Loan Modification - ARM to Fixed? (fixed rate, credit, rate, refi)

[Jkgourmet]

I am posting this for my SIL, who lives in San Diego. She made a BIG mistake 3.5 years ago and did a 5/1 ARM. Her credit is excellent, has had the same job for 10+ years with no expectations of that job going away. The balance of her mortgage is about $250K. There is no second, and she has no other debt. She has never had a late payment.

However, she did take cash out of the equity when she did the refi 3.5 years ago, and the house has depreciated. Her goal is to have the mortgage modified to a fixed rate - even if it is slightly more than the current market rate.

She went to her lender, Chase, and asked for a refi. She paid for the appraisal, which shows that the house is worth exactly what the current principle balance is. After a realtor friend looked at comps, he felt that the appraisal was pretty spot on - maybe $10K below what it should be.

Does anyone know of a modification plan that she might utilize? Or have another solution for her?

[TimtheGuy]

Originally Posted by Jkgourmet

I am posting this for my SIL, who lives in San Diego. She made a BIG mistake 3.5 years ago and did a 5/1 ARM. Her credit is excellent, has had the same job for 10+ years with no expectations of that job going away. The balance of her mortgage is about $250K. There is no second, and she has no other debt. She has never had a late payment.

However, she did take cash out of the equity when she did the refi 3.5 years ago, and the house has depreciated. Her goal is to have the mortgage modified to a fixed rate - even if it is slightly more than the current market rate.

She went to her lender, Chase, and asked for a refi. She paid for the appraisal, which shows that the house is worth exactly what the current principle balance is. After a realtor friend looked at comps, he felt that the appraisal was pretty spot on - maybe $10K below what it should be.

Does anyone know of a modification plan that she might utilize? Or have another solution for her?

First, I don't see why it was a BIG mistake. It is pretty unlikely that her rate will go up in a year and a half when it's time for the 1st adjustment. Once you get past the first adjustment, the subsequent years are much more limited.

Second, from you you laid out she should be able to refi under the HARP program at basically market rates. If CHASE says it can't be done, tell her to talk to a broker or someone else.

[dad2jules]

She is the target market for HARP. Had 20% equity at last refi before May of 2009 and now has none but wants to move to a lower payment or more stable product. Get a referral to a local broker from a trusted source.