Hi All

Anyone know of any lenders doing Principle Reductions? Anyone have a principle reduction?

What incentive do the lenders have for given such a Loan Modification?

Thanks to all in advance.

Acesfull

Yes.

I don't believe any lender is doing a principal reduction on the first. Some are doing forbearances, which is not a discharge, but a forbearance.

I think it is time for the gready lenders to steep up to the plate.. They were sending there gready property appraisers out to inflat your home and get you that property or second mortgage value up. And now its all come tumbbling down.
You as a home owner should be screaming at your mortgage holder to reduce the principle .Don't pay the mortgage on a home that you owe 360K on. Get your lender to reduce the principle back to $295.000. before they were inflating your property value and coming up with all crazy kinds of creative financing. Tell them youwant to stay in your home, but with the current market price to be your NEW Principle balance. Good luck.
Acesfull

I realize it is fashionable and completely acceptable to blame only side in this fiasco, but is there not a limit?

Greedy lenders? Maybe. But don't forget greedy homeowners in that assessmnet. The ones that used their homes as ATM machines, just had to have a pool, knowingly bought outside of their incomes and willingly gave false information regarding income that is overinflated to lenders, those or house flippers with dreams of making quick and fast cash on a fantasy of a 20% ROI in 2 months after fudging numbers to be approved.

And you are leaving out taxpayers...........taxpayers foot a good chunck of the bill for MHAP. Are taxypayers greedy weasles for not agreeing to subsidise a homeowner 103% cash out re-finance they did during the boom so they could shop at Neiman Marcus and dine out every other night?

And people wander why the credit market are so obscenely tight and lenders won't lend! If you had money, would you dare lend money in this kind of mentality? I wouldn't. And that sux for the economy.

But know this.............for those that have ability to pay and out sheer rage take your suggestion of stop paying on mortgages..............it may not be so easy to qualify for a home in the future. One in every two new loans come from Wells Fargo-BofA-Citi-Chase...............and one out of every 10 dollars on deposit are held by Chase and BofA.

A consolidation has occured, will probably continue to occur with banks. The options of shoddy loans with easy credit lenders are gone. The possibility of looking the other way on previously foreclosed proprety even w/ a good credit score in an exceptionally tight lending market might not bode so well with the banks left standing after they too weather this storm.

Perhaps there is, perhaps not. It may be fashionable, but let's not forget that UNLIKE banks with their fractional reserve lending, the homeowner doesn't get to loan paper based on 10X (or more) their actual worth, yet gain REAL tangible assets from usury charged, only to then blow what remained of the nation's solvency by working a bailout. And lets not forget that the homeowner cannot simply print their own paper like a certain other party that happens to be....let's just say 'connected by a certain historic code of ethics' to those same banks.

Personally, I am done playing the blame game with people who made mistakes, except for the most egregious ones. This is far bigger than mere poor judgement on the part of some homeowners. I stated in no uncertain terms several years ago that this was going to sweep up everyone to some degree. In fact, back when these boards actually had some real discourse, this was a point of contention. I notice now that many people arguing against this point are quiet now. My, how things change.

Keep in mind that the false market drove the price of homes up for EVERYONE. What does this mean? Well, for instance it means that that neighborhood of decent starter homes that would have otherwise fit a first time home buyer's budget was likely becoming occupied with the dredge of humanity or getting gobbled up by wannabe investors flush with leveraged credit, subsequently forcing decent people who would rather their kids not be mixing with the trash to put off buying (for about 5 or 6 years as it turns out in retrospect) or seriously step up their purchase price, which is what many of them did. This may not have been the case for some, but it was certainly the case for many that I have discussed the issue with over the interim. That's what we came up against in our region when we first went home shopping.

As for the OP's question: I wouldn't count on principle reduction. These banks received a "bailout" for reasons that haven't yet come to fruition. But you can rest assured that one of the reasons was NOT to take care of us simpletons as was implied, alleged and otherwise propagated. We're still on the hook.

Though VERY reluctant and only in an absolute case of last resort,
in some extreme circumstances where the whole market is so hopelessly under water.
Yes some lenders essentially have no choice, and they have lowered principal.

It has to be a perfect storm, in places like SouthWest Florida and Homestead, where it has been completely overbuilt and there just aren't any buyers... they can foreclose, then they are the ones stuck with one property among many many others for which there just aren't any buyers.
Only in such extreme cases where even the most out of touch Loss. Mitigation rep. can clearly see that they will be totally stuck do they actually reduce principal.

Most cases they tend to add on the arrears.

Everyone has their advantages. Lets not forget homeowners have consumer protection laws. They can file BK on their debts. In essence, they can max out their credit cards, take out cash from their homes above 100% and not pay it back. When the market changes and the bubble bursts, after exhausting every last dime of equity in their home, maxed out their cc's, with brand new cars that come with brand new car payments, some homeowners just walk from their home after not paying their mortgage for 12 months right before a foreclosure, screaming the whole way how wicked and greedy the banks are without acknowledging their own actions and hand in the situation. Happens everyday. The writedowns lenders have incurred are in the billions.

I see things that would make the average persons jaw drop that i wish the news media would report on where homeowners are doing outrageous activities that the lenders or taxpayers pay for in these situations.

I'm not saying banks are saints. But neither are some homeowners. The idea of the victim mentality with only one side being pummeled is not remotely true.



Exactly. Market prices shot up to the roof in many locations pricing many homeowners out of the market. Is it better to hand-out liar loans and use other means to artificially prop-up the mareket or is it better to let market forces prevail and allow prices to adjust downwards so homeowners priced out can now come back to the market and buy a home when the market corrects itself?

I'd rather homeownership be a possibility for the Avergage Joe's without liar loans or risky loans. I don't support keeping housing so expensive the average person has no chance of buying unless resorting to liar loans. A bubble bursting in real estate isn't such a bad thing. Sure, many will get burned, but imho, it opens the doors of homeownership again to many more priced out during the bubble and could make home ownership affordable again.

How about a Forensic Loan audit to find some infractions to "FORCE" the lender to play ball....and quicker

Hi All

Now that I am three months behind, maybe AHMSI will put in contact with someone in the good old USA instead of some robitic type person in INdia.

I have made a proposal for AHMSI and myself that we could both live with. A win= win so to speak.

Here is my story. Being out of work 3 months. Mortgage in arrears to the tune of $10200.00
I was forced by my employer to take yet another pay cut.

The first in July of last year from a weekly salary of $2500.00 per week. to a reducded salary of $1640.00 per week.
I then requested AHmSI to assist me with a Loan Mod. It took some time but in Dec 08 my new mod was approved.
They add the three months of arrear to the back end of the loan. They also reducded my interest rate from 8.25% to a more affordable rate of 5.25%. Saving me about 573.00 per month. I was happy.
Now comes another off year for business and I get laid off for 3 months. Now I am rehired at a weekly salary of just 1250$ per month another drop in salary.

So Here is my proposal to AHMSI.

1= Reduce my principle balance by 25%. Bring down my present principle balance of $361177.00 to an affordable balance of $272000.00
add on the 10k of arrears and $500.00 for late fees. My new principl balance will be around $282500.00. This balance would be more inline with the present property values in my area,

Now take the new principle balance of $282500.00 and extend my term from 30 years fixed to a 40 year fixed at a rate of 4.78%
These new terms and reduction would lower my current mortgate of $2678.00 per month to a more affordable $1964.00 including tax and interest. This new payment would shave close to $718.00 per month from at payment.

Now the key is to get AHMSI to do such a loan for US. We want to stay here. But I will be prepared to ride this process thru to the last minute. I will file for every extentsion, I will ask to see all the docs including the Original Note.
I intend to put up a good fight. You all could do the same. Fight hard, read and learn. The old school netward is different now and the old scholl rules of thumb no longer apply. You must dive for every loose ball to keep your home and get better terms on that home.
Keep up the good fight and God Bless you and your Family.
I will be posting my progress or lack of from time to time.
ThANK YOU ALL,
ACESFULL

WOW!!! Sounds like the banks would get a better deal going through foreclosure. You already got one loan mod and are demanding another with an extremely low interest rate while you have bad credit.

Good luck!
Tammy

Hi Tammy
I am not demanding a principle reduction. I am simply asking for one. If you don't ask you get nothing.
And Tammy, the lenders don't make money on foreclosures. They would be forced to sell the home anyway thus incuring costs plus the property value is under 270k. Not to mention in my state of NJ, I could technically live here free of mortgage payments for 18-20 months if I excerise all my options. A home must be treated like any other business. I am just trying to negociate a better deal.
Oh an I don't have bad credit. 646-656-659 an that is with the missed payments from 08. That I might add, my lender would not give me a modification unless I was behind on my mortgage. So please, until you have a clue about what you are saying do some research and get your head out of the sand. Its just business.
Acesfull

Hmm....that story sounds intimately familiar. And one thing is for sure- if you think that 2009 is an "off" year, just wait until 2010 when this thing gets into full swing. I would recommend planning on and coming to terms with the possibility that your $1250.00/wk may well end up being something to the tune of $500.00 before all is said and done, and that is assuming that you can maintain employment. I too was bringing home $8000.00/month back in 2006 (and busting my arse to do so). Now I am taking home $2000.00 and simply cannot find the business necessary to change this direction. Things started hitting the skids in late 2006 and have declined since. And from what I have gleaned from the majority of my customers, my experience has been the norm, not the exception.

I am coming closer to the point of simply saying "screw it" and saving whatever cash I can while I am still bringing it in because if you think that there is a property fire sale going on, check out employment. If you think this sounds extreme, maybe it is, but I will say that if you look around and pay close enough attention, you'll see what I am saying becoming much more mainstream.

For now, you can ask your lender anything you want, but like the other poster stated, in bankland, they are better off foreclosing on you. After all, they are flush with the funny money that their Congressional pawns printed up for them.