4 responses to “Renegotiation of mortgage loans?”

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  chatsplas October 29th, 2009 at 17:33

  Eleanor

  This is why Interest Only loans are a BAD idea. You have NO Equity in the home, and now have negative equity, plus you have a loss on your property. If you can hold on, the market should recover, but you’re bleeding cash.
  Doesn’t sound like this was EVER a good plan if the rental is so much lower than your monthly cost. The bailout programs may offer some Loan Modification provisions, which could lower interest rates, but you have to be a good credit risk to qualify, there has to be a good chance you will come through this if only they restructure. Right now there’s nothing, except you going to lender and working on them for loan modification, to lower interest rate. Not sure that doing so (even if successful) would Save The Day for you.
  Get good legal ADVICE BEFORE you go into such situations. And listen when people say this is fiscally irresponsible, you can’t swing this.

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  primericaisbad November 1st, 2009 at 01:33

  Kathy

  The interest-only portion of this is a SMALL problem. Had he been paying principal, he’d be in much worse shape. Sure he would’ve paid down the principal a few thousand dollars, but out of his own wallet. He’d still be upside down almost $100k and have less cash on hand. The negative cash flow was the issue. He’s one of thousands of investors that took a shot, willing to pay $25k in negative cash flow. He was hoping the bubble would keep expanding and the house would be worth a lot more than it is now. Your bubble burst. There’s nothing you can do, except let it go like everyone else is going to do. You might as well do it now before they change foreclosure laws, plus you’ll be a little ahead of the game.

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  Leon G November 2nd, 2009 at 15:55

  Bruce

  you have been credit crunched

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  Ed Atun November 4th, 2009 at 03:43

  Beth

  Right now you will not be allowed to modify your loan unless you have lost your job and are 2 payments behind. That is a discouraging scenario because your credit will be ruined if the “modification” is rejected.
  Most renegotiations give you 6 months with no mortgage payments. Those payments are added on to the loan balance. It gives you breathing room but not much more..