Wondering if there is a way to a bank reduce a loan mortgage to the real cost of a unit in Fl.?

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Thanks to all… I bouth it 4 years ago and now is worth half of the value.

  1. Reply
    May 3, 2011 at 8:33 am

    It will not happen. If you have borrowed (as example) $ 200,000 to purchase a property, the lender is entitled to receive back every penny which was borrowed. Any lender will choose the foreclosure route before it will reduce the outstanding principal amount. If the property was ‘over valued’, why on earth did you borrow the amount necessary to purchase it ?

    Given another approach, would YOU tolerate the lender RAISING the amount of principal owed, simply because the property might have appreciated in value ? I think not, and the same approach applies in the OTHER direction.

  2. Reply
    May 3, 2011 at 8:46 am

    This is not likely to happen in Florida, California, New York or Mississippi.

    As I understand it, since the property values have gone down, you now want the lender to lower your mortgage to the current value of the house?

    Therefore you would want you lender to draw up a new contract to reflect this new change and lower value and reduce your loan to this new value? This will also cause your monthly payment to be reduced.

    Let’s suppose for a moment the reverse was true. Let us say the property value increased by $ 150,000. Would you then call the lender and say, “We need to draw up a new contract to reflect the increase the loan amount as the value of the property has increased. Of course I know this new increase in value and new loan amount would cause my monthly mortgage to go up, but what the heck this is the fair thing to do.

    You signed a mortgage contract to borrow money to purchase a house. The contract did not say in the event the property decreased in value, we, the lender, would decrease the loan amount to reflect the new mortgage loan balance.

    Nor did the lender have in the contract that in the event the property would increase in value we would prepare a new contract to reflect the increase in value therefore we would increase the mortgage loan amount to reflect the increase in the value of the house.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

  3. Reply
    the kid
    May 3, 2011 at 9:42 am

    Nope. It’s not the bank’s fault the property value went down, why should they take a loss?

  4. Reply
    May 3, 2011 at 10:32 am

    Of course not.

    If you purchase a home 4 years ago that is now worth double it’s value…would you think it legal for the bank to force you to pay more than what you agreed to???

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