Mortgage Modification – Bankruptcy – Creative Financing

I have found GMAC to be reasonable to work with in some cases, very inflexible in others.

In one case I was able to negotiate a $10,000 payoff on a $120,000 second mortgage. This was an underwater property, with little equity available to secure the second mortgage.

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Another case did not go so well. The client came to me with only a few weeks remaining before foreclosure. I submitted a complete package, however, GMAC refused to call off the foreclosure until the lender gave its approval. The foreclosure date arrived and GMAC had still not agreed to extend the foreclosure date. To save the property I put the client into Chapter 13 bankruptcy. A week later the client decided the property was so far underwater that he just wanted to give up. So I canceled the Chapter 13, the client made no payments, and GMAC foreclosed.

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VZ is a hardwood floor layer and general contractor. His business tanked when the Great Recession set in. He got behind on his home mortgage.  Payments were high at 7.8%. His income was a little too high for him to qualify for the Making Home Affordable program, however, I was able to work out an in-house modification at 4.5%.

As the months have gone by, all the lenders have learned the rules of the road and are behaving more reasonably, GMAC included.