House is listed for sale, is it possible to miss payments and do loan modification?

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We just streamline refinanced 2 months ago to make it easier on our monthly mortgage payments. However, my husband got laid off and is no longer able to work since he has been diagnosed with vascular dementia. So, we decided to speak to our realtor and put up our house for sale.

With the bills piling up, I know I will not be able to pay the next month’s mortgage and most likely at all. Can we miss next month’s payment even if our house is listed for sale? If we do, what would happen if we missed a couple of payments, and a buyer comes along?

Can we ask our lender to do a “loan modification” if we become delinquent, but our house is listed as for sale.. should we let our lender know?

Thank you in advance… hope you understand all my questions, as I am not a native English speaker.
Please report “asii,” he is a spammer.

There are lots of offer regarding streamline for our first house to lower down the current rate of our fixed rate mortgage. However, we have paid so much on the interest and the savings per monthif we opted for streamline is low comparable to what we have already paid for two years. My question is, what happens to the interest that we have paid for 2 years. Do we have to go back paying the original loan, as if we havent paid anything at all, just to have our interest rate lowered?

  1. Reply
    February 21, 2011 at 5:32 am

    Yes, you can ask for a loan modification, even though your house is for sale. However, you will have to prove that, even with a loan modification, you can make the new mortgage payments. Also, if you have equity in your home, it will be in the bank’s interest to not modify your loan, and foreclose.

    Being behind on your payments will not affect a potential sale, unless your lender has already initiated foreclosure proceedings.

    A bank generally will modify a loan if you are behind on your payments and your mortgage is more than the house’s market value. In that case, the bank would rather have someone living in the house, making payments, instead of having a negative asset on their books.

    The cards are stacked in favor of the banks, unfortunately. The key is to communicate with your lender.

  2. Reply
    February 21, 2011 at 6:05 am

    Nothing happens to it, interest belongs to the lender. Your streamline, which I am in process as well, is done on your outstanding principle.

  3. Reply
    February 21, 2011 at 6:54 am

    The interest you have paid for the past two years is for the use of the lender’s money. This interest you paid would remain with the current lender.

    What you would be refinancing is the principal balance of the mortgage loan that you obtained to purchase the house you are currently residing in.

    The principal loan amount is approximately what you paid for the house give or take a few thousand dollars, as you have not paid very much if anything on the principal amount of the mortgage loan. The new streamline refinance mortgage loan would pay off your current mortgage loan completely. Once the transaction close you would have a new mortgage lender to start paying. Normally your first monthly mortgage payment would be approximately 30-45 days from the date you sign your new mortgage loan docs with your new lender.

    Even if you streamline with your current lender the same thing would happen, you would pay the current mortgage loan off. You would be be given a new mortgage loan number and again your f new mortgage loan payment would be 30-45 days from the date you sign your new mortgage loan.

    Make sure your new interest rate would allow you to recoup the cost of the mortgage loan refinance in a short period of time. If you opt for a no fee no points loan the interest rate would be higher than if you paid for the points and fees out of pocket.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

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