I need Refinancing Help!?

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My mother is refinancing her house, or at least trying to. She bought her house for 210,000 in 2006 at full price. She got an 80/20 loan so she has two payments. She was doing a streamline refi and everything was going fine, except one thing. Many of the houses in the neighborhood went into foreclosure and re-sold for about 160,000 to 170,000. Many of these people were put into adjustable mortgages and when the market dropped, they went into trouble and couldn’t afford the payments. Anyway, my mother has become upset by this. Is anyone knowledgable about this and can give her some hope other than what I have said. The mortgage broker told me that the last house was sold 5 months ago and that the appraiser had to wait until it had been 6 months from the purchase date and then he would be able to use any new construction near to her for the comps. There is a new neighborhood about 1/4 of a mile from her house with many new houses and new construction right this very minute. Is there anyone that can give her some hope or let me know how these situations go. The houses in the new neighborhood are going for no less than 250,000 and range from small to big. It is stressing me out that she is upset about it because I want any and everything to work out for her. She just recently lost her husband who she was married to for about 3 weeks after only 1 year of dating, and he had no life insurance. (they hadn’t gotten around to everything yet…I questioned this too, believe me, my mother is very smart, you just never know how much time you have…anywho…) So, she is trying to pay that as well as lower and get one mortgage so she can pay for everything. Please help if you can.

  1. Reply
    April 29, 2011 at 11:31 pm

    No one here can help. She likely owes more than the house is currently worth. That’s makes a refi very difficult.

  2. Reply
    Randy B
    April 29, 2011 at 11:49 pm

    Unfortunately, there is no possibility for her to refinance her home with her home being “upside down” (her existing loan amount is greater than what her house is worth). What she can do is do a Loan Modificaiton, either directly with her lender or with a mortgage attorney. A Loan Modification might help her lower her mortgage or decrease her loan balance (depending on how the bank reviews her existing payments, income, debt, etc.)

  3. Reply
    April 30, 2011 at 12:01 am

    She will need to do a Mortgage Modification. This is the only choice she has with the home being “upside down”. There is no reason she should go with a Lawyer, her Mortgage Co has a Mortgage Modification dept. that will help her for free. She needs to call and speak with someone in that dept and get the appropriate forms sent to her. Along with those forms she will need the following as well.

    1. Pay stubs (last 2 months)
    2. Bank Statements (last 2 months)
    3. Hardship letter (what has changed to need a modification)
    4. Lender forms

    The process can take anywhere from a few weeks to 3 months depending on how backed up the bank is. It can also be drawn out if all the papers are not sent in together and 100% complete. Be sure everything that is asked for is together before sending in the package.

    Hope this helps and good luck to your Mother.

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