Unable to refinance an 80/20 Mortgage?
by Mortgage Rates on Saturday, September 18th, 2010 | 4 Comments
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The white house has issued guidelines for what lender should do with upside down loans; nothing is mandatory for the lender to work with you in modifying the loan though many are willing to work things out
You are stuck, just like millions of others. You bought a house you could not afford at the top of the market and with the most dangerous of mortgages. You were counting on the property appreciating in value and further declines in already historically-low interest rates and more money in the future to pay a real mortgage (principal, interest, taxes & insurance). You bet wrong on every count when even one wrong bet would have killed you.
In order to refi now, you probably need a huge cash infusion to get to a mortgage of no more than 80% of present market value, sufficient income to pay a real mortgage (not just interest-only), and superior credit ratings. Either pull that off or lose your house.
The so-called “programs” are only for people who have fallen behind on mortgage payments and are in danger of foreclosure. There’s nothing for those who need a whole new mortgage like you do.
if both loans are with Wells and they were the original lender they may be the only one that can help. Now if they assumed a note(s) from another lender or bank then they have no responsibility to help at all as now you are asking them to refinance you over the 100% of value and that is a risk they just don’t want in their portfolio. See if you default now they would loose on the 20% but not the whole loan. Which one would you want to insure. The only other thing about the program that you don’t have now is the fact that 80%/20% loans were done to avoid Mortgage Insurance. If you had MI then they would or could be forced to do a refinance. There is no MI company out there that will take you or any one else on at this point.
Sorry but you are stuck.
I am a mortgage banker in TN
Try to get a mortgage loan modification. The Federal Government set up to educate homeowners about the loan modification process. See http://www.makinghomesaffordable.gov.
Basically there are 5 requirements to qualify for a loan modification. They are:
1. The home needs to be the homeowner’s primary residence;
2. The mortgage must be less than $729,750;
3. The homeowner is having trouble making their existing mortgage payment;
4. The mortgage was established before January 1, 2009; and
5. The homeowner payment on their first mortgage (including principal, interest, taxes, insurance and homeowner’s association dues) is more than 31% of their current gross income.
Homeowners don’t need to pay a company to obtain a loan modification. However, sometimes it can be better to have someone, such as a lawyer or credit counselor, negotiate on your behalf. A good strategy is to talk to as many experts as you can prior to contacting your bank. Many of these services will give you a free consultation.
A good site to begin can be found at http://www.credit-hub.net/loan-modification where I entered some details about my current mortgage and the company got back to me multiple loan modification proposals.