I live in Atwater, CA. and home prices have gone down just like everywhere else. My family moved to this house in jan. of 2006, we paid 260,000.00 for the home. we pay 1,600 each month, my parents don’t think that it is in their best interest to continue making such a big payment on a home that is now worth 70,000 less.. when they first bought it, the realtor told them to refinance the home in 1 year. but since prices went down, they were unable to refinance to get a lower house payment. They are now considering to try and make a deal with the bank, Countrywide, they want to ask them to appraise the home and depending on the home value, to adjust the monthly payment depending on what the home is now worth, and not the amount as it was when we bought it, its not in best interest of the bank, I know. but if my parents loose the home, the bank will have to sell the home at the appraides value, this will just save them the work of looking for a new buyer.. What do you think? will it work?
I dont think it will work like you are thinking. If they are having problems paying their payments the first thing they need to do is get on the phone and explain but if they just dont want to keep paying the payments because their value dropped thats just wrong and when the market comes back up they will be stuck paying higher prices again, and it will come back before they will be able to buy another place after going through a foreclosure or even a short sale. If they are having problems though the bank may be willing to work with them on ways to reduce their payments. It is very expensive for a house to go through foreclosure and banks dont like to do that unless they need to. The most important thing they can do is keep communication open with the lender.
Making a mortgage deal with Countrywide..?
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Never hurts to ask. But more likely, the lender will at best offer to reconfigure the ARM if thats what they have.
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I dont think it will work like you are thinking. If they are having problems paying their payments the first thing they need to do is get on the phone and explain but if they just dont want to keep paying the payments because their value dropped thats just wrong and when the market comes back up they will be stuck paying higher prices again, and it will come back before they will be able to buy another place after going through a foreclosure or even a short sale. If they are having problems though the bank may be willing to work with them on ways to reduce their payments. It is very expensive for a house to go through foreclosure and banks dont like to do that unless they need to. The most important thing they can do is keep communication open with the lender.
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There is nothing wrong with going to a bank and discussing your situation about lowering the monthly payments. Will they do it for you? If you asked me this quesion a few years ago I would tell you to forget about it, but in todays market the mortgage companies will be willing and able to listen to anyone about needing a lower monthly payment. You are right it is cheaper for them to give you a lower price than have the house enter foreclosure.
Look at it this way…the worst possible thing they could do is tell you no, and you have to keep making those payments. Now I am not sure if you are able to or not, but if you are able to keep making the payments and the bank tells you no…then hang in there because eventually the market is going to come around again (probably in about 8 years) and you will be able to cash out at a minimum of the price you paid maybe even at a profit. Good luck with your situation and I hope you are able to work something out.
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They may lower the interest rate, but they will not eat 70k and let your family stay in the house. Your family was given 260 thousand and spent the money. They can not decide not to repay the money they spent w/o repercussions.
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Nope, they won’t do it.
Bankruptcy laws have changed, and there are alot of people just walking away from homes that are in negative equity right now, and are getting the shock of their life when they get hit with a deficiency judgement and find out that they cannot bankrupt a debt that they simply made a choice to walk away from.
Those days are g-o-n-e. You can no longer file for bankruptcy for financial mismanagement.
Countrywide won’t negotiate b/c they have staggaring foreclosures and one more won’t make any difference b/c they know you are upside down in the house. That threat no longer works.
Your parents made the mistake of getting a program that they couldn’t afford, and assumed that the market would continue to go up–and shame on the Realtor for making a guarantee that never has existed in the history of the mortgage industry.
Your parents need to stick it out and pay it.
The market will turn, and they will think $1600 is cheap until they find out what the rental rates are.
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That isn’t going to happen. The only thing your parents can do at this juncture is ask for a rate modification.
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Oregon Realtor