Posted on: 02nd May, 2010 02:03 pm
my 312k adjustable rate loan just got sold to nationstar. they contacted me and want to do a "balance reductions"in the form of 20k and then change the loan to an fha at 5% with 20k in closing costs. my question is, how much can i reduce my principal by bargaining? they only make money if i refinance. do i have 20k of wiggle room? please help! i have a good friend who said that they probably bought american home mortgage's (mortgages) for pennies on the dollar after they went bankrupt. obviously we don't know how much they paid, but they couldn't have paid full price if they can afford to drop my principal by 20k. any help is greatly appreciated! g
Hi oldbluehat,
You need to inform your lender about your financial situation. Depending upon your financial conditions, the lender will let you know whether or not he would reduce your principle balance. You can negotiate with your lender for a balance reduction of 20k. It would be the lender's discretion whether or not he would consider your request.
You need to inform your lender about your financial situation. Depending upon your financial conditions, the lender will let you know whether or not he would reduce your principle balance. You can negotiate with your lender for a balance reduction of 20k. It would be the lender's discretion whether or not he would consider your request.
It was me above, just forgot to log in. :)
Adonis, yes I know it's their discretion, my financial situation is perfect...never a late payment, we have perfect credit, and can afford our mortgage as is. I guess the real question is...what is the likelihood that they would reduce my balance significantly? I think my logic in my original post is pretty strong. If I do nothing, they lose out on three different levels...the revenue from the orginal loan, the security of holding an fha rather than an arm, and the potential profit of selling the new fha to another institution. I am likely to sell the home (possibly depending on my wife's military obligation) in the next two years anyway. I don't need my loan to be refinanced in that case. i could just sit and wait. But, if they are eager to restructure my loan, I am the one in control, right? I liken it to walking into a car dealer and saying, I don't need a car right now. If you agree to x price, call me! I'm going home. Until they decide that they really want to do a deal, I can just wait. That salesperson is then in a take it or leave it scenario. Thoughts?
Adonis, yes I know it's their discretion, my financial situation is perfect...never a late payment, we have perfect credit, and can afford our mortgage as is. I guess the real question is...what is the likelihood that they would reduce my balance significantly? I think my logic in my original post is pretty strong. If I do nothing, they lose out on three different levels...the revenue from the orginal loan, the security of holding an fha rather than an arm, and the potential profit of selling the new fha to another institution. I am likely to sell the home (possibly depending on my wife's military obligation) in the next two years anyway. I don't need my loan to be refinanced in that case. i could just sit and wait. But, if they are eager to restructure my loan, I am the one in control, right? I liken it to walking into a car dealer and saying, I don't need a car right now. If you agree to x price, call me! I'm going home. Until they decide that they really want to do a deal, I can just wait. That salesperson is then in a take it or leave it scenario. Thoughts?
Hi G Norton,
I would guess that what they want to do is unload your loan form their books and in order to do that they want to convert you an FHA fixed so they have more options in the secondary market. I would also guess that the 20K reduction is so that your loan amount lines up with the FHA loan limits for the county you live in. You can go to this site:https://www.entp.hud.gov/idapp/html/hicostlook.cfm and look up the loan limit for your county to see if I'm right.
There is no reason for them to charge 20K in closing costs so that's what you should negotiate on, not the give horse of a 20K balance reduction.
I would guess that what they want to do is unload your loan form their books and in order to do that they want to convert you an FHA fixed so they have more options in the secondary market. I would also guess that the 20K reduction is so that your loan amount lines up with the FHA loan limits for the county you live in. You can go to this site:https://www.entp.hud.gov/idapp/html/hicostlook.cfm and look up the loan limit for your county to see if I'm right.
There is no reason for them to charge 20K in closing costs so that's what you should negotiate on, not the give horse of a 20K balance reduction.