30 year fixed at 6.125% Discharged in CH7 and home is underwater by about 20%

[Diesel73L]

So now that we are discharged and getting back onto our feet we are trying to figure out what to do with the house. As stated in the thread title, we have a 30 year fixed mortgage at 6.125% which was a decent rate at the time we took it out, but obviously things are much different now. The other issue is that even though home prices seem to be rising all the time (at least according to the news), our area (NJ) seems to be languishing. We owe about $225K on the mortgage and the house is worth anywhere from $185-190K depending on the source. We don't want to move and have no reason to. We have made improvements to the house, the schools are good, we love our neighbors, it's a beautiful area, etc... Now that we can show income (Just over $100K a year once my wife starts), are HARP/HAMP/etc...available to us to try to get refinancing or a principle reduction? How do we start this process? Is there some other way to go here?

[LadyInTheRed]

The best way to find out if you are eligible for Harp/Hamp is to call the lender. If you aren't eligible, ask about an in-house modificaiton (not sure how successful that will be while you are current on your payments, but it can't hurt to ask). I wouldn't ask for a refi if you didn't reafirm your mortgage. Ask for a loan modification.

If you can't get a mod, look at the bright side: At least your rate is fixed and your payment will never go up.

[msm859]

The best way to find out if you are eligible for Harp/Hamp is to call the lender. If you aren't eligible, ask about an in-house modificaiton (not sure how successful that will be while you are current on your payments, but it can't hurt to ask). I wouldn't ask for a refi if you didn't reafirm your mortgage. Ask for a loan modification.

If you can't get a mod, look at the bright side: At least your rate is fixed and your payment will never go up.

I would agree about trying to modify loan first. However, if you are unable to you should seriously consider stop paying your mortgage (they probably won't take you serious on a modification until you stop anyway - I had a 6.25% IO ARM that I modified to a 3.5% fix - after I stopped paying the mortgage). If they then won't modify live there for 1-2 years why they foreclose, save up all the money and in 2 years you can buy the same/similar house for @$180k probably under 4% and save yourself over 200 thousand dollars over the life of the loan.