upsidedown mortgage in california, need to refi–foreclosure the only option?

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i bought a condo two yrs ago with subprime credit, interest only loan. i counted on improving my credit score and refinancing before ARM expired. my score is now 720, but condos in my complex and neighborhood have depreciated and keep declining. i owe 190,000; recent comps are $ 90,000 – $ 130,000. County officially devalued the property and reduced tax. Spoke to my lender–said they can’t do anything. I could rent the property for less than half the mortgage payment, not counting HOA dues, insurance, etc. ARM % doubles in one year, but everyone expects forecolsures from subprimes to increase, more condos on market, lower prices. I’ve contacted 2 different ‘programs’ advertising help for my situation, both said nothing I can do. Historically these properties took 12yrs to recover from last price drop. i retire in 6 yrs, need to break even on sale by then, or foreclose. What should i do now? Any options–or hope of quick recovery?
Thanks for all suggestions so far but: i don’t qualify for short sale yet, i’ve researched this. the lender won’t negotiate anything right now because the market in Sacramento is so bad and my loan is so ‘upside down’ it’s standing on its head. the HOPE program/bailout info is about credit counseling only; my credit is not the problem, score is now high–my problem comes from the increase in interest rates over past 2 years and huge decline in the market in my area. Not the lender’s fault, or mine. Any other solutions besides foreclosure? thanks.

6 Comments
  1. Reply
    ron d
    May 3, 2011 at 1:51 am

    Try a short sale.

  2. Reply
    kevc21
    May 3, 2011 at 2:44 am

    Try this…
    1. Ask your lender for a rate & term Refinance. No cash out. Try to get the monthly reduced as low as possible. Why?

    2. Sell property using CREATIVE FINANCING. Let someone else take on the monthly payments, maintenance expense, HOA, etc.

    3. You’ll get A LOT MORE per month than just renting.

    4. Give tenant-buyer as long as they want to re-fi into their own name (you need YEARS for property to go appreciate back up).

    5. If you’re in So. Cal. (I’m in Cerritos), I can help.

  3. Reply
    kevin s
    May 3, 2011 at 3:39 am

    What an awful loan program. I would keep pressuring your lender. Threaten to go to the attorney general and to the media if they do not work to help you out of your predatory loan. You would be surprised what they are able to do in terms of calling in favors.

    Call your lender. Tell them that you fully intend to go into foreclosure without them getting another penny if they cannot help you out. The only way you are going to get anything done is to play hardball. These people conspired to screw you over. Treat them like the pigs they are.

    I would try hard to hold onto the property. Eventually, there is going to have to be some sort of bailout program available, which will help your situation.

    To the rest of the people reading this, STOP BUYING CONDOS! There is a reason these things are historically difficult to resell, and they are extremely vulnerable to market swoons. They are a terrible investment. Just because all your friends are buying them doesn’t mean you have to.

    Stepping off soapbox.

  4. Reply
    Cathie B
    May 3, 2011 at 4:17 am

    I was just reading a site last night (somewhere!) about what someone else mentioned about ‘bail-out’ programs. One city in Ohio has really bad situation that they are working on to resolve, and part of Michigan(?) also in bad. Several states – including CALIFORNIA are “scrambling” to resolve these bad loans. Bank of America, Citi, and Washingon Mutual (I believe it was those 3) are trying to put things into action to help out. I believe one of them (BofA?) mentioned something about options at 5.5% for these loans, and if I understood correctly, these lenders are getting pressured to extend the lower rates till they can get this all figured out.

    The only thing that was stressed…Do NOT default on you payments for even a month…else they may not be able to help if you do.
    As another said, I’d hang in there for awhile. Try to get more info on this in the mean time. If I can find the info (it was a VERY long read on numerous subjects) I’ll try to post it for you – (IF your question is still open!) It may have been an article from MSN that was copied onto the site I was reading.

  5. Reply
    vicki g
    May 3, 2011 at 4:57 am

    Please go to
    mortgageloanquick.com
    we will advise if we can.

  6. Reply
    Workfortoday
    May 3, 2011 at 5:52 am

    I would go to the site below. There is an email address on the site of a guy who can help you for free. He’s a real estate agent. Also when you get there click on the button that says PROPERTY RESEARCH and it will show what your place(s) are really worth in todays market.

    It’s a free site and it shows it to you instantly online without having to wait for an email etc..

    Also there are downloadable pdf reports there that are helpful

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