U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Old 11-23-2008, 12:22 AM
Location: Cedar City, Utah
4,330 posts, read 8,385,682 times
Reputation: 1764


Ok, I am sure you have been hearing in the news about banks possibly giving owners who are behind in payments and homes about to go into forclosure lower interest rate loans. How exactly would this work? Now that I have an offer on a short sale and the sellers signed and it's to the bank for review, I am worried that possibly the bank might go to them and offer them a lower interest rate. The owners haven't made a payment in six months or so. I guess I am uneducated on who the banks are going to offer these lower loans too. We as home owners would surely like one. We have a fixed rate but if they offer 3% loans, I would be for it. If anyone has more insight on this, would love to hear from you.
Reply With Quote Quick reply to this message

Old 11-23-2008, 10:41 PM
Location: Cary, NC
1,036 posts, read 3,716,484 times
Reputation: 505
Loan modifications are gaining in popularity right now. Since buyers are having a hard time getting financing (or even deciding to buy with employment and economic fears) banks have realized keeping people in their homes is often a better solution than hoping a short sale works.

Also, banks usually are willing to renegotiate interest rates before they negotiate principal reductions... which is what a short sale is. It is similiar to the process of negotiating a short sale. The owner puts together a package explaning the situation and the lender analyizes it.

If they see that the current budget is a problem but that a modification will help the owner get back on track, they offer it. If the situation looks hopeless, they do not... a homeowner can do the process alone or work with a company that helps.

Beware if you are going to use a company. Many of the people doing loan modifications and "saving" homeowners are the same ones that sold them on a mortgage they could not afford in the first place. A lot of people have jumped into the modification bandwagon and are collecting fees and making promises they can not deliver.

Its pretty much the same situation as sub-prime loans a few years ago. Regulations are a work in progress, many companies don't follow the few that exist and others just do not understand them. Always do your research on the person and company you are looking at for financial advice. The BBB, state licensing organizations, google search.
Reply With Quote Quick reply to this message
Old 11-24-2008, 09:46 AM
Location: Orlando FL
1,065 posts, read 3,781,358 times
Reputation: 424
I wouldn't be too worried in your situation. Short sales have plenty of other opportunities to fall through, but if the owner is 6 months behind, and already has a short sale in process, I don't see a sudden call coming from their lender saying they are going to lower their interest rate to 3%....and even if they did, depending on the owners situation I doubt they'd take it and would rather short sale. But it's always a possibility.

Be more worried about the seller filing for BK or the bank simply not accepting the short sale and foreclosing.

If you were looking for a loan modification, listen to rcarillo, be wary of companies that do this as a "service" for you, just call up your lender yourself. However if you are in fine financial health and can, your mortgage payments easily (which if your buying another house sounds like you can), didn't buy the house at the peak of the boom, and are not upside down on your mortgage....I don't think you'd be a candidate for modification.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.

Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top