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Refinance for underwater home.

Bought home in 2007 for $335 @ 6% rate and 7/1 ARM.
Now the home value is $235K. Loan amount on the house at this time is $257K.
Called mortgage company and they declined to refinance as there is no equity in the home.
What I am supposed to do in this situation.
  • May 20 2009 - Orlando
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Answers (7)

If your Mortgage Company has exhausted all avenues to help you modify and the payments are placing a hardship on the family your next step would be to short sale.

The reason I point you to your Mortgage Company is they have access to different government programs and unless you have the difference between the current mortgage value and the refinance mortgage value no other lender will be able to help.

  • November 09 2009
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Your only other option would be if the loan was Freddie Mac. 

If it is not Fannie or Freddie, then you need to have some equity to allow for refinance.
  • November 09 2009
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Profile picture for StuckInFLForEver
Thank you all for answering my question.
Is there any thing change for refinancing lately.
I called my lender and they say the loan is with them not transfered to fannie.....
I am still looking to refinance and not sure how. I know there are lot of people like me in this situation. Trying to find out the best way to reduce mortgage payment.
  • November 09 2009
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I'm sorry rithvik to see that your value dropped $100k. Like others have said, a loan modification is probably your best bet. Unless you happen to have a 1st and 2nd loan to combine for that total loan amount. If you first is for $235k or less, then you may be able to refinance under the Fannie Refi Plus or Freddie Relief Program. But if thats not the case...you're looking at a loan mod. Best of luck to you.
  • May 21 2009
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  • May 20 2009
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ithvik,

You are like millions of others throughout Orlando and America and others who bought before this mess started.

3 choices:

First stay where you are and fight it out, second contact Help 4 Homeowners to see what they can do and third is to short sale, rent for a couple of years save up money and buy a new home.

Banks are addressing the issue of short sale buyers with new loan products, 2 banks in the Midwest offer loans now and a big player is on the verge of announcing theirs.

Broker Dave, Orlando
  • May 20 2009
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Try for a loan modification.  That will be your only hope.
  • May 20 2009
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