Anyone trying to do a loan modification due to adj. interest rates?

I just started working with a company to negotiate with my lender to give me a fix rate and reduce my mortgage to what the property is now work. I bought it in Dec. 06 at $257K, now a bigger unit in my complex is selling for $90K.

I was wondering if anyone here has had any success with their lenders in modifying their mortgage.

Thanks, Amy

the modification was still not affordable for me. I ended up losing my home. I purchased it for 280K and it just sold for 160K.

Is that what you are hoping for?

Don

People are walking away from their homes left and right here and then the bank is stuck selling them for what they are worth now. So it make more sense to neogitate with the current owner to reduce the debt than to take the house back and then sell it at the same price the owner was asking it to be reduced too. I a normal market, lenders didn't mind taking the property back because they would just sell it for a profit, but now they are being flooded with properties they can't sell at all.

the seller that money, and tagged YOU to repay them.. There's no way they will just "eat" the loss..

People are not going to get "freebies". they will either trash their credit and walk away, declare bankruptcy, or pray that whoever has their mortgage will convert the original amount at a fixed rate..

what this company says they are negotiating for. I live in Southern California, and we have been hit very hard in the housing crisis. The state's website even has a page dedicated to giving advice on helping with negotiating with your lender. People are walking away from their homes left and right here and then the bank is stuck selling them for what they are worth now. So it make more sense to neogitate with the current owner to reduce the debt than to take the house back and then sell it at the same price the owner was asking it to be reduced too. I a normal market, lenders didn't mind taking the property back because they would just sell it for a profit, but now they are being flooded with properties they can sell at all.

They don't care if the place becomes rat infested and a meeting place for the local crackheads. You are still going to pay eventually. When they have to sell a house for less than the original mortgage the borrower (you) still end up responsible for the difference plus any other accrued costs.

Good luck but I don't think you are looking at this realistically.

Don

Make sure you understand any fees that the "company" might be charging, and that they disclosed that any "debt forgiveness" may incur a tax liability on your part. If you don't see those disclosure statements find a new company.

I'm finding that if you can even find who currently owns your mortgage, most of them are so buried in requests that if you aren't on the verge of foreclosure you are shuffled to the end of the line.

I am currently working on about 200 short sale/remediation cases right now, and it is very slow going.

They did disclose their fees, and they told me that if the property is my primary residence, and it is, I would not have a tax liability for the debt forgiveness.

So have you seen debt reduced on the amount of the mortgage?

In answer to the rest, each case is obviously different dependent on things like L/V ratios, credit and employment history, debt ratios and so forth.
I would check with a tax professional about the debt forgiveness.
We are seeing some mortgage balance reductions, there is at least one FHA program available that can reduce to 90% of the original.

Most important is to not leave the negations up to just the company you have retained! Keep on them and be very, very persistent with anyone you can find to be persistent with. As with most things you have to do a lot of the follow up yourself in order to make sure you don't get lost in the shuffle.

will not change. Maybe you'll get a better interest rate, but the $257K (assuming you borrowed the whole amount) will not change.

The value of the property has nothing to do now with the money you borrowed. Sucks, but it's true.

People are walking away from their homes left and right here and then the bank is stuck selling them for what they are worth now. So it make more sense to neogitate with the current owner to reduce the debt than to take the house back and then sell it at the same price the owner was asking it to be reduced too. In a normal market, lenders didn't mind taking the property back because they would just sell it for a profit, but now they are being flooded with properties they can sell at all.

but maybe you'll be the one to crack the tradition. People all over the country are walking away from their homes because they're now worth less than what they borrowed to buy them.

What you want is for the bank to forgive about 60% of your debt.

I cannot foresee that happening, but good luck.

asking them to reduce it to. They have so many properties they can't get rid of, it make sense to me and this is what the company is claiming they can do. But you think the bank would rather have the property back and reduce the debt? Why don't you think the mortgage company see it this way? It doesn't make sense for them to want the property back instead, but banks do have bean counters that might see things differently.

I mean, I have this Ferrari I bought last year for $500,000, but when I went to take it back to the dealer they would only give me $100,000 and change for it... :eyes:

they might want to do some negotiating. Check out ben_meyers response to me. He does this for a living and says it can be done but is difficult. Just pray for me!

Banks get to write down bad loans and recoup the difference between what they lent you and what they'll ultimately sell the property for.

they lose that option?

you borrowed a certain amount. There was nothing in your loan documents that said the loan would be adjusted should the property lose value.

You borrowed the money; you are liable for paying it back.

Fair market value has nothing to do with your loan.

I understand what you're saying, but it doesn't work like that.

Maybe not 60% of the original loan amount but lenders ARE renegotiating rates, terms AND balances.

You should educate yourself before you make simpleminded declarative statements.

OF COURSE there was nothing in the loan documents that said lenders will renegotiate but they will - especially in THIS market.

I volunteered to help out with a City of Chicago/State of Illinois initiative to foster these very scenarios. As a professional posted above, there is an FHA program that attempts to do the same.

Yeah, well, when I see that happen, I'll believe it.

In the meantime, welcome to DU

Why did you go with an ARM in the first place? Sorry, but those are suckers' deals to begin with.

Oh, and good luck with trying to negotiate away over half of what you owe. It simply doesn't work like that, and despite the fact that people are walking away from their homes, the bank cannot legally do that. They will go ahead and foreclose on you and eat the loss on the house, or better yet, bundle yours with other such properties in the area and sell the whole package to foreign investment firms. Quietly and without much fanfare many of these houses are being bundled and sold to investors in places ranging from Dubai to China.

The mortgage broker convenced me that in 2 years, which is now, the value would be up and I could just refi no prob. But now with the housing market taking a dive I can't refi, I owe more than it is worth. My only option was to work with this company to try and save me or I walk away with the rest of the suckers like me. Ben_Meyer who responded to me, says he does this for a living and it can be done, just very difficult. So pray it will work for me, but I'm prepared if it doesn't.

Sorry, I'm not trying to be an ass, but really now, if you couldn't have qualified for a fixed rate your smartest move would been have waiting until you could. I'm not a financial genius or anything close, but even I recognize that ARM's are a sucker's play.

I hope it all works out for you, but please, next time get some outside advice in making these decisions. Financial advisers are relatively cheap and the money spent on one is well spent.

There's no way any lender is going to lower the amount of the loan. No way at all.

The same people who strung her along when she didn't really qualify - yeah, property values were going to go up, right? - are now stringing her along with fabrications, just taking as much from her as they can get before the loan goes into default.

If Amy couldn't qualify for a loan anywhere else, she wasn't qualified, and got herself into a (sadly) sucker's deal. Now, she's going to lose it all. There's no other way around it.

Two years ago, it was easy enough to see that the housing industry was going into a tailspin. I feel very sorry for people who got caught in this kind of mess, but, it does go back to not being able to afford to buy a house. It's that simple.

And that sad.

be careful where you put your trust. You have no way of knowing that someone saying on a message board that he "does this for a living" is telling you the truth. That's the same kind of blind faith and willful ignorance that got you into this trouble in the first place - getting an ARM because you couldn't qualify for a conventional mortgage and believing the broker who told you the property would appreciate.

Get your own professional advice from real people. Staking your hope on a message board is just nuts.

wondering if anyone else had done this. I am not relying on this or any other message board for advice. I do appreciate your post though.

Thank you.

That's amazingly depreciation.

Well, the plan to modify the mortgage is a fantastic idea. The reduction in the mortgage isn't going to happen unless you come off the cash.

The best way to sell the idea is to simply ask for them to EXTEND your current terms for another x years. They still make the same money. Yes, it's unfortunate that you're still paying the same amount, but it appears that you'd otherwise be unable to refinance what you owe, and I'm guessing your adjustment is going to be a few points.

Right now, it's beggars can't be choosers I'm afraid.