My lemder is Indymac who has faultered. The house (3200 SqFt) is nice, more the wife’s pick, but is now a financial titanic. Is it possible to renegotiate my mortgage to a lower amount?
My lemder is Indymac who has faultered. The house (3200 SqFt) is nice, more the wife’s pick, but is now a financial titanic. Is it possible to renegotiate my mortgage to a lower amount?
Has anything changed with your income?
If so, yes. But you must start calling your bank.
Get another wife to help on the payments.
No it is not possible when you agreed to buy the property at a said price that is the end of the transaction.Your mortgage provider has payed the previous owner the amount you agreed and will not accept any less back from you.Your only option would be to ask for a payment holiday if you have genuine financial difficulties, if not then you are stuck with it.
In normal economic circumstances I would say there is no way for you to negotiate your mortgage lower. But, these are not normal times. It is definitely possible to negotiate a “short” payoff on your home. I have seen lenders in the past 14 months take as much as a $250,000+ hit on pay off amounts just to get the loan off their books (these homes had mortgages of 1.5-2.5 million though).
A couple things you need to know though before you start asking for your lender to forgive debt.
If you are not selling your home:
*you must currently be in default
*Most will require you to submit financial info to prove you cannot make your payment or are currently in a “hardship”
*they will require you to pay off their lien which will be fairly difficult since you would have to be in default on your current mortgage. You can only qualify for new financing if your late payments happen AFTER a rate adjustment and your payoff/new loan amount is below 712,000 i a “high cost” real estate market and you can document your income and some equity after the short payoff. If you currently have a fixed rate you will not qualify.
If you are selling your home (much easier option):
*a lender will require you to submit and actual offer from a buyer that specifies a price for them to consider a short sale. if you have 2 mortgages both lenders must agree to the short sale. Getting a short sale approved by a 2nd lien holder is usually a little easier because they are at a higher risk.
Some things to keep in mind though. Although legislation passed earlier this year prevents lenders and the IRS from taxing you on the deficiency (amount of your loan forgiven) as ordinary income, the lender can still report and hold that deficiency as a balance owing on your credit report. This can come back to bite you if you try to get another mortgage anytime in the future within your states statute of limitations on mortgage debt. If the lender decides to report the deficiency and it’s within your states statute of limitation time frame you would be required t0 pay that off before any lender will finance a new home for you. If it’s beyond your states statute of limitations then you can fight to get it removed (which by law they have to, though it may take a lawsuit to enforce this).
Now, each lender is different. Lenders that are in bigger financial trouble are more likely to negotiate because they need to clear their books. But don’t go in thinking they owe you or threaten them. Most will just assume foreclose on the property since it’s all the same to them since they lose and have to “write down” debt either way. Also realize that it is in actuality “real” money being forgiven and does affect other people and the economy as a whole.