Profile picture for Keith m

I bought my house 240 now worth 190 what should I do to lower my interest rate and payment?

  • January 29 2009 - Winchester
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Answers (14)

Profile picture for novatopro

Why should the bank eat the loss? I've got the only two real options that you have because there is NO WAY that your going to get your loan modified.
1: pay down the loan and your monthly payment will decrease.
2: Walk away from the house and ruin your credit and chance of ever financing a home again.

Its really that simple.

This talk of mortgage modifications is one of two things.
1: Someone trying to get money out of you.
2: /Plans that have never come to fruition and in reality end up helping .000001% of people in trouble.


  • February 02 2009
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Profile picture for sunnyview
I can't blame you. However, I am not sure your lender will give your request top priority. You can contact them to ask for a rate adjustment, but you may be asked to give some proof of hardship under your current loan terms. Ask them and see what they say.
  • January 30 2009
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Profile picture for Keith m
No hardship at all! Just want a better payment can you blame me?
  • January 30 2009
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Profile picture for JB2003
just because the value has decreased should not have affected your payments or ability to make the payments, no?  Is the issue really that your mortgage rate adjusted and now the payments are unaffordable?  or did you have an event that changed in your income/ability to make the payments?  That is the real question and what you need to discuss with your lender if this is in fact the case, the fact you are upsidedown really is not the cash flow issue. You really need to decide if despite the current upside down situation if this is an investment worth holding onto or not.  Did you intend to own and live in the home for the long haul?  if so and it is not an affordability issue with your mortgage, 10 years down the line with nominal market appreciation(like a "normal" real estate market) you should be fine and have built some real equity.  If it is an affordability issue then it is worth looking into a possible loan modification/shortsale scenario with your lender.  Best advise start talking with your Lender before you NEED to.  If you have time on your side there are lots of ways a good lender can work with you for both of your benefits. 
  • January 29 2009
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call your lender and explain you hardship.
you will want to stress hardship over being upside down...
go with do to inflation and cost of living i find myself unable to keep up ect.
they will review and then asign your case to an in house worker and get in touch with you to fiuther you application.
  • January 29 2009
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Profile picture for SoCal Engr
So, is the "real answer"...

Since the lender stands to lose money in either a foreclosure or loan modification scenario, the key is being able to identify potential violations of the Consumer Protection Statutes and/or Truth in Lending Laws (i.e., hope the loan was originated by an inept or corrupt lender), increasing the lender's potential exposure to further litigation if they don't agree to a modification.

So, effectively, this turns in to a pre-trial settlement with the negotiated damages realized in a modified loan amount/terms.
  • January 29 2009
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Okie. Here we go:

We have a team of expert underwriters and expierenced lawyers convince lenders to offer new and better terms that will allow borrower to avoid dramatic payment increases while being able to comfortably afford their loan payments and avoid default or foreclosure. Along with focusing on every homeowners personal hardship story, they build a case file around violations of Consumer Protection Statues and Truth in Lending Laws that may have occured during the loan process.

The definition of loan modification is as follows:

A loan modification is an agreement that is negotiated between a borrower and his/her current lender to alter the terms of the current loan. The goal of loan modification process is to convince the lender to offer new and better loan terms that will allow the borrower make affordable loan payments and avoid the increase in payments that lead to default or foreclosure. Although most lenders are willing to enter into discussions directly with homeowners regarding a possible loan modification, the process can be time consuming and difficult. A lender's loss mitigation department is staffed by experienced negotiators who know how to pressure consumers. Sometimes, it seems like the lender has all the leverage. Often times, the results can be less than favorable for the homeowner, and can even put the homeowner in a worse situation.


Did that help? :)


  • January 29 2009
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Profile picture for sunnyview
What would the OP have to do to start the process of getting a loan mod? Can they go through their original lender or do they need an agent to facilitate it? I think there is a lot of confusion about what a loan mod really is, what it means long term financially, how it affects your credit and how to get one started if you think you need one. Maybe you can explain. I would love to have a link to a thread that explains to use as information for people who ask about it.
  • January 29 2009
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Sunnyview,

We actually do loan modifications at our company, and in our case we either provide the person with debt forgiveness or a modification to their rate. So there are some options out there.
  • January 29 2009
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Profile picture for sunnyview
You might also be able to get a loan modification, but be careful. Often I have read that the principle balance owed increases and the payment is only low for a short time like 2-5 years before you will be in the same situation. You are looking for a good long term solution. If you can handle the payment on the 50K more that you owe it may be worth considering depending on the values in your area. If prices are still dropping, you will have to decide what your total negative equity might be at the end of the next two years based on historical prices pre bubble. chart for SoCA No decsion you make will be terrific. this situation is bad and many people are dealing with it just like you are trying to. Do your research, think about your long term goals and the short/medium term effects on your credit and make the best decision you can.
  • January 29 2009
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I would try going with a loan modification. That's about the only thing you can do to lower your interest rate and or payment, other than walking away from the home. You are 1 of 1000's in this same situation. Best of luck!
  • January 29 2009
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Profile picture for sunnyview
I would consider a short sale. If you are going to have to wait years to recoup the money you owe on a mortgage, that may be your best bet. In this market, you may be able to get a loan modification, but after the period of lower payments or interest, you would be back under the negative equity again. A short sale will affect your credit negatively for a minimum of 3- 5 years depending on the lender, but that may be your best option. At least with a short sale, you are trying to help the lender get back the money that you borrowed. It is the most honorable way to go in that way short of just remaining in your house 200K underwater. Look into it, make sure you understand the effects on your credit and see if it will help you move on to a better long term financial picture.
  • January 29 2009
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Profile picture for single mom 3
ha mine is even worse than yours @ over 200,000 upside down. Im trying to figure out a solution too. Walking away seams tempting. Let me know if you find an answer. 
  • January 29 2009
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Profile picture for Keith m
No answers WOW
  • January 29 2009
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