In February, he sent letters to his primary mortgage company, Aurora Loan Services, and the holder of his second mortgage, Washington Mutual, saying he would stop paying. Within a few weeks, WaMu sent him a package offering to lower the mortgage rate to 5% from 11 1/8%. (WaMu was taken over by JPMorgan Chase last year.)
Aurora was a tougher nut to crack, but it eventually agreed to lower his monthly payment to $1,400 from $2,000. He is currently in a three-month trial period, and if he makes all his payments, his modification will become permanent in the fall.
"Everything that they've done has been as advertised," said Carlson, who wants to stay in his home though it's lost nearly half its value since he bought it three years ago. "I'm much more confident about not losing the house."
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