Subrime Mortgage (Neg am loan)?

Deal Score0

I have a mortgage that gives me 4 payment options it is 8.5% but have only been paying the minimum because that is all I can afford my broker conned me into taking this loan 2 years ago and told me to just pay the minimum and we could re-finance later. He is now out of business. Is this considered a subprime loan? My balance is going up now and It is scheduled to reset where my payments jump dramatically in the next 14 months, my home is now not worth what I paid for 2 years ago. I don’t know what to do now. I have never been late on any of my payments. Do I qualify for the Government rate freeze? Do I qualify for the Fanny Mae government loan? My loan is through Countrywide and back 6 months ago I contacted them to see if I could get out of this mess and they told me no because I have a 3 year pre payment penalty and now I heard they were going to start contacting Subprime lenders in January to try and help them out to get them a Fanny Mae type Government loan. What can I do?
So is this a Subprime loan? and to answer Mary B. NO I DID NOT KNOW WHAT I WAS GETTING INTO!!!! YOU WERE NOT THERE SO DON’T ASSUME THINGS. My broker never explained to me negative amortization he told me this was a new loan program that Countrywide used to get first time buyers in homes.

5 Comments
  1. Reply
    Gregorio
    January 20, 2011 at 7:58 pm

    You are one of the few that may be in luck. Read this and good luck to you: http://www.naca.com/press/pressRelease20071024.jsp

  2. Reply
    blair1813
    January 20, 2011 at 8:02 pm

    I am going to make the assumption that everything you said was true.
    Don’t be surprised if you don’t qualify for a re-finance.. Even with on time payments, you may not qualify.
    The good news is, you look like a prime candidate for the rate freeze. This will allow you extra time to continue with on time payments, increasing your credit score.
    The hope is, you can get that score up over the next couple years and get a good re-finance.
    Best wishes!

  3. Reply
    Big Deal Maker
    January 20, 2011 at 8:51 pm

    Call your lender and tell them about your situation. Send them a hardship letter must be in your hand writing. Demand a lower interest rate-ie fixed rate at todays market at 5.59%. YOU DO NOT NEED TO REFINANCE! Or they can have the house back. They do not want your house back. Countrywide is in enough trouble to take your home back. The prepenalty will disapear.

  4. Reply
    Mary B
    January 20, 2011 at 9:32 pm

    Fannie Mae is a private investor and is not owned or controlled by the gov’t. Alot of people do not realize that. Freddie Mac is the same way.

    If your loan is through Countrywide, then it was not a subprime loan. Countrywide’s subprime division is Full-Spectrum Lending.

    There is NO gov’t rate freeze in effect at this time…the measure has NOT been approved yet….so Marty above CANNOT get you into a freeze program that DOES NOT EXIST YET….and when it does go into effect…YOUR CURRENT LENDER makes the freeze…the loan won’t go to another lender…that is one of the goals of the program.

    If you have had the loan for two years and it has a 3-year PPP, then you have to wait another year…no way around it, before you can refinance.

    There was a negative ammortization disclosure that YOU SIGNED at closing. You ASSUMED your home value would increase, and it didn’t. You also ASSUMED the rate wouldn’t go up, and it did.

    That is what happens when you gamble…sometimes you win, sometimes you lose. You KNEW you could ONLY make the minimum payment, which was probably interest-only…that was a CHOICE.

    It doesn’t sound like the broker scammed you to me…it sounds like you were well aware of the features of the loan, but was just hoping the worst wouldn’t happen…and it did.

    Some financial mistakes are big ones, but you’ll have to ride this one out.

  5. Reply
    Dale H
    January 20, 2011 at 9:56 pm

    Chances are they won’t do the refi because they paid the thief that did your loan 3% yield spread premium. However, they should not want to take your house back either.

    Perhaps you could get a hold of someone in loss mitigation that has special powers to do things in the best interest of the bank. If that were to lower your rate and give you fixed payments that would actually amortize the balance, that would be in their best interest.

    Be persistent. Good luck.

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