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A credit counselor says he can freeze my credit for 90 days. Then he can negotiate with my bank and have them erase my second loan to avoid having me default on both loans. He says he can negotiate and get a response in about 2 days and it will not affect my credit.
My house is in Las Vegas. 1st. loan $207k, 2nd loan 90K, and apprised value of $250K.
1. Is this too good to be true?
2. What would you ask before paying $2,500 to do it?
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,848,281 times
Reputation: 958
Why are you walking away? If it is because your adjustable rate has adjusted and you cannot afford the new payment you can try a loan modification (aka short refi), you can try an FHA refinance which will allow over 100% loan to value as long as the second holder will subordinate (it's either that or they get nothing), or you can short sell it. Whether any of these options is viable or not, and what effects will be felt, are contingent on your occupancy status and reasons for vacating the property. I would exhaust all available resources before giving someone $2500 upfront for a service that may not be needed as many scheisters are now cashing in on the unfortunate situations that many now face. I am in Vegas so if you would like to talk further send me a direct message.
Location: Upstate NY native, now living in Houston
663 posts, read 2,263,659 times
Reputation: 216
Quote:
Originally Posted by toad pad green
A credit counselor says he can freeze my credit for 90 days. Then he can negotiate with my bank and have them erase my second loan to avoid having me default on both loans. He says he can negotiate and get a response in about 2 days and it will not affect my credit.
My house is in Las Vegas. 1st. loan $207k, 2nd loan 90K, and apprised value of $250K.
1. Is this too good to be true?
2. What would you ask before paying $2,500 to do it?
Too good to be true. Run away from this person as fast as you can. They are scamming you.
Sounds very fishy. If you are able to make your payments, then why in the heck would you walk away from your home? You purchase new car, drive it off the lot and lose $$. Houses will come back, cars (unless classic) will not.
Don't lose your home, you will regret it when the market does turn around and you will not be able to purchase another one.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,848,281 times
Reputation: 958
A loan modification may affect your credit a little, but nowhere near what a short sale or FC will do to it. However, the fact of the matter is that because you are in a fixed rate loan there really is no way to modify the loan. In other words, if you were in an ARM at market rate (let's say around 5.5%-6.5%) and it adjusted (to let's say 9%) then what a loan mod would do is get the lender agree to fix the loan at the original interest rate. Being that you are already in a pretty low fixed rate, I can't see how a lender could lower that rate for you anymore.
You might try the short refi route, which is the lender reducing the prinicpal balance of the loan(s) to market value, although I don't know how that is going to work with both lenders. However, being that you are in a hardship situation (I assume that you have lost some income and that's why the payments are killing you now?) they may be able to work with you as it would undoubtedly be less expensive to everyone involved than a FC.
You can always try the short sale route as well. My understanding is that recent legislation allows some sort of amnesty against the lender's recourse (first or second position) so they cannot 1099 you for the difference, which they never should have anyway since they are claiming it as loss, or come after you with a deficiency judgement. I work pretty closely with a Realtor out here that is an absolute whiz with the short sales (over 80% closed is what he says). If all else fails I could give you his number.
What changed that you can't afford the payment now? if they are fixed, you knew how much they would be when you signed up for them.
Regardless, here's some good advice from Dave Ramsey. He tells callers pretty much the same thing at least once a week: (Note that the numbers are applicable to the problem he's addressing in the link. your numbers are different but the theory is the same)
I recommend you call the company that holds the second mortgage on your Georgia house and tell them where you are. Let them know that you’re getting ready to hand them the keys unless they’re willing to work with you. Tell them that, at the moment, they have a partially-secured second mortgage for $34,000 of which around $10,000 or more is unsecured. You can make payments on a $34,000 loan, but you can’t make the payments of a $156,000 loan, which is the total of your two mortgages on that house. Ask them to admit that you don’t have a collateralized loan, which they already know. Suggest to them that they allow you to sell this property for less than $156,000 and you will sign a note for the difference. For instance, if it sells for $136,000, the mortgage companies get all of the proceeds and you sign a note with them for $20,000. See if you can get them to sign a partial release under those circumstances.
If they’ll do that, you can reduce the price of the house and put an “Owner Desperate” sign in the yard to sell that house. You’ve probably got about a 50\50 chance of them accepting this kind of arrangement.
Another idea would be, if your credit is still clean at this point, to go to a local credit union and borrow $15,000 or $20,000 on a signature loan to pay down this second mortgage to the point where you can sell the house for enough to pay it all off. However, if you go that route, I wouldn’t send the money from the signature loan until you’re ready to pay the house off altogether. That way you aren’t stuck with yet another payment until the house sells.
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