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Old 01-06-2010, 02:21 PM
 
3 posts, read 9,080 times
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I wanted to refinance my mortgage, got approved for 5%(currently i am paying 6.75%). I assumed that the value of the property would have went down but should still be able to do a refinance.

Boy was I wrong, still owe 275k on the mortgage, but the appraisal listed the condo at 205k, purchased for 286k. we lost 81k in value since september 2007.

While this sounds tragic its really not that big of a deal with exception that I can't refinance. I have no intensions of selling. In a few years when we plan to move I will rent the condo out as it is in a growing college town that always has high demand for rental units. College has stated that they will also be increasing the number of students in the school.

So my big problem is not being able to refinance. The loan is not FHA so I dont qualify for the new government programs. Does anyone know of any programs that could be used to get my rate down. Thanks in advance.
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Old 01-06-2010, 03:24 PM
 
1,314 posts, read 2,231,938 times
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Only thing I think you could do is pay down your mortgage enough to allow a refi. Though not many people have 70k+ to do so. That is my only suggestion. Good luck.
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Old 01-06-2010, 03:34 PM
 
21,726 posts, read 37,184,337 times
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Sadly I doubt that the lender will help out, and the only reason they might is if you are in dire straits -- drastic cut in income, health problems, death of spouse. Still you might try, as many other do.

The general "plan of attack" is to determine if your loan is part of Fannie / Freddie pool, NOT just FHA. There are web sites to help you do that. In such cases the rules are different and you MIGHT be able to do a streamline modification.
If your loan is NOT part of Fannie/ Freddie that is still no guarantee that the company that is servicing it really hold the whole loan, but the rules are instead set by their own "hardship" guidelines instead a Federal regulations.
http://www.freddiemac.com/corporate/buyown/english/avoiding_foreclosure/avoiding_foreclosure_form.html

http://loanlookup.fanniemae.com/loanlookup/




Get as much paper work together as you can, about the loan itself, your income, your "hardship" and then dial the lender at the "special number" they almost certainly have set up. Depending on if your situation is one that fits into the scenario they plan for you may be able to get a rate cut and/or change in length in loan that would reduce your payment. Much harder to get lender to accept change in value...

Sounds like you have a decent attitude toward this and frankly I know folks that if they were 'only' looking at a 30% decline in value of their condo would be doing ***!

Good Luck!
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Old 01-06-2010, 03:50 PM
 
Location: Sierra Vista, AZ
15,952 posts, read 12,582,500 times
Reputation: 7754
Quote:
Originally Posted by imompero View Post
I wanted to refinance my mortgage, got approved for 5%(currently i am paying 6.75%). I assumed that the value of the property would have went down but should still be able to do a refinance.

Boy was I wrong, still owe 275k on the mortgage, but the appraisal listed the condo at 205k, purchased for 286k. we lost 81k in value since september 2007.

While this sounds tragic its really not that big of a deal with exception that I can't refinance. I have no intensions of selling. In a few years when we plan to move I will rent the condo out as it is in a growing college town that always has high demand for rental units. College has stated that they will also be increasing the number of students in the school.

So my big problem is not being able to refinance. The loan is not FHA so I dont qualify for the new government programs. Does anyone know of any programs that could be used to get my rate down. Thanks in advance.
You haven't LOST anything unless you sell. Live with the co9nsiquenses of your own actions, pay your mortgage and hang on until such time as you can either make money or afford the loss
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Old 01-07-2010, 03:48 PM
 
521 posts, read 1,480,387 times
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I was in basically the same situation as you when mortgage rates really started to drop. I discovered the same thing, I wouldn't be able to refinance as I owed more than home was worth. However, in talking to my lender, rather than do a refinance they did a "loan modification", basically just got me a lower rate and I didn't have to go through the appraisal process. I'm now at a 4.99% rate, was at 5.75%. Step one is just call your lender and talk to them. Imply that if they don't work with you, you'll find someone who will and they will lose your loan; you won't be upside down forever and you'll be able to refi at some point.
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Old 01-07-2010, 04:19 PM
 
Location: Boca Raton, FL
4,052 posts, read 5,149,021 times
Reputation: 3631
Smile Great suggestion!

Quote:
Originally Posted by usedtobeanyer View Post
I was in basically the same situation as you when mortgage rates really started to drop. I discovered the same thing, I wouldn't be able to refinance as I owed more than home was worth. However, in talking to my lender, rather than do a refinance they did a "loan modification", basically just got me a lower rate and I didn't have to go through the appraisal process. I'm now at a 4.99% rate, was at 5.75%. Step one is just call your lender and talk to them. Imply that if they don't work with you, you'll find someone who will and they will lose your loan; you won't be upside down forever and you'll be able to refi at some point.
I was going to suggest the above. There are programs through Fannie Mae and Freddie Mac that will go to 125% of the value but even with that, it leaves you with having to come up with money.
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Old 01-07-2010, 04:25 PM
 
Location: Sacramento
2,395 posts, read 4,089,459 times
Reputation: 1662
Quote:
Originally Posted by imompero View Post
I wanted to refinance my mortgage, got approved for 5%(currently i am paying 6.75%). I assumed that the value of the property would have went down but should still be able to do a refinance.

Boy was I wrong, still owe 275k on the mortgage, but the appraisal listed the condo at 205k, purchased for 286k. we lost 81k in value since september 2007.

While this sounds tragic its really not that big of a deal with exception that I can't refinance. I have no intensions of selling. In a few years when we plan to move I will rent the condo out as it is in a growing college town that always has high demand for rental units. College has stated that they will also be increasing the number of students in the school.

So my big problem is not being able to refinance. The loan is not FHA so I dont qualify for the new government programs. Does anyone know of any programs that could be used to get my rate down. Thanks in advance.
Have you looked through this site? Making Home Affordable - Home
And then just because one lender doesn't want to refinance you doesn't mean another won't.
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Old 01-08-2010, 07:48 AM
 
521 posts, read 1,480,387 times
Reputation: 503
Quote:
Originally Posted by Bette View Post
I was going to suggest the above. There are programs through Fannie Mae and Freddie Mac that will go to 125% of the value but even with that, it leaves you with having to come up with money.
Just to clarify, in my case I didn't go through any of the Fannie/Freddie programs. They simply modified the terms of my existing mortgage, specifically the rate. Cost me about $1,500.
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Old 01-08-2010, 09:42 AM
 
9,807 posts, read 6,450,585 times
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Just a question-------If a condo is appraised at $205K, and you need it refinanced to cover an existing $275k mortgage-----------------why in the world would any company be willing to do it ?

Also, why should they even be allowed to do it? ( loan 30% over appraised value )

Have we learned nothing from this mess that just happened ?
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Old 01-08-2010, 10:27 AM
 
Location: Londonderry, NH
33,797 posts, read 29,215,017 times
Reputation: 15647
The man is shopping for a lower interest rate, not for a smaller mortgage. I suggest talking with your lender and several other banks. Avoid "mortgage" companies.
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