Here is yet another email from a reader looking for a solution to his mortgage problem.
BE SURE TO READ THE RESPONSE AND BOTTOM FOLLOW UP AS IT MAY BE THE MOST IMPORTANT PART TO THIS WHOLE POST.
I happened on to your Blog and saw you were helping a lot of people. This is more than likely a similar situation as most people who write you.
I bought my house 3 years ago and at that time it was an 80% First trust, 15% Second trust and 5% down payment. I bought it for $585K in “some city, Some State. My neighbor has their house on the market and it’s the exact same model for $549K. It’s only been a month so my fear is they will probably lower their asking price even more. The first trust is an Interest-only ARM and it will adjust January 2010 and I know if it adjusts I will more than likely not afford the new payments. When we first bought the house we only planned on living here for 4-5 years and than moving out of the area, but since then are plans have changed and couldn’t do it now even if we wanted to. My goal is to keep close to the same payments as I have now and we don’t plan on moving any where in the indefinite future (if we can help it).
What options do I have?
Here we have a classic example of a first and second mortgage that is slightly upside down and the solution is easy.
It’s only made difficult when we look to solve the second mortgage equation.
So my math, purchased at $585K and have loans to 95% of that price or $555,750.00.
We have a first of $468K and a second at $87,750.00.
Now for some standard loan guidelines to support our scenario, a FHA loan will refinance in first position to 95% regardless of CLTV (combined loan-to-value). Translation, YOU CAN EXCEED 100% LOAN-TO-VALUE and in this case solve the Upside Down Mortgage problem you have. Now not all lenders do this or even know this is allowed but it can be done and I do it often.
Your next move, we need to get you qualified for a FHA loan to 95% LTV. Once we have that done we will need to hire a Professional Loss Mitigation negotiator who understands your scenario and has the ability help us solve your second mortgage equation.
The second mortgage will need to agree to do one of two things:
1. Subordinate allowing us to refinance your first to something that isn’t out of control.
2. Agree to settle the balance by taking cash out with the first mortgage in hopes of paying only a portion of the balance owed on the second under the notion they would waive the remaining balance.
I guess we could chalk up a third option, they could agree to nothing and we would be stuck!
I think it’s obvious which option is best, we want them to settle and allow us to move on with only one mortgage at a balance that is lower than the current balances combined.
Not to get these companies to make these types of adjustments you need to be a Real Estate Attorney or you need to hire one. You could go out and do this on your own and pay through the nose for it or you could go with my team and pay a pre-negotiated amount.
If all goes well and according to plan you should end up with a lower loan balance and in turn a lower mortgage payment than you may currently have.
I hope that helps you and your family with the decisions ahead. As always I am here to help and together we can make GREAT things happen.
Be in touch.
To hire my team to assist you and your family it will cost $1350 which will go to cover both a Real Estate Attorney to review your loan documents as well as the hiring of a Professional Loss Mitigation Negotiator to negotiate the settlement. If no settlement can be reached we will refund you $450.
You can email me for a copy of my contract to review at Brent@brentlane.net
To get started right away, I will need an email from you listing your scenario, copies of all your loan documents from your last loan either scanned or faxed to me (916-580-6650) and I will forward a contract to you to sign and get back to me as well.