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tobereal2001 · Joined: 30 Jan 2008 Posts: 4 2.54 Dollars($)

I financed a condo in 2005 with a 5.75%, fixed, 5 year interest only ARM. I also have a 30 due in 15 for the remaining 20% with a different lender. The primary loan will reset in 2010 and I've asked that lender to convert it to a 30 year fixed at current market rates. They refuse to do it because the value of the property has decreased due to the current mortgage mess the country is in. It doesn't make much sense to me since they are already holding the loan and are exposed to the same risk if I foreclose. I've never been late on a single payment and usually pay a little extra on it every month. Overall I'm an excellent customer with a good credit score. I know converting to a 30 yr fixed will increase my payment some, but I'm willing to do that for the security of a long term locked rate. I'm afraid that in another two to three years the rates may be too high to swing the payment when my arm adjusts. It seems like they would be more concerned with me walking away from the loan than to just convert it to a fixed principal/interest rate now. Any suggestions? I'm not even sure what my LTV is, but certain it is not under 100% and don't see a correction in the market before 2010. I'm not trying to get out of the loan, want to avoid foreclosure, and hope to keep the property for a long time. Why won;t my lender work with me?

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi tobereal,

Welcome to the forum.

How much do you owe now to the lender? How much is the appraised value of the condo?

Will like to know to give you an answer Smile

Best of luck

tobereal2001 · Joined: 30 Jan 2008 Posts: 4 2.54 Dollars($)

My current primary loan is just under 272K and my second is just under 72K. Haven't had a recent appraisal but comparables in the neighborhood are going for around 300K. I'm upside down on the LTV. I'm not looking to pull any cash out just want my primary lender to reconstruct the existing loan to a fixed 30 yr

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi tobereal,

Welcome back.

It seems that the first mortgage is lesser than the value of your house. So you can refinance it. If your lender is not interested to do it you can shop a bit for lenders for better rates and terms.

Now you will have to decide after paying prepayment penalty and closing cost will it be fruitful for you to refinance?

Best of luck.

tobereal2001 · Joined: 30 Jan 2008 Posts: 4 2.54 Dollars($)

Thanks Larry. That's what I thought too, but when I spoke with my lender they are taking into consideration the second mortgage in my LTV. I do have a friend who is a mortgage broker I'll confer with. Thanks for your input.

tobereal2001 · Joined: 30 Jan 2008 Posts: 4 2.54 Dollars($)

I was thinking enough to get into a loan with NO pre-payment penalty, so closing costs is all I'll need to account for.

charlesarmbruster

Think FHA-SECURE refinance! As long as the 2nd-lienholder agree to resubordinate, a new FHA-SECURE refinance can go to 97% of the currrent FHA-appraised value with no hit for declining market as yet -- FHA does not care what the CLTV of their new 1st and your current 2nd is, just as long as the 2nd agrees to subordinate. Check it out!

greg1 · Posted: Thu Jan 31, 2008 3:29 pm Post subject:

I agree FHA Secure could be your solution!

As for why.. I will try to give you an answer or at least some reasons to think about.

Reason #1 - You know many people do not understand that when you call about your loan and make a request like this the people you talk to may not even be the company who holds your mortgage note. So let me point that out.

For example Countrywide Home Loans is a seller/servicer. Many of their loans are sold to an investor and that investor retains Countrywide as the servicer. A servicer may not even have the right to modify your note. That being said many times you are talking to someone who has no right to modify the note.

Reason #2 - If a Mortgage Holder starts modifying notes for people then every note holder should get the same treatment. The only time I have seen a modification is when someone enters into a financial hardship. However, some lenders have a customer retention department. This department is suited to try and retain the loan. Some can even do exactly what you want. Very rarely it is the case but I suggest you ask Customer Service about it.

A live example. I worked for a holding company. We had a report that generated when a lender requested a payoff on a loan. In order to retain the loan the customer could provide a GFE and we would do a loan modification. This modification was a set amount for every customer and did not require any verification other than the GFE. No fees, No appraisal, No application. Unfortunately, I doubt this will be the case in your situation but you could at least try.

That is a couple reasons.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Hi tobereal2001,

I would wait since you have a couple years left on that first mortgage. Since you are upside down on the mortgage, it may be impossible to refinance at decent terms. The housing market could turn around by then.

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