Hello Again. Welcome to my Answer.

Your first step is to contact Wells Fargo to see what the status of waiving tat balloon payment is, and why,if you have made the payments as required in the repayment agreement, have thy sent the loan for foreclosure? Also contact the law firm that sent the foreclosure notice and ask if they have any information regarding whether or not the balloon payment was waived, because you don't know whether or not it was waived and you are suddenly facing foreclosure. I suspect that you may get a huge run-around with both wells fargo and the law firm, so do not delay if, after a day or two, you are unable to get a straight answer from them (my own brother has been going through a similar frustrating situation with Wells Fargo and we are working on keeping him out of foreclosure and getting a loan modification for him, so I know how frustrating it can be).

Because you have been served with a foreclosure notice, when you contact the lender's lawyer at the law office that sent you that notice also ask them if they have their own in-house "loss mitigation" department, and if so, because you have experienced a severe financial hardship, would Wells Fargo consider working with you to get a loan modification as opposed to a repayment plan (you want the loan modification in your situation because it will help you out for a few years instead of a few months)? Many law firms specializing in foreclosure have opened up these in-house modification/refinance departments and they may be able to help you -- who knows, it is worth a shot. If that does not seem to be getting you anywhere OR, the answer is NO, keep reading, because there may be other solutions.....

I have many clients attempting to get loan modifications from their lenders at this time, particularly with the new guidelines issued in April from the Obama Administration (the "Making Home Affordable" Plans, among others). Unfortunately, the one plan/program announced by the Obama Administration which sets forth the guidelines to lenders and borrowers for loan MODIFICATIONS (as opposed to loan refinancings) is simply a set of guidelines -- it is not a LAW. It will be very difficult for you to stop the foreclosure on a home because the lender has refused to modify your mortgage --- the lender simply is not required to modify your mortgage. At the end of May,lenders began foreclosing on properties again, after several months of a halt to foreclosures at the request of the Obama Administration. You may be able to slow down the foreclosure process by hiring an attorney to file a Chapter 13 bankruptcy action for you, and that might buy you some more time to either get them to modify the mortgage or perhaps your financial situation might improve at that time. If you are in immediate danger of foreclosure, you need to speak with a local attorney as soon as possible -- that attorney may be able to file something quickly to at least buy you some time while you continue to pressure Wells fargo to modify your loan. You should also speak with a HUD housing counselor immediately -- you can get the telephone number at http://www.makinghomeaffordable.gov. The HUD counselors can help you gather the necessary information to apply for a LOAN MODIFICATION (as opposed to a payment plan, which, in times of financial hardship are just bogus and unworkable).

Once you get the time needed to try to get a modification (HUD and/or the foreclosure attorney should be able to buy you that time) go to http://www.makinghomeaffordable.gov and be sure that you have gathered up and submitted all of the information required by the lenders for consideration for a loan modification. The HUD counselors should be able to help you with gathering the information also. Make sure that everything you have been submitting to Wells Fargo meets the guidelines and, if missing anything, gather it together. Once all paperwork is together, HUD or a local agency of your choosing can help to walk you through the process of applying for a loan modification so that Wells Fargo will have a "complete" application file. After that, the process can take several months, and then they will probably request your income information all over again, because the original stuff will then be 2 months old (very frustrating, I know).

Keep a LOG of every telephone call, every fax, and a copy of everything you send to Wells Fargo and all of your dealings with any agency or agencies you choose to help you. You must be PERSISTENT with them -- call them every week and ask if they need anything else for your application, at the top of every page you fax or mail, put your name, loan number and a statement such as "REQUEST FOR MAKING HOME AFFORDABLE MORTGAGE MODIFICATION", make it clear on the telephone and in writing that you cannot afford a refinance or repayment plan and you want to be considered for a MODIFICATION. Even with all of this, you may not qualify for a modification because some lenders are refusing to accept things such as temporary work or unemployment compensation as the "income" needed to show that you can pay a reduced mortgage amount going forward. they just might completely ignore you also and attempt to proceed with the foreclosure (remember, the making home affordable plan is not a law), which is where the bankruptcy lawyer will come in handy. However, if they do ignore you and you must resort to the bankruptcy attorney, you should make your HUD counselor aware of this -- they are interesting in knowing which lenders are giving consumers the most difficult time and are reporting the lenders actions back to the Trasury Dept (due to the bailout money that many of them have been given).

Be persistent (I know it is aggravating) and it may pay off for you in the long run. Consult with HUD or a local foreclosure prevention agency immediately and work on steps to submit appropriate information. If you do not have time and the lender's lawyer will not or cannot assist you for a modification, you must consult with an attorney if you truly want to save your home (these days, many people are simply walking away). If they refuse to modify the mortgage, you can still gain some time in a Chapter 13 filing, and if your financial picture improves, you may be able to save your home by that time.

I am sorry that you are in this situation, but you are not completely alone. I get this question at least twice a day on this website (and the other legal experts are getting it a few times a day each also), and it just shows me how bad the economy really is and how insensitive the lending community is being about it. Good Luck.

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