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I have a second home in Arizona that I bought with no money down in 2006. My 1st is for $240k (5 year interest only at 5%), my second is for 60k (interest only at 8%). I bought the home for $300k and is now worth roughly $185k. I receive $1115 for the monthly rent and my monthly expenses are roughly $1850 (negative -$750 per month).

I have excellent credit and wanted to know what is the best way to negociate and modify my loan so I won't be negative each month?

Who should I speak with at the bank?

Can I do this without stopping my mortgage payments?

Thanks,

Calboone

eric1 · Posted: Thu May 07, 2009 5:54 pm Post subject:

Call the bank and ask to speak with someone in the loan modification department. Be prepared to share your PLAN with them. Explain that you are willing to keep up with the payments even though the home is underwater. However, you will only do that if you are not at a negative cash flow position. Discuss a plan to get the payments down to the $1200 range. This may simply mean a reduction in your interest rate and/or potentially switching to an interest only scenario.

Keep in mind that you may have to put this all in writing.

jerry · Posted: Fri May 08, 2009 7:32 am Post subject:

Hi calboone,

As Eric had already said, you need to discus this with the loss mitigation department of your mortgage company. You may have to send them a hardship letter stating the difficulty you are facing in making the payments at present and how you think the modification will help you stay current on the loan.

Thanks,

Jerry

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