How do I get my mortgage company to forgive a portion of my loan and lower my interest rate?

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My mortgage broker at the time convinced me not to use my VA loan or FHA!!! The property is located in Detroit, MI. I purchased home in 2001 for $ 120K and it appraised for $ 145K…Today it appraises for $ 60K!!! Been trying to sell for 1-yr, along with nine of my neighbors..asking price $ 75k….I lost my job with automotive industry and have since relocated for new job in D.C. where cost of living is 4X that of Detroit!! I cannot purchase home in new area due to income tied up in property. Keeping property is costing me 2700 a month!! I want to just tell mortgage company to take it. It’s my only bill and it’s consumes 1/2 monthly salary. HELP!!!

  1. Reply
    Etta P
    April 29, 2011 at 11:03 pm

    Call your mortgage company. Talk to the loss mitigation department and advise them you can’t afford the home and you want to do a “deed in lieu of foreclosure”. This will adversely effect your credit score for many years, and perhaps interfere with buying a new house. FHA and VA would be no different, all lenders will report it to the bureaus.
    Is it possible to rent it? Try to hang in there until the market rebounds? Just food for thought, good luck!

  2. Reply
    April 29, 2011 at 11:36 pm

    The lender won’t “forgive” a portion of your loan, but you can ask for a rate modification.

  3. Reply
    April 30, 2011 at 12:10 am

    Unless you have a fixed-rate mortgage, the current mortgage interest rates are very important to deciding how much you should pay every monthcompanies offer different interest rates so it is a good idea to shop around for the best deal before settling on one particular lender.

  4. Reply
    Paul S
    April 30, 2011 at 12:15 am

    I am a Bankruptcy Attorney in Detroit. You can File Chapter 7 or 13 depending on your income and get rid of the property. If you still want to keep it then file Chapter 13 and modify the loan or cram it down. You can do that as long as the house is not your residence. You file Bankruptcy where you have live for 180 days or more.
    Good Luck.
    Paul Stoychoff

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