home affordability loan - how to protect ourselves???

[AnnaNova]

so a few weeks ago i posted a thread discussing application for home affordability loan. we had to fill out a ton of paperwork and our loan was sold twice (!!) since we started to process. now, finally we received a letter saying that we are gonna be put on a 'trial' period of 3 mo with the reduced payments and if we pay them in timely manner, we will be approved.
however, ive read a few articles about families that tried to take advantage of the program and it ruined their credit score and they started receiving foreclosure notices even though they were paying the amount the mortgage company told them to pay...
now im scared. we are really really struggling, and if this "modification" will do more harm then good, i dont really want to sign up for it.
does anyone have any tips on how to prevent disaster? my husband is taking out paperwork to a friend of ours tonight, he's the closest to a lawyer we can get without having to pay a fee, so we'll see what he says too
any advice will be highly appreciated
thank you

[Porcelain Interior]

Well I don't have much advice, but I was one of the people that got a home loan mod fairly easily. (Took LOTS of time and patience though.)

Make copies of everything they send you before you send things back, and aside from that I'm pretty sure they can't foreclose on you while you're making your trial payments, but I don't know how behind you are right now so it's hard to say. We weren't behind on payments when we started our process.

*And my credit is perfect. The mortgage company shouldn't be reporting you as delinquent if THEY'VE approved you into a modification. Ours didn't affect our credit at all.

[AnnaNova]

Originally Posted by Porcelain Interior

Well I don't have much advice, but I was one of the people that got a home loan mod fairly easily. (Took LOTS of time and patience though.)

Make copies of everything they send you before you send things back, and aside from that I'm pretty sure they can't foreclose on you while you're making your trial payments, but I don't know how behind you are right now so it's hard to say. We weren't behind on payments when we started our process.

*And my credit is perfect. The mortgage company shouldn't be reporting you as delinquent if THEY'VE approved you into a modification. Ours didn't affect our credit at all.

thats interesting... my husband talked to the mortgage company today, and they said that it WOULD affect our credit score, because we work with the federal govt, and before the modification is complete on their paperwork we are delinquent...
a friend of ours said that one way of preventing this from happening is to send the paperwork and a copy of your first trial pmt to the credit bureuos and they'd have to consider it a dispute and it shouldnt affect our credit too much.
i wonder how come that yours didnt affect your credit at all and we are warned in advance that ours for sure WILL...
im sort of scared... we have a couple of thousand dollars on our credit card and we cant just get rid of it right now, and if the credit gets slashed and the credit card rate skyrockets we'll be in big trouble!!!

[Porcelain Interior]

That's REALLY strange. From my understanding- and our mortgage is with GMAC, the only amount you're delinquent on is the difference between your regular payment and the modified one- but GMAC would have to report us as delinquent, which they didn't and wouldn't per their own words and that is ONLY during the 3 trial payments.

Basically you're still paying your mortgage and it doesn't go through the government, the mortgage company handles the payment even when you get the home loan mod through the government program.

We never received anything but a normal mortgage statement with the NEW payment amount. Ours was only like $80 less than the original payment, but nothing ever showed as delinquent even during our trial months.

I think your mortgage company is trying to persuade you not to persue a mod. I can't think of any other reason why they'd tell you this. Like I said you'll still be making payments TO the mortage company- not the government so it is entirely within their control to see to it that your mortgage payments are reflected as paid and NOT delinquent.

I just get the sense that someone is d*cking you around, excuse the terminology I can't think of a better phrase.

[AnnaNova]

something caught my eye in your post - maybe it didnt affect your credit score because they only cut yours by 80.00 (well, i dont actually know how much your mortgage was initially of course), our mortgage company (which after 2 times the mortgage has been sold is now ocwen) is cutting our payments by almost half...
could be of course that like you said they are d**king around with us, but then why even offer the modification and trial period, they could simply reject us from the start (which im sure is not hard to do), or bury us under a ton of paperwork, or resell our mortgage like two companies before them (which btw means you have to start the entire process all over again)...
i just cant wrap my mind around it ... and a big part of me is so scared for the credit score, mainly because of the credit cards... if we didnt have that, i wouldnt really care, but we cant afford for our rates to go up at all
thank you for your feedback, btw!!!