Attention, Borrowers: You Can Renegotiate Mortgage Rates
It sounds simple, yet a lot of borrowers in trouble with mortgage payments never consider the possibility when it comes to home loan rates.
In fact, a Newsday article points out that renegotiating interest rates on a mortgage is one of several options available to property owners who want to keep their houses but have problems paying.
This “loan modification” is not the same as mortgage refinancing, which carries higher closing fees because it’s considered a new loan that pays off the old one.
Some home loan lenders will also consider mortgage refinancing options by delaying the onset of the hike of the adjustable rate, lowering it to the current rate or a new, fixed rate.
In another option, lenders and mortgage servicers can defer payments. For example, the first few years of home loan payments are the interest, and some interest can be tacked on to the back end of the mortgage.
Also, extending the length of the home loan has been done by some banks and home mortgage servicers. If a borrower has paid the first three years of a 30-year loan, the mortgage still owed could be spread out over 30 years.
Some home loan changes will come with fees, but those might be waived for people with money woes and will probably be lower than mortgage refinancing fees.
Tuesday, the Federal Reserve Bank of New York hosted a discussion of consumer advocates, state officials and some of the biggest lending names nationwide - Wells Fargo, Countrywide, Litton.
The subject was finding ways for people to keep their homes.
“They really threw out a lot of possibilities,” said Marianne Garvey, who attended as president of the Community Development Corp. of Long Island, a nonprofit that negotiates for troubled homeowners for free.
“This is all happening so fast and to such a scale that it’s changing the industry. This was unheard of, that servicers would have the ability to do this kind of restructuring … We’re in an unprecedented situation, and they’re making it up as they go along.”
Lenders and loan servicing firms often amenable to renegotiating interest rates want customers to continue paying instead of defaulting. Also, the New York mortgage foreclosure process is one of the longest in the U.S.
In rewriting home loans, lenders and loan servicing firms will take into account why the homeowners are in trouble and how much they can afford to pay, Garvin said: “They want to know if the borrower is motivated to keep the home.”
Experts said you can smooth negotiations by going to the home loan lender early to discuss problems, before delinquency, experts said.
SOURCE: Newsday
August 1st, 2007 at 6:53 pm
These articles are so encouraging, but the reality of the situation is that the lenders will not negotiate. I tried negotiation before defaulting and America’s Servicing Company didn’t want to budge on their policies or the loan terms. They seem to want a foreclosure because all of our efforts to negotiate terms that we can pay have been in vain.
August 5th, 2007 at 10:40 am
I tried to call Countrywide to renegotiate the program was suppose to called “Hope”, per one of Countrywide loan officers that I know. The number he gave me ended up leading to an overseas person from Malasia, and was no help at all.
August 16th, 2007 at 10:38 am
I’m in the situation now where my Flex Pay ARM is going to recast in December. The key, I’m told, is to get ahold of the right person. The customer service department is not the right place to try this renegotiation. Those folks are not on your side as they want to refinance you and get their commission. You need to find the foreclosure abatement department and hopefully you can use someone in the field who can speak their language to talk for you. Whether it is a good hearted mortgage broker or perhaps a foreclosure attorney, they know what to say and how to say it. I’ve found in the last couple of weeks that there is a lot of turmoil in the industry and traditionally you have to get into trouble before you can get out of it.
Even though I see the train coming at me from the other side of the tunnel, it seems that I have to stand on the tracks and let it hit me before I can call for emergency services. Hopefully with all of the foreclosures happening out there, the lenders will realize that allowing me to try and reset a new rate and payment structure is beneficial to both of us.
March 3rd, 2008 at 10:06 pm
Although many articles that I have read are encouraging, the issue for us with our lender Countrywide is discouraging.
We attempted to call them before we ever missed a payment.
The run around we received was frustrating and a waste of our time. They basically wouldn’t even talk to us because our account was current. My second and third attempts after missing those payments have not been encouraging either. We can not keep this home if our loan re-casts and we cannot re-finance it since the market dropped our home value by more than $150,000 putting us in the negative.
March 18th, 2008 at 11:28 am
My husband and I just spent $35,000 last year paying 3 to 4,000 per month to stop a foreclosure on our adjustable rate mortgage. Citiresidential spends hours on the phone and runs through my patience, and blood pressure. We have been unable to renegotiate with them (and they claim to be the debt collector, not mortgage holder) and now are looking at a similar situation due to our rate going up. We are at the end of a rope and do not know where to go from here. Can anyone help?
April 5th, 2008 at 2:11 am
april 4 2008 i have the same problems with countrywide as veronica the people there are insultig.unhelpfull.and downrigth mean they say if you are not behind with your payments there is nothig we can do for you, they had the nerve to tell me i needed to put $50,000 in their poket before they could refinance mi loan can you believe that?
April 5th, 2008 at 9:54 am
I talked with Countrywide before my payments were late. They would not offer help since the mortgage was current. Since that time, they have been unwilling to offer anything but defer a payment by adding a large portion of the payment to the next payments.
They have been cold and unconcerned.
April 12th, 2008 at 1:40 pm
I have called Countrywide since we stated having difficulties making the mortgage payments. Since they value of our home aslo decrease they were unable to help us. I clearly told them that if my mortgage is not restructured, we will not be able to make the payments.
In summary, they were unable to help us!
May 2nd, 2008 at 7:44 pm
I found my self in similar situations as many consumers have written. Country Wide is my curent Lender. I am trying to regotiate my loan terms. MY payment has gone up more than a thousand dollars in less than six months. First they told me that I didint make enough income. They sugested I sale. Than they said I made to much that they could not help me.Just resubmited diferent income, Let’s see what they say now.
June 19th, 2008 at 2:38 am
I would like to offer a suggestion as it recently worked for my neighbor. (I do not know which mortgage company he has but the idea is sound)He bought his house here in the san francisco bay area hoping to capitalize on the housing boom. However, as with most people who are in a bad situation, I myself included, he bought as the market peaked and got stuck in a ARM that was more than he could afford once it adjusted. What he did was simple, he told his mortgage company he could not and would not pay until they renegotiated the principle amount owed and lowered his payments. it went all the way to him moving out and going on the market for about 160k less than he paid till the mortgage company saw they were in a lose lose situation and came back to the table with a reasonable deal..
July 12th, 2008 at 3:57 pm
I have been turned down many times buy wells fargo..and was told there was no help untill i fell behind! now I have contacted an attorney and they are sending the letters for modifacation. if not then I will be forced into filing chapter 11 . Someone need to fix this problem!!
July 23rd, 2008 at 9:16 pm
Some people need to really grow up. I guess the mortgage mess has drove us a little all crazy.