Upside Down Mortgage Need Help

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Upside Down Mortgage Need Help

by Chris
(Florida)

I am upside down on my home mortgage...still making payments and current. But I was interested in some relief as we have a new baby and money is tight. Any suggestions that may help us out would be grateful. Thank you.

Mortgage Loan Modfication Answer:

by Mortgage Loan Modification Expert - Dan North

Hi Chris,

Congratulations on the new baby. You are in for an adventure.

Chances are with a new addition to your family that you have a valid financial hardship which is a bottom line requirement for lenders to give a loan modification.

One thing you have to understand right off is that you will need to take action now. Since you are current it will take about 6 months to get a mortgage loan modification if you qualify for one, so you are not going to get immediate mortgage relief.

Lenders will try to discourage you from modifying your loan even if you qualify since you are current. They figure since you are paying that if they put you off you will just keep paying.

Fill in the Financial Hardship Form if you are looking for some professional help with no upfront fees.

As a general rule under the government guidelines you qualify for reduction if your 1st mortgage payments including property tax and insurance is more than 31% of your gross income (this does not take into consideration 2nd or 3rd mortgages but your lender will even though not covered in the government guidelines).

If you do not fall into the government guidelines you still may qualify for a loan modification but I would need the information from the questionnaire to see what that might be.

Summary of Information Chris Sent Me:

Original Purchase Price: $590,000

Current Market Value: $336,000

Lender: Bank of America (formerly Countrywide)

Loan Balance:$450,000 (mortgage is upside down by $114,000 over 1/3 the value of the property)

Monthly Payment: $3472 6.75% 30yr Conventional Loan

Monthly Gross income: $7000

Reason for Hardship: Had baby, wife quite work to care for baby.
(Additional note: This is a Doctor with a private practice. His wife worked for him and received a salary. When she quit they not only lost the income but he had to hire someone else and pay them more so his expenses went up higher than just the lost income.)

My email with the results:

Hi Chris,

Well I have some good news. You do qualify for a loan modification under the government guidelines.

I can imagine that it might be tight. That house payment is about half of the gross income. I have attached the report on what kind of modification you can expect on the government guidelines.

I only did the short form analysis but you qualify for a total monthly payment of $2,180.92 and that amount would include property tax and mortgage insurance. If you were to lower your payment to that amount would that provide the relief you need? I mean would that change the situation enough?

I only did the gross income analysis but for a complete evaluation on your individual situation I would also need to collect additional data to see if you would get a better modification on the cash flow model.

The attached Results of Database Analysis:

Current First Mortgage Payment With Principal and Interest: $3,472.00

New Possible Modified First Mortgage Payment With Principal and Interest: $2,180.92
Total Possible Savings Per Month: $1,291.08
Total Possible Savings Per Year: $15,492.96

Your Current Mortgage Situation:
Mortgage Payment (including taxes, insurance, HOA & Mella-Roos)/Monthly Gross Income: 49.60%

Recommended Mortgage Loan Modification:
Mortgage Payment (including taxes, insurance, HOA & Mella-Roos)/Monthly Gross Income: 31.16%

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Upside Down Mortgage Need Help

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Can I rent my condo since I am on dissability for six months NEW
by: Anonymous

I just recently been experiencing panic attacs, dizziness and sharp headaches. Because I tend to fall forward, my Doctor said I will be liability to the employer and rest for a bit until they figure out what medicine works for me.

I have modified my loan over a year ago and I am current, but I haven't paid December's payment and I haven't paid January's payment as well. I have a little money, but since I haven't received the disability check money is extremely tight.

My sister suggested that I live with her for 6-12 month until I feel better, and get out of all debt and this way she could also look eye on me. I found a nice trustworthy young man to rent the place, I still will have to come up a little bit from my pocket to cover the HOA, but it will be affordable for the time being. I am not doing this to make money, I just have not been working since the 21st of December.

On my modification contract I signed that the property must be the primary residence, but I am not doing this to make money, I just simply don't want to loose to forclosure and would like to maintain being the owner. Once, I am better and have a descent job, I would like to come back in a year or less be the proud owner again.

What can I do without crossing the Law? Please help.

Sincerely,

Desperate young lady.

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An answer for upside down jumbo loans NEW
by: AreYouUpsideDown.com

For those who read this post who are upside down in their jumbo non conforming mortgages (usually $417,000 or higher depending on where you live), there is an option seldom talked about on discussion boards like this.

The solution is an upside down back flip. It involves the purchase of your mortgage and then a refinance at 75-80% LTV. We are entering a perfect financial climate for these transactions.

These jumbo loans are the now the most concerning loans these lenders hold and the rate of default has ben proven to be high. They will accept low cash offers from legitimate third party purchasers who are interested in these loans.

Check out AreYouUpsideDown.com to learn more about this cutting edge technique.

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This is me as well
by: Anonymous

I am in the exact same situation. I am upside down on my home at least $75,000 and have a new baby at home with my wife not working and caring for the baby. I am current, and unfortunately my payment is only like 25 to 27 % of my gross income. To me it is still a hardship in that if I did not have this home, I could definatley afford a bigger house (for my family of 5) or pay significantly less for the same house. What would you suggest?

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