I’m not facing foreclosure, but can I modify my home loan (principle reduction)? Details below:?

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We aren’t late on our payments, and we can afford to pay the high mortgage for now. But I’m wondering, can I modify my loan and reduce my principle if we owe almost double what it’s worth? We bought for 395K and two other homes on our street-same model- went for 250K or less. We owe about 295K on it.

  1. Reply
    Dawn Doleh, Realtor
    April 29, 2011 at 11:17 pm

    Home mortgage modification is THE hottest buzz word around right now!
    I am a Realtor in OH. If you want to look into modifying your current loan that isn’t going to reduce your principle. It will change the terms of your loan…they will either extend the term (if you have 22yrs left of payments they could be willing to go up to 30 which would reduce your payment) OR they could reduce your interest rate…or a combo of both.
    Now….if you have both a first and second mortgage that just complicated things.
    But you would start by contacting your mortgage servicer (who you make your payments to)…and be ready for no quick easy answer. They right now are being bombarded with these requests due to the topic being so hot in the news. Be patient and call and see what they say. I do know of one major servicer that just hired 2500 people to do nothing other than answer calls such as the one you are about to make.
    Good luck to you!

  2. Reply
    April 29, 2011 at 11:38 pm

    The new modification program is not so much about what your house is worth. It is designed for people who are spending more than 31% of their monthly income on their mortgage, so if this is you then absolutely call your mortgage company and find out what they can do for you. But you definitely have a long battle on your hands.

    One more thing I’d like to mention is, do NOT pay anyone to help you modify your loan. There is no need, you can call the bank yourself and work things out for free. Anyone claiming differently is trying to scam you.

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