How to negotiating w/Indymac on Refi. (loan, interest rate, foreclose)

[soozanm]

My loan is owned by Indymac not Freddie or Fannie; so I was told that I would have to negotiate a refi. directly w/them. My first & second are interest only : 279K at 5.78% ($1250), my second is 69K at 9.5%($575). Both were fixed for 5 years;then they both go adjustable. Which will happen in about 4 months. The price of my condo has gone down between 70 - 100K. 34 unit complex and one of the units forclosed. So of course Im hoping that they will lower my princinple or lower my interest rates. I have submitted a request only for the refi, but have not heard back from them, so Im planning on going inperson to the bank. What should I expect? How do I negotiate w/ them?
Thanks, any suggestions would be helpful.

[chet everett]

You should first get your terms straight. What you want is probably NOT a "refi" which is generally a NEW mortgage with an existing or different lender. Refi involves fees just as a new mortgage would. Generally a refi will NOT help some one in a situation like yours.

What you need is a "recast" or loan modification. Recasting Your Mortgage The idea is that the EXISTING lender will realize that the rates you have are much too high, and quite probably the principal amount is far above the true value of the property. Lenders are much more likely to allow modification to the rate and terms than they are to the principal amount, though there are a handful of people that have been successful.

The keys are to have your ENTIRE financial picture ready to lay out for the lender. This includes the values of other comparable homes in your neighborhood so that the lender realizes that if they were to foreclose on you they WOULD NOT make any money. You have to find some one with the authority to realize it is NOT in the bank's best interest to do anything other than adjust your payments to something that will be affordable by you.

Good Luck!

[soozanm]

Originally Posted by soozanm

My loan is owned by Indymac not Freddie or Fannie; so I was told that I would have to negotiate a refi. directly w/them. My first & second are interest only : 279K at 5.78% ($1250), my second is 69K at 9.5%($575). Both were fixed for 5 years;then they both go adjustable. Which will happen in about 4 months. The price of my condo has gone down between 70 - 100K. 34 unit complex and one of the units forclosed. So of course Im hoping that they will lower my princinple or lower my interest rates. I have submitted a request only for the refi, but have not heard back from them, so Im planning on going inperson to the bank. What should I expect? How do I negotiate w/ them?
Thanks, any suggestions would be helpful.

Thanks for your feedback, it is much appreciated ! Indymac had told me that I do not qualify for a modification loan because I am current on my morgage payments and my credit is very good (750). In my situation should I expect to pay fees, points closing costs? Is it like buying a house all over again when I go through the process?

[chet everett]

Well my take is a little different. I understand that the drool machines that large financial institutions hire to answer their phone banks are given a script and ZERO authority. I would not stop with these frontline fools.

The reality is that you WILL NOT be able to refi if the value of your property is now BELOW what you owe.

You have to "break through the stupidity" of the drones in the phone center. Ideally you are near enough to a physical office that you can literally stare down some one in authority to get your loans reviewed. If not I would suggest to start with written communication via registered mail to anyone with a real name and real title that even SUGGESTS that may be able to grasp what is facing THEM AND YOU both: a BAD situation that will likely get worse.

The rate on your second is MISERABLE and the rate on your first is not a whole lot better.

You say your credit score is good, but what about your cash flow? If you can show that you are sinking into debt any sane human that has authority at a lender ought to be smart enough to modify the terms of your loan so that it is more inline with current rates. If they do not do that AND YOUR CASH FLOW IS DETERIORATING soon you will be in default. They will then have to foreclose on you and they will be stuck with a condo that is worth MUCH LESS than what they lent you.

In simple terms, any change they make to your loan NOW will be less costly than the court costs and losses that they will ring up in foreclosure...

[soozanm]

Thank you, I really appreciate your knowledge and advice. I feel like I have some information to move forward with.