Mortgage readjustment issues

[FlaHawkFan]

A couple thoughts here. You're confusing a paying customer with one behind in payments and how that translates to bank action / inaction. No bank or lender is going to do anything if you are still making the monthly payments - period. Even if you are paying a little late and paying the late fees the terms will stay the same. And banks will reduce principal, if the property is sold via short-sale to another party. Think about it - if the rules were changed and lenders said they would reduce principal for anyone that needs help what do you think would happen? It would be abused and suddenly everyone would say they have hardship and ask for a reduction in principal. The only way to really prove hardship is missing payments. Rather a better solution would be to allow refinancing under current rates @ 30 year fixed which would lower the monthly payments for many who suddenly find themselves in Tater's position being just a couple hundred bucks short each month. However, given the recent mortgage meltdown and difficulty getting financing, lenders have a tendency to run from this situation and refuse to refinance because the borrower is showing signs that problems may lay ahead. Bottom line - no easy solution and many borrowers like Tater find that the so-called government help programs are really worthless.

Fluff, the system is being abused anyway for God's sake. People who are perfectly capable of making their payments are stopping payments so they can do short sales. Why TF should that be allowed? I'll give you an example. Our neighbor here in Charlotte was and is perfectly capable of making her mortgage payments. She bought her house here five years ago figuring it would be her retirement home. But as she got closer to retirement this year she re-thought her plan and decided to buy a new place in Charleston, SC. She was quite upside down on her mortgage here and her bank wouldn't discuss the possibility of reduced principal or even a short sale so -- even though she's fully capable of making payments on both houses -- she stopped making her payments on her Charlotte house. She doesn't care whether her credit is scorched because she has no future plans for any large purchases (car, house, etc.) so she can totally game the system. She has her loan on her new house and doesn't care if the old one goes to foreclosure. That is gaming the system and lots of people are doing that.



And you know what? As much as some people made bad decisions by buying homes they couldn't afford, the banks who lent money for those purchases made equally bad business decisions by determining that the bubble wouldn't burst, and that the lender could sell for more than the outstanding loan balance in the event of a foreclosure. So why should the borrower bear full responsibility for the bad decisions? That's certainly what you're advocating.



I agree there are no easy solutions. We certainly didn't game the system. We paid our loan in full even though we could have bailed. We simply aren't built that way. But you know what isn't fair? If that had been an "investment" property for us, we could have claimed our loss as a tax write-off. However, because it was our home for several years, we're not allowed to do that.



The whole system is broken and there are no easy solutions. But to say people would game the system if principal reductions were permitted is silly because they're totally gaming the system as it is.



Wow, that was a long and unsatisfying rant. Sorry about that everyone.

 

[Kerfuffle]

Ohhh, good point.

I will ask them about that.

I basically already explained the situation to my pension company (Putnam) so they do know the reason I need to transfer/pull out funds.

Maybe you have to specifically ask about a hardship allowance for them to offer it so it's worth a try.

Yes there is a hardship allowance - I mentioned that in my post earlier in the thread. It softens the blow with the penalty/tax hit. Be prepared to show hardship though - may be tough if all payments have been made.

 

[ginnie]

The only thing right now that makes it possible for us to keep our home is that we rent out the basement - that $600 is the difference between sinking or swimming.

We owe $40,000 more on the house than when we first bought it 20 years ago! Most of the money went into upgrades - roof, siding, furnace, windows and doors etc., but having a son in University has an impact too.

 

[jakobeast]

So. I don't want to derail the thread. But I was hoping to start the home buying process in the next year or so.... Bad idea? Or is this only effecting people who's had the bottoms drop out of their home value? I was under the assumption that this is still a good time to buy, but I also don't want to worry about something like this then happening to me?

Mass, when you talk to any real estate agent, they will tell you it's a great time to buy, because anytime is a good time to buy.



Before the house buying process, make sure you have zero debt. pay off credit cards, if ya have em, get rid of car payments. It is harder then ever to get a loan. The banks aren't throwing money around like they used to. Shop around for a loan. Do NOT see a mortgage broker. If you have a credit union, I recommend checking them out for sure. Save some money too. The more the better.



When you do start the process of everything, lemme know. I may be able to help more.

 

[MassHavoc]

Mass, when you talk to any real estate agent, they will tell you it's a great time to buy, because anytime is a good time to buy.



Before the house buying process, make sure you have zero debt. pay off credit cards, if ya have em, get rid of car payments. It is harder then ever to get a loan. The banks aren't throwing money around like they used to. Shop around for a loan. Do NOT see a mortgage broker. If you have a credit union, I recommend checking them out for sure. Save some money too. The more the better.



When you do start the process of everything, lemme know. I may be able to help more.

That's all great advice, how do school loans play into it? that's really all we have that I'm worried about. We have no other debt than some credit card which is only high because we are single income. Come 5 months though and our income at least doubles. So that will be the first to go.



I will definitely hit you up and probably the rest of the board when the time comes. The whole damn process/situation is beyond daunting to me. I'm glad to hear that anytime is a good time to buy. My credit is good, so hopefully I can only make it better by the time we are ready. Ideally in about a year. But I don't know if that means I should start the process sooner than that.

 

[Kerfuffle]

Fluff, the system is being abused anyway for God's sake. People who are perfectly capable of making their payments are stopping payments so they can do short sales. Why TF should that be allowed? I'll give you an example. Our neighbor here in Charlotte was and is perfectly capable of making her mortgage payments. She bought her house here five years ago figuring it would be her retirement home. But as she got closer to retirement this year she re-thought her plan and decided to buy a new place in Charleston, SC. She was quite upside down on her mortgage here and her bank wouldn't discuss the possibility of reduced principal or even a short sale so -- even though she's fully capable of making payments on both houses -- she stopped making her payments on her Charlotte house. She doesn't care whether her credit is scorched because she has no future plans for any large purchases (car, house, etc.) so she can totally game the system. She has her loan on her new house and doesn't care if the old one goes to foreclosure. That is gaming the system and lots of people are doing that.



And you know what? As much as some people made bad decisions by buying homes they couldn't afford, the banks who lent money for those purchases made equally bad business decisions by determining that the bubble wouldn't burst, and that the lender could sell for more than the outstanding loan balance in the event of a foreclosure. So why should the borrower bear full responsibility for the bad decisions? That's certainly what you're advocating.



I agree there are no easy solutions. We certainly didn't game the system. We paid our loan in full even though we could have bailed. We simply aren't built that way. But you know what isn't fair? If that had been an "investment" property for us, we could have claimed our loss as a tax write-off. However, because it was our home for several years, we're not allowed to do that.



The whole system is broken and there are no easy solutions. But to say people would game the system if principal reductions were permitted is silly because they're totally gaming the system as it is.



Wow, that was a long and unsatisfying rant. Sorry about that everyone.

No lender is going to reduce principal for someone making payments on time - period. And yes borrowers do have responsibility here. I feel bad for those who are trying like Tater and the recession is causing a loss of income that makes it impossible to keep up in the long term. But there are plenty of others who bought recklessly with no regard to whether they could make the payments and unfortunately those are the ones first in line for the 'help' out there it always seems. The problem is there is no one-size solution to help those like Tater without also helping those that shouldn't have owned a home in the first place. How can a lender decipher the two? They can't.

 

[winos5]

Mass, when you talk to any real estate agent, they will tell you it's a great time to buy, because anytime is a good time to buy.



Before the house buying process, make sure you have zero debt. pay off credit cards, if ya have em, get rid of car payments. It is harder then ever to get a loan. The banks aren't throwing money around like they used to. Shop around for a loan. Do NOT see a mortgage broker. If you have a credit union, I recommend checking them out for sure. Save some money too. The more the better.



When you do start the process of everything, lemme know. I may be able to help more.

Definately agree with putting money down up front on your home. 15% down and you can ussually get rid of the PMI and escrow account for property taxes and home owners insurance. Why give that money to the bank to pay your bills when you can put it to work for you? Doing that also stops your payment amount from changing year to year. Best thing we ever did concerning our mortgage was getting rid of the PMI and escrow account.

 

[jakobeast]

Definately agree with putting money down up front on your home. 15% down and you can ussually get rid of the PMI and escrow account for property taxes and home owners insurance. Why give that money to the bank to pay your bills when you can put it to work for you? Doing that also stops your payment amount from changing year to year. Best thing we ever did concerning our mortgage was getting rid of the PMI and escrow account.

15% ain't bad, but we are seeing a lot of banks pushing for 20%. It also helps if the market keeps dropping.



It hasn't bottomed out yet folks. There are literally millions of properties in shadow inventory. depending on who you talk to there is anywhere between 2 and 6 million properties more than 4 months behind in their mortgage payments. I consistently see properties that haven't had a payment made on them for 18 months or more.



The other day I got to break into a multi-million dollar property in Mettawa. it was in pretty good shape. Everything was still there which surprised me. My next stop was just an average house in Wheeling. 3 bed, 1.5 bath that was decent. It isn't just one area, one type of people, one kind of house. This affects everyone.

 

[Kerfuffle]

The other day I got to break into a multi-million dollar property in Mettawa. it was in pretty good shape. Everything was still there which surprised me. My next stop was just an average house in Wheeling. 3 bed, 1.5 bath that was decent. It isn't just one area, one type of people, one kind of house. This affects everyone.

Are you the eviction guy the banks send to reclaim foreclosures?

 

[Tater]

Are you the eviction guy the banks send to reclaim foreclosures?

No, just a peeping Tom.

 

[Ymono37]

Are you the eviction guy the banks send to reclaim foreclosures?

Nah... he's the guy the banks send to scout the property, see if it's still inhabited, and re-lock/key the doors if necessary.



Jako has got some great fucking stories about his job...

 

[jakobeast]

Are you the eviction guy the banks send to reclaim foreclosures?

Kinda. I work for a real estate agent that does nothing but foreclosures. He pays me to do the shit he doesn't want to anymore. I also do cash for keys, which I like doing so much more.

No, just a peeping Tom.

Why can't it be both?

Jako has got some great fucking stories about his job...

I really do love my job. Always an adventure. A lot of people say that tongue in cheek, but I am serious. I never know if a basement is flooded, there is still a kitchen in the property, if someone is still living there, or if someone is squatting.





So much fun. I feel like a detective. That wears shorts.

 

[Tater]

Kinda. I work for a real estate agent that does nothing but foreclosures. He pays me to do the shit he doesn't want to anymore. I also do cash for keys, which I like doing so much more.







Why can't it be both?







I really do love my job. Always an adventure. A lot of people say that tongue in cheek, but I am serious. I never know if a basement is flooded, there is still a kitchen in the property, if someone is still living there, or if someone is squatting.





So much fun. I feel like a detective. That wears shorts.

I thought you repaired propellers? No?

 

[Kerfuffle]

I really do love my job. Always an adventure. A lot of people say that tongue in cheek, but I am serious. I never know if a basement is flooded, there is still a kitchen in the property, if someone is still living there, or if someone is squatting.



So much fun. I feel like a detective. That wears shorts.

You never know if someone has a gun in there either waiting to have a 'showdown' with the person coming to reclaim their property. Gotta be careful.

 

[R K]

No, just a peeping Tom.

Aint that the fucking fact!

 

[R K]

Kinda. I work for a real estate agent that does nothing but foreclosures. He pays me to do the shit he doesn't want to anymore. I also do cash for keys, which I like doing so much more.







Why can't it be both?







I really do love my job. Always an adventure. A lot of people say that tongue in cheek, but I am serious. I never know if a basement is flooded, there is still a kitchen in the property, if someone is still living there, or if someone is squatting.





So much fun. I feel like a detective. That wears shorts.

I think your job would have pros and cons. On one hand sure, you are doing it, but on the other, these are people.



I don't know where I quite stand on that. I don't think I'd do it.

 

[BlackHawkPaul]

Kinda. I work for a real estate agent that does nothing but foreclosures. He pays me to do the shit he doesn't want to anymore. I also do cash for keys, which I like doing so much more.







Why can't it be both?







I really do love my job. Always an adventure. A lot of people say that tongue in cheek, but I am serious. I never know if a basement is flooded, there is still a kitchen in the property, if someone is still living there, or if someone is squatting.





So much fun. I feel like a detective. That wears shorts.

I really would like to follow you with a film camera if your boss would allow it (legalities).

I'm serious.

 

[MassHavoc]

I really would like to follow you with a film camera if your boss would allow it (legalities).

I'm serious.

I'd rather it be Mike Rowe.

 

[MassHavoc]

By the way, what are short sales?

 

[R K]

By the way, what are short sales?

Selling the property for less than what you owe on it.



Say you owe 200k but find a buyer who is willing to pay 180k. The Bank then would have to approve the sale.



It's a pain in the ass.



If someone was going to do a short sale the best would be to do a deed and lieu, which means you give it back to the bank basically.