5 year arm

Guest

I am in a 5 year arm with a low payment option. The arm doesn't expire until 2010. My principle balance is growing. I know that when the arm is up I will not be able to afford the payments.

I took the arm because we were trying to sell the house a month before the housing market fell. We are not trying to sell now. I would not get what I would need to pay off the loan.

Oh and the mortgage company does not do loans anymore for New Jersey residents. This also happened after I refinanced. What should I do? I think their prepayment penalty is for 5 years. But since they do not loan to New Jersey residents.....can I try to fight it to get out and refinance now or wait til the arm is up?

Thanks

LG

gmakerley · Posted: Mon May 04, 2009 10:06 am Post subject:

you didn't say whether you can or cannot afford to make regular payments now. do you know what the effects of the prepayment penalty will be? is it 2% now or 4% now, or what?

would they entertain your query for a modification if you made it?

i think you'd be smart to find another lender to try to step in and refinance for you. of course you'd be hoping to get a fully amortized loan to help you to afford payments, etc.

JKennedySLG · Posted: Mon May 04, 2009 10:07 am Post subject:

Hey LG,

You must be in an Option ARM because pre-pays are not really allowed in NJ except for those type of loans. Get me some information on the particulars of the loan and we'll order your payoff and begin the negotiation process. I have had some success in dealings similar within the last few months as far as getting pre-pays reduced or even dropped. If that is the only thing keeping you from refinancing into a loan which suits you better, we have a shot. I'm right in central NJ myself, let me know if I can be of more assistance to you. I hope this helps...

Guest

I can't afford the regular payment option right now. But I am watching my principle go up which means my payments will be even higher than they are now. My minimum payment which I can afford is $1555 per month with a 6.08% interest rate. Are there any types of loans right now that can keep me at that payment or a little higher? I just lost my job as well.

I have my mortgage with Downey Savings and Loan out of California.
Thanks

LG

gmakerley · Posted: Mon May 04, 2009 11:12 am Post subject:

i'll go back to my question above: will they do a modification for you?

Guest

What do I just call them and ask them if they will modify my loan?

gmakerley · Posted: Mon May 04, 2009 12:10 pm Post subject:

what you'd want to do first is to call and suggest that a modification is in order and ask what sort of documentation they'd need. they'll need a hardship letter from you, explaining the reasons for your request, among other things.

if you go to www.hud.gov you will find that new jersey has a substantial number of non-profit entities that are willing and able to help you with counseling, etc. and perhaps even guide you through the modification process.

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