Modification On Property Loans In California
My husband was laid off last year but luckily identified a job. The job paid $ 2,000 less a month. In the past year we have cashed out two 401K to meet our monthly costs. I’ve always paid my bills on time and our credit score is about 760. Recently We’ve been looking into refinancing our property to a lower interest rate(currently at 6.675%) Our income is too high for the government modification. Our house appraised for $ 100,000 much less than what we owe on the loan so we had been unable to refi. There are forclosures all up and down our street with several houses that are abandoned(looks like squatters have moved in next door) so we know that we could by no means sell our house even in a short sale. It seems like the bank would want to assist me stay in my residence and make regular payments at a lower interest rate. Any person have any suggestions other than walking away? I’m in Southern California.
Hey thanks tax lady for your worthless advise. For your information when my husband was laid off last year when the economy TANKED we utilised our years worth of savings so blow it out your A**. I’m trying to save my home from a mess that the BANKS created not the mess that I produced.
Answer by dmc7711
1 thing I can tell you, it takes about a year for foreclosure proceedings to be total. I know that this is not necessarily what you want to hear right now, but although you are investigating mortgage options, you do have time.
More Loan answers
Don’t hold your breath.
Sorry to blunt, but the loan modification program is a scam.
We qualify and have the right income and have been trying to get a modification for a YEAR! We’ve seen an attorney and went to an assistance program with a good reputation. We can’t get responses from our mortgage company and haven’t gotten the same person on the phone there even one time. It is a complete runaround.
I’ve written letters to all our congressmen, to the papers, and to the federal government. There is no help.
If you are upside down, you need to look at making some hard business decisions. We are seriously considering walking away. On my street, there are only 9 houses and 7 of them are abandoned, vacant, for sale, or have been foreclosed on. I live in a waterfront community in Florida. One in three houses in my subdivision are in foreclosure. There is NO short sale relief. On average, the houses that are selling, are selling for less than half their worth.
I have a legitimate recent appraisal of our newly extensively remodeled home for 245K. We owe much less than that, but no realtor will list it for more than 140K. I owe more than that.
Why keep paying on a piece of property that isn’t worth the paper it’s mortgaged on?
Crummy situation, huh?
If you get help, then bless you. Good Luck.
Edit: The “Tax Lady” is an idiot and not in touch with reality. In my case, we had a year’s worth of our bills and mortgage in a saving account as an emergency fund. My husband is a general contractor and we’re in one of the hardest hit areas of the country. In my county, unemployment has hit 16%. We’ve suffered a loss of more than 75% of our income between both our jobs (my 14 years of employment didn’t matter a bit when my company decided to reduce hours across the board). If we spend our emergency fund and then deplete our savings trying to hold on to a house that isn’t worth anything, who’s the dumbass? Credit doesn’t mean anything when you are out on the street without a dollar in your pocket. I have kids….do you think I care about credit when I’m worried about buying groceries? When I took out my mortgage, I had every honorable intention to repay the loan. If I walk away, it is because I am putting my family’s needs first. It may not be a strong financial decision to make, but it is the moral thing to do for my family.
You are stuck.
When the bank made you a deal to lend you the money to buy the house, they made you a deal. This total, this interest rate, etc. based on your ability to pay at that time. They lived up to their end of the bargain.
The moral problem with “walking away” is that you borrowed money, not a house. The bank wants money. A default will ruin your credit and make it extremely difficult to rent or own in the future.
When you ask to refinance, the bank is replacing the original deal with a new one, so you are looked at with fresh eyes. If your income has dropped or the value of the property you are pledging has dropped, they aren’t required to offer you a better deal just because you want one. Yes, paying less per month would help you…but statistically it doesn’t help them.
Since you have already dipped into your 401Ks to meet expenses, it’s clear you don’t have other any savings to make up the difference. What’s scary is that you didn’t have 6-12 months of emergency money since that would have tied you over. (The HAMP program has an income limit. There is a mortgage limit of $ 729K.)