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Profile picture for BK1002

Is there a way for me to modify my current mortgage?

I am currently upside down on my current mortgage (much like everyone else). I owe roughly $185k and the home's value is $155k (and declining daily it seems). I have been looking to sell and move into a larger home for the last 1.5 years, but cannot afford to pay the $30k to get out of the loan + realtor fees, + down payment on a new home + closing costs, etc. I have excellent credit, little to no debt (other than my home), and have no issues paying/affording my mortgage. My current loan is not owned by Freddie Mac or Fannie Mae. Is there any way that I can modify my mortgage to reduce what I owe down to current market value?

  • July 10 2010 - Cumberland
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Answers (4)

Hi There!
I think that your best option will be to talk to your lender and ask them about a loan modification which can help in a situation like yours!  I hope you can figure things out!
  • July 15 2010
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Profile picture for wetdawgs
So sorry you are in this position, as are millions of other home owners. 

Reduction of principle was an attractive idea to many when proposed, but not happening in reality (except for rare events that make the news) because the banks don't want to eat the loss any more than you do.    As you have the ability to pay, even a short sale with difference forgiven is not likely.   (A short sale would stop you from buying a new home for a couple of years).

So, what to do now?   Some choices are:

a.  Save like a fiend so that you can cover the difference in current house, realtor fees and down payment on the new house.

b.  Enjoy your current house, and tell all your friends that you and your family are on the forefront on minimizing consumerism.  (My colleague lives with a spouse and 5 kids in his 900 square foot house and they are doing fine).

c.  Be patient.





  • July 10 2010
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Profile picture for sunnyview
I don't think so. The problem is that if you can pay, the bank will not let you short sale for less than you owe. Banks will generally only grant short sales or modifications if you have a hardship paying, but they don't care if the house is worth less as long as you keep paying.

The good news may be that your market may be done correcting with big drops here since your prices have given back almost all of it's bubble value and your foreclosure numbers here don't look bad so they shouldn't pull down prices in a big way either. You are not alone, but all you can do for now is wait out the market. Maybe you could consider renting out your house to move to a bigger one while you wait. It's not a perfect solution, but it works for some people.
  • July 10 2010
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Profile picture for Debbie Holmes
You can try to modify the loan but when I have looked into this for responsible clients the answer often seems to be NO.   You could rent your home out and buy the bigger home (if you have a down payment).  I would advice a property manager if you choose this course.    Mostly banks don't seem willing to help you if you can and have been paying on the loan.  Lenders do you have any other ideas?
  • July 10 2010
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