Refinance

[Walt333]

I'm attempting to refinance my mortgage (5-yr ARM adjusts early 2010) and I'm trying to figure out what I need to do to "compare loan offers". I'm upside down and cannot come up with a down. However, some lenders are telling me it may be possible.

The first thing I don't know is the actual house value. Should I call in an FHA appraisal on my own then apply for loans?

Do I have options for "restructuring" my mortgage? I was told by one lender that if they can't get a loan for me they will renegotiate the loan with my current lender at a cost of $1600. Is this a scam?

[Gunguy45]

Don't know about the rest..but the $1600 to renegotiate sounds like BS to me.

You can go to your lender yourself and try to do it, but if you have a job and aren't in default it may be tough. I did hear about some programs being offered where the Gov will pay your lender to renegotiate your loan..don't know details or requirements.

[Walt333]

I'm trying to understand the reason a lender would prefer not to renogotiate if the alternative is the homeowner walking on the loan, particularly with the govt encouraging lenders to do so. I just don't get the motivation there . . . wouldn't it be cheaper overall to work with the borrower to make it work?

[Gunguy45]

Again, this is only what I read and hear.

You didn't say you were going to default. If you have income and have been paying on time..then of course no lender would work with you.. why would they? They are getting their money. Now..if you just lost your job, with no prospects in the future..then sure..the lender may want to work with you as long as there is the possibility that you can make the payments. And the programs I mentioned may come into play.

I've actually seen scam reports where they advised people to stop paying the mortgage and send the money to the scammers... Or just stop paying until you get a default notice.....everyone says RUN RUN RUN from those people. They will make money..you will lose your house.

My main point was paying some ripoff artist to do what you can do yourself is a waste of money.

Its been 10 days since the last post..Gov money and programs can run out in that length of time as well as rates and economy changes. If it may soon become an issue..you need to work on it now. If the real estate market starts to change..they may not want to work with you at all. By the time all the court stuff is done, they could sit on it and sell it a year later and make money.

Oh...and the person you said would negotiate for you? I'd lay odds they don't lend their own money like a bank or credit union...they are a BROKER. So you pay them..a week later they say sorry..we did what we could.

Big difference between an actual lender...and a mortgage broker.

[Walt333]

I didn't say I was defaulting, but I'm trying to understand the lender's logic in refusing to work with borrowers. I've seen the scam reports too but I've also heard a lot of chatter that you're sitting on this huge rapidly depreciating investment and the bottom isn't in sight and it may never get back to what you owe if you bought in the 5-6 years prior to the foreclosure crisis . . . in short, you may never make a profit - for the sake of argument, why not walk and rent for a couple of years rather than continuing to pay taxes, insurance, interest on something you will most likely never make pay?

[djcheez]

walt your situation is very common and although i couldnt recommend walking away, if were in the same situations, i probably would. YOur home would go into foreclosure and when it is completed you would have to wait 2- 3 years before being able to get a new home loan. IF the lender wont negotiate, you have to do what is best fro your interest.

You cant go get an appraisal on your own, the lender must order it. But, if its an FHA appraisal it can be used by other lenders AND the appraisal is good for 6 motnhs meaning no other FHA appraisal can be done in that period, regardless of any market conditions.

there are companies who negotiate principal reductions but most are scams, especially if they ask for money up front. dont do it.

when comparing loan offers make sure loan amount and value is used is same and look at teh "800" items on the GFE. these are the lender fees with exception of the appraisal. THE least amount of costs under this section with a given rate will tell you who is cheapest. However, this is just an estimate and lots of games can be played with this. Also, cheapest isnt always the best.

[Walt333]

I appreciate your honest responses!

I don't mean any offense to this group by the following question, but can anyone recommend a more active newsgroup or forum for questions on mortages and related topics?