. I am keeping my fingers crossed for him.

Do you know what kind of information he would need to get the hardship loan? Why would you not pay it back? You couldn't pay it back like your other loans?

because a Hardship means you NEED to withdraw. it is just handled differntly then a loan. what he needs is a letter from the Mortgage company with the amount he needs to pay.. ( sometimes the admin on the 401k wont ask for any proof somethimes they will)
Every admin on a 401k is different and he will need to contact them or the 401k company ( where the 401k account is ) they can tell him the amount ava to him for a hardship loan.

sorry i call it a loan but it is not it is a withdrwal..
and again maybe your company will allow a pay back most dont but it is up to the admin on the account

I will pass this on tomorrow when I go back to work. I am sure he will be in sometime tomorrow.

Keep your fingers crossed! Our company does do the hardship things and I helped him fill out the application and have sent it to our HR office in SC. Now we just have to wait for them to review it and see if he qualifies. He does have to bring me a copy of his letter is so we can send that too. He was practically in tears this morning when he came in and I told him what I had found out. He brought me in a small vase with a couple of flowers in it. Also just got a call from his wife thanking me for my help, so I pass the thanks on to you guys for your help. We won't know anything until tomorrow, so will let you all know.

Just an update here. He applied for the hardship loan and everything looked good, but then the 401K people called and said he letter did not say they were foreclosing, it was an intent to foreclose and something about the wording in the letter. Not sure what they are talking about and he is asking me what he should do as far as that goes. He asked me if he should talk to the mortgage company and ask them for another letter stating they are going to foreclose or what he should do. He said he was going to make a payment next week and that would take him down some, but not enough. He was also telling me that the budget thing they said he could fill out wants his tax records and he said that made him look like he had money, but he doesn't because of what he puts out and not only that, he said it could take up to 30 days before he know anything. I don't know what to tell this kid. I feel so bad but I am not sure if asking the mortgage company for another letter would be a wise idea. I told him I would try to find some answers and let him know something, but just not sure what to tell him.

He needs to get the letter and PUSH the 401k company if he has a check fed ex he could have it with in a few days.. BUT he has to push your company also to force through the hard ship loan. It is not really the 401k company YOUR admin really makes the call...
at least at the company I work at. but I called the 401k company and worked both sides of it..

Our company does not have a problem. What the 401K people said is it has something to do with the IRS and how they look at things, (I don't get to talk to these people, our home office does, so I just get the info passed to me). He just left my office and the mortgage company will not give him another letter until the property actually does go into foreclosure. I asked who he talked to there and he said whoever answered the phone and I told him to call again and ask for the account manager or whoever is allowed to make decisions. They told him to do the budget thing and send it in and then they will let him know within 30 days as to whether or not he qualifies for assistance. He said he is tempted to redo the letter himself and change the wording, but I told him he had to be careful so as not to get in any kind of trouble. I don't see why they wouldn't do the letter and get all their money within a week as to opposed to 30 days or better and then if he doesn't qualify, then what? Does not make any sense to me at all.

I would do what I had to in order to get the money.. It is his money...

Couldn't he possibly get in trouble with the IRS and the 401K company? How much do they check into this when they get the applications and letters? If I told him to do it, I would have to tell him away from work and not a representative of the company.

I agree with you 2nband about being away from work and not representing the company . . . . You need to cover yourself. If they somehow caught him he would not be getting the hardship loan. But I wouldn't tell him not to do it . . . . I would just say to do whatever you think is necessary . . . . . .

He will be taxed either way.. they will send a 1099 for the money.
I am getting ready to leave my job and I am cashing out of my 401k. I am being Taxed and will get a 1099 for my loans. I will have to pay taxes on both.. But again He should call the 401k and explain the loan that he is trying to avoid foreclosure My understanding is that if the money is for your Primary home that they cant refuse you it has to do with a NEW provision that was just passed if i can find it I will post but being that I am leaving I may have deleted it..

Another update here ~ The mortgage did send anther letter, but it still had the wording MAY LEAD TO FORECLOSURE and guess what, the 401K company will not accept this letter eithe because it says MAY... That is the only word that needed to be changed and he said the mortgage company does not have another one to send unless his home actually goes into foreclosure. I cannot believe that would not change that one word so they can get their money! He said he talked to one guy that told him, off the record, to go ahead an change the one word because he could not do anything else and could not send another letter, so I think this is what is going to happen. I don't know what the new laws and the IRS say or do about this or if the 401K people or the IRS check with the mortgage company to verify things, especially if it is on letterhead, so I am hoping that he doesn't get in trouble. I am not going to say a word to anyone at my company, that is for sure. I hate to see him loose his house and if this is what it takes, then this is what it takes. I just hope that he doesn't get in trouble for this. Anyone think he will? Keep your fingers crossed for him!!!

I am also going to help him with some other things, when I get my gift check for HOF, I am going to cash it and give it to him and his family. I know that my family could really use it with everything we have going on, but I think his family can use it more.

The IRS will only be notified of the money he gets.. the letter will stay at the 401k company this is just for their files. IRS could care less they just want the taxes BUT the 401k will with hold 20% for taxes so it shouldnt hurt to bad at the end of the year...
He just needs to claim the income
Good Luck to him

2nband - You are so sweet to help a co worker like this! He is very lucky to have you as a friend.

Thanks Goudah. I am doing this because I have seen this young man going through so much this past little bit and having a child with MS and he is trying so hard. Like I said, we could really use it and need it, but I really think he and his family need it more. Sometimes it is better to give than receive, but in this case, I am receiving and giving at the same time. I just can't wait to see his face when I give it to him. I know he is going to protest, but that is ok. I can be pretty insistant. :wink:

UPDATE! UPDATE! UPDATE!

He is getting his hardship loan!!! I am so happy for him. The check is going to be overnighted to our office and hopefully he will have it by Friday. Check should be processed tomorrow, paperwork is in finaly stages today. I am going to cover the $15 for the check to be overnighted. I am waiting for him to come into the office so I can give him the good news. I am so excited for him and I know what a big relief this is going to be and can't wait to give him the other $100 too. Now he will be able to concentrate on some of his other bills and medicines and not have to worry about loosing his house.

Way to go! I'm so happy for your friend!

Thanks Goudah ~ I have never seen a kid try so hard. Most of the people here, I don't know if I would try as hard as I did with this young man. It really bugs me that people want jobs, but don't want to work and then go out and blow all their money on booze and such and then complain they cannot pay their bills, but this guy puts his family first and trys so hard, so I didn't mind helping him out.

I did get to tell him about the check and he is ectatic (sp)! He just told me that they had to take their son, the one with MS to the doctors with a touch of pnemonia and they are having to buy antibiotics for him on top of what he is already getting. But I told him that at least now he can make his regular payments on his house and not have to worry about getting caught up. He just needs to stay current.