My son and his wife bought a condo just before the peak of the market last year. (Timing is everything :smack:)
Anyway it looks like the condo is now worth about 100K less than the purchase price. (Did I mention timing is everything?)
for reasons we don’t need to go into, it looks like they are headed for divorce.
There is no way in hell she can afford the place on her own, he might just barely be able to swing it on his salary, but it will be tight.
If he could get the terms of his loan changed, it would probably be not a huge problem.
Now I have seen the ads on TV for loan modification, but I will be damned if I tell him to call one of those outfits, so I turn to the wisdom of the SDMB for the straight dope.
So educate me please.
One more question, what are the tax implications of this transaction?
apart from dealing with the current debt-holder, i’m not sure you’re going to have success in refinancing/modifying the mortgage on a property with negative equity.
i’d try to find someone (honestly, an attorney would probably be best) who is known to have success in dealing with these loan companies.
Do not trust any outfit that asks you for cash up front and promises results.
There are a lot of fraudulent operations out there working like that, where they tell people to stop paying the mortgage and save up money (after giving them a hefty fee), only to later find out that they are foreclosed on and the fine print of the contract absolves them of any liability.
Remember, only the debt holder can change the terms of the loan (unless you get a new loan with a different company which completely pays off the old loan I guess.) Do not trust anyone who guarantees otherwise (especially since that guarantee won’t be in the contract and they’ll later claim they didn’t tell you that and you can’t prove otherwise.)
Here is the Government mortgage modification site. It is entirely trustworthy, and negative equity is not a bar. The site will show them whether they meet the basic eligibility terms for modification, and whether their loan servicer is participating in the program (most are). The Government’s call center hotline for this program is (888) 995-HOPE.
Even if they are not eligible for the Government program for some reason, or their servicer is not participating, their servicer may have its own loan modification plan that they can explore, if they call directly.
Most third-party companies offering mortgage modifications are scams, especially if they ask for money upfront. Start with the Government site.
Well, I’m in a situation where my fiancee decided to leave me for another man after we had bought a house together. She decided that I would keep the house. There’s no way I can afford to pay the mortgage by myself. Fortunately, the loan people sent us a “happy anniversary” (argh, the irony) statement, saying that we could refinance the loan, so I called them.
My current mortgage payment is $1100 a month for 30 years. If the house reappraises for a sufficiently high price, I might be able to get a new loan where for 10 years I only have to pay $750 and then for the next 20 years, the payments become larger than they are now (which would give me a chance to decide to sell the house or get someone else to move in to help pay). But, if that doesn’t happen, the best I can hope for is that the payments will drop to about $900 (still a bit steep for me to be able to pay)… but the kicker is that of course there are still closing costs to pay which will probably wipe out all the money I’ve saved up after already dropping a $30,000 deposit on the house plus $5000 closing costs.
So, I can choose to have a mortgage payment which is so steep that I’ll never save any money ever again or I can choose to refinance and lose all my savings but possibly be able to start saving miniscule amounts of money.
Oh, the agony of choice.
Go to loansafe.org - there’s a lot of helpful information in the forums.
Is it possible to refinance or get a loan modification while you’re unemployed? I was late one time with my mortgage payment and my lender was calling me within days. I paid up (when my unemployment check came). They followed up with letters asking if I was experiencing hardship and saying they might be able to help.
A lot of people recommend trying to work with your mortgage company if you’re having trouble but is that wise? I don’t want them to know I’m unemployed, after all, these are the same people who were complicit in our economic melt-down and got bailed out. I fear that like vultures, the moment they learn you’re unemployed, their ‘help’ will be entirely self-serving and will hurt me.
I have the same questions about loan modification - if you’re unemployed - can they really help you? Will it come back to bite you in the ass?
BTW - I’m up to date on my payments but I don’t know how much longer I can survive.
I want to add that though I’ve been unemployed for over a year, I have managed, so far, to pay all my bills because I had savings socked away that I could use to supplement my unemployment benefits. So it’s not like I had taken out a risky mortgage - I was laid off and have still managed to pay all my bills. But a lot of time has passed and despite my good sense and planning, I could never have imagined how long and how deep this unemployment situation would last.
I only add this because I hope to forestall those who will post speculations about deadbeats and irresponsible homeowners.
States and counties sometimes have mortgage loan modifications. They try to get the amount to approx. 30 percent of income. That was what Obama was shooting for.