Profile picture for LadyC2

I owe more than its value still make the payments. Anyway to correct the mortgage amount?

  • November 19 2009 - Glendale
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (11)

Oh joy, we have a new C&P king that thinks people really want to read what they can Google themselves. I predict he will be asking and answering his own questions in a  matter of moments!
  • November 19 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Dear LadyC2:

I understand how difficult it can be to make payments when you owe more on the home then it is currently worth.

The market does have its ups and downs. Unfortunately, we are in the down time. If you decide to sell your home, you may want to consider a "short sale".

To avoid a foreclosure you may want to consider selling on a short sale rather than allow the bank to take the house. There are several advantages to a short sale:

What is a 'Short Sale'? The "short" sale definition, which deals with the bank's willingness to release their lien or security interest in a home if it is being sold "short" or for less than the amount that the owner/borrower owes on the mortgage loan to the bank(s).

Behind the scene, the bank(s) (one or two) are negotiating with the owner/borrower for the owner to pay the difference or a portion of the difference between the sale price and the amount on the loan (the short amount). This negotiation is somewhat invisible to the prospective buyer, but is the main reason that the offer/purchase process can take so long (months).

The bank may eventually send the property into a foreclosure if the owner does not agree to sign a note to pay a portion of the "short" amount. The signing of a short sale note by the owner/borrower will not be secured by a mortgage lien associated with the home as it has been released when sold to the new buyer. The net effect of the note for the short amount lowers the amount the bank(s) will have to "write off" or take a loss on for the amount the owner/borrower owes. Note, a foreclosure or short sale, does not prevent the bank from continuing to collect from the owner/borrower, especially if their financial situation improves after the home is foreclosed upon or sold.

The negotiation in the short sale process has several major goals:

1. Owner/borrower looks to sell home for less than is owed and have the bank(s) release their lien on the property
2. Owner/borrower looks to protect their credit rating somewhat in a short sale as opposed to a foreclosure
3. Owner/borrower asks the bank, based on their financial hardship, to write off the balance owed or write off a portion of the balance owed after the short sale proceeds are paid to the bank
4. Bank looks to prevent a foreclosure, expecting the home to get a higher price with the owner taking care of the property. Many foreclosure properties are abused by angry owners. Conversely, a short sale property tends to be in better condition.
5. Listing agent or hired negotiator for owner/borrower presents offers received to the bank(s) negotiators and works on an exit strategy where the bank will write off all, some or none of the difference between the selling short sale price and the amount that the owner owes on the property.

Banks are extremely backed up in the short sale negotiation area. Often they are in no rush to do anything. This allows the homeowner to continue living in the home while the lender is assigning the case internally to a loss mitigator.

May I wish you the best and hope you have a nice Thanksgiving.

Regards, Jeff

  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I am drafting a letter to my bank for them to correct the amount in my savings account. The guy 2 account numbers away from mine has way more money in theirs than I do! 
  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I like the word "correct" as if it was somehow an error that the bank cut a check for that amount to the seller.
  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

"... ask your lender to reduce your principal balance based on market conditions ..."
" ... It is possible, I have done this for some of my clients ..."

If I had a nickel for every time someone came on here playing the fictitious (I have done it for my clients) card, I would use all my new found money to refinance all of you!

Principal reductions for everyone! 
  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Am I getting this right?  You paid fair market value for your house at the time it was purchased and now that it is worth less you want to owe less?  Do you ask Mastercard or Visa to reduce the amount you owe because some of the items you bought previously are now on sale?

If you are experiencing a hardship and having difficulty in making your payment you can try getting a loan modification to reduce payments but you still owe what you borrowed and agreed to pay back when you closed on the house.

A house is a place to live that may be an appreciating investment but there are no guarantees.  If you can make the payments, consider yourself in a good place.  You have a home.

  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Clearpoint

LadyC2 thanks for the email!

I now know where you are coming from and understand your original statement better. 

I am the first to say that it's not fair that those who can't afford their mortgage, misrepresented their actual financail ability, or speculated seemed to get help first.  With the help coming from those that did everything right.

  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Clearpoint

In Arizona the percentage of homeowners who owe more than their homes are worth is extremely high.  Should banks lower what everyone in AZ owes to match what the home is worth?  What if prices go down more as predicted to do in 2010 and 2011, should they do it again?

They did not sell you a house, they loaned you money.  If you had a real hardship than it may be beneficial to the lender to modify the terms of your laon but a principal reduction is the last thing on their mind.

  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I am not sure what you mean by "correct the mortgage amount". I am thinking you want to ask your lender to reduce your principal balance based on market conditions.
1st - It is possible, I have done this for some of my clients.
However it really is different from lender to lender. I would call your mortgage company and ask to speak with their settlement department. Explain your situation. Most likely they will give you a list of items you need to prepare and forward to them. They will review it and give you an answer.

Good luck.
  • November 19 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for wetdawgs
Mortgage modifications may be available if you have had a substantial hardship, but if you are still able to pay without a hardship, you owe what you borrowed.  

When we purchase a house, there is no guarantee prices will go up.  Sometimes we lose, and it can be painful. 
  • November 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Clearpoint
Why is the mortgage amount incorrect?  Your mortgage amount has nothing to do with the current value of your home.  If it did, that would be terrible when your home increases in value you would owe more than you borrowed!
  • November 19 2009
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.