liklihood of bank wells fargo re-negotiating mortgage

[carolen]

moving towards chapter 13 in 6 months. our home equity line converts to regular mortgage in the fall which will cause interest rates to go up and payment to go up. how likely that bank will negotiate with us for lower rate? this is property i live in, actually owned by myself 2 brothers and my mother. my mother lives with us. the loan on the property is 25% loan to value but my part of equity falls within allowable amounts due to 100,000 equity loan on it. my largest balance credit card is with this bank which i will be including on the chapter 13. any thoughts

[NoTomatoCan]

Hard to answer what one particular bank will do, especially without many details. Are you past due on this home equity line? Have you requested any type of modification with them yet? Are your 2 brothers and mother also on the note? What are the factors pushing you to a BK?

If you have 25% equity in the home, why not refinance at the historically low rates? I am assuming that it is a credit score or debt to income issue - but what about the brothers or your mother?

Going on what you have provided - It sounds like you have no intention of leaving the home and if the home was sold off there would be sufficient equity to pay off the Wells Fargo loan. Under those circumstances, what incentive does the bank have to renegotiate the terms of your loan? It is possible, but probably not very likely that they would give you a lower rate.

[carolen]

The payments on the equity line have never been late. The note is almost 5 years old, and has an automatic conversion to prime rate at end of 5 years. My mother is 85. I am caring for her. This was our family home that is why my brothers on on deed as well. Neither of them are in a position to do anything regards to house. My husband and I are the only ones on the note, and as far as my husband goes on the deed he is shown as a non vested spouse. I have not negotiated with wells fargo yet because when I did ask the question they said because it is home equity not a mortgage to negotiate it would have to be a regular mortgage. So it will not be considered that until the fall. Our debt to income ratio is very high. I lost my job 2 years ago, and unemployement runs out next month. The other factor is we have education loans that have been in forbearance that need to start getting paid on. Everything kind of escalated into a pending train wreck!

[dlinid]

They may not negotiate until it becomes a reg mortgage. But you can start to give them incentive to work with you. Start writing letters and send them registered in the effect you will not be able to pay once the payment goes up. Have you tried the help for homeowners yet? Or even the department of finance within your state? I did finally get a loan mod because of the dept. of finance. They worked with the former GMAC to get it done for me. Try the dept of finance.

I am sad to say that the loan mod will not help me at this point, I am out of a job. I did feel really great that I got a mod however, they are not easily done.

Good Luck with this!

[NoTomatoCan]

I do think the OP is in a fairly unique situation since there is actually equity in the home. That may be a disadvantage in this situation since the potential leverage of just walking away is not there.