Never been late on a mortgage payment, but still getting foreclosed..?

My husband and I bought our first house at age 20. We were stupid, and got into an ARM. We have lived in our house for 2.5 years, and have never been late on a mortgage payment. Since I am a full time student living off my student loans our debt to income is crazy high. So we can't refinance. I even contacted our current mortgage holder (American's Servicing Company) and completed the paperwork for loan modification. However, they said our debt to income is too high and we were denied. I asked them, " So you would rather forclose on a property than help us keep our current rate when we have never been late on a payment?" I am not sure what my question is. I guess want to know if anyone else thinks that is crazy on ASC part?

Never been late on a mortgage payment, but still getting foreclosed..?paramount theater

you are right, it doesn't make sense on the banks part. However, no matter what you need to make the payments.

I would suggest getting a part time job. MANY students work and go to school full time. Or get a full time job and go to school part time.

Husband can also work more.

Never been late on a mortgage payment, but still getting foreclosed..?theatre opera theater

The bank cannot simply allow every ARM holder in danger of foreclosure to modify their existing loan agreements. Otherwise, why would they offer the products in the first place - if they are not going to enforce them?

Do you have any savings? The new payment amount is generally calculated using the unpaid principal balance + the new interest rate + over the remaining term in substantially equal payments.

As such, if you can make a large principal payment before your "change date", then the new payment amount COULD be lower - depending on how much higher your interest rate would be too. Just a suggestion.

Finally, keep trying to suggest a modification or even a short sale. Sometimes, lenders will not negotiate when you are current - which it sounds as though you are at present.

Best wishes
You are in a bad situation. I agree that you need to get a part-time job so that your debt ratio won't be so bad.

The new stimulus plan has programs for mortgage refinancing, so there may be some help there. Talk to your bank and ask what you have to do to make them willing to refi you. It really isn't in their best interests to foreclose on you. Talk to more than one person there. They usually have customer assistance people who are more flexible, and maybe you can get a loan modification.
Every bank has differetn qualifications for loans. It is great to talk to a broker because brokers have access to tons of banks and if there is a program available for you we will have it. Let me know if you have any questions or are interested in seeing some numbers. You can contact me at my email jreynosocfg@yahoo.com
You are putting bandaids dear on shotgun wounds.

You are going to rack up so much student loan debt that the job you have when you graduate won't even be enough to make the payments...do you realize that you can NEVER bankrupt a student loan?

You also exaggerated your question...the bank never told you they would foreclose, you threatened to stop making the payments, and that is a natural occurance, but they CANNOT foreclose RIGHT NOW.

I suggest you lay-off the student loans for now, get a part-time job, and kick some money toward the mortgage and student loans until you pay it down enough to go back and refinance on a fixed.

I know, it's not what you want to do, but you are too young to be ruining your credit.