Mortgage Company To Lower My Principal???

[Dollar Bill]

I would like to get the mortgage company to lower my principal.

I live in Los Angeles, and am upside down on my house. I plan to ride through on this and simply continue to pay the mortgage ontime.

Does anyone know if there is a chance of negotiation with the bank Suntrust?

I am current on my loan and have never been late. I've only had it since Nov'07. Purchased for 607k...32.5 down, bal of 574,500. Appraised for Bk purposes at my expense @ 515k in April '08. Same model down the street and another are for sale now. One has sold..not sure how much, but was listed by the bank for $449k or so. I will find out soon what it sold for.

Does anyone know what I can possibly do?

I'd like to get my principal lowered.

Do I need to be late on paying? It's already a part of the bk obviously, can that get there attention? How about being in bk, and it having dropped so far in value. Can we petition the judge to see if he can force a cram-down, although I have only had the home for almost a year?

Any opinions?

[keepmine]

BK judges don't have the authority to cramdown a home in a Chapter 7. Only in a 13 and that involves stripping a 2nd mortgage if there is no equity supporting the first.
Honestly, it's time to stop making bad decisions. You're upside down by prehaps a $100K. Walk away-don't put another time into a depreciating asset.

[AngelinaCat]

You might want to search for threads by member lajazz947. From what I understand, he is in the LA area and has a home mortgage with Wells Fargo. He might be able to offer some suggestions.

Good luck.

[PoorGrammyinBK7]

I don't know the answer to your question but we have a HELOC with the same bank and they sent a letter and reaffirmation agreement, saying we were delinquent (we are not!!), adding fees, AND changing our fixed rate to a variable! The agreement is for $1K more than we owed! Then they state that they do not permit customers to retain the collateral without reaffirmation or redemption. Well, we are a bit put out with them to say the least, and now probably will NOT reaffirm (even though we originally intended to do so). I am just wondering if they really will spend the money to foreclose when they are in #2 position and only partially secured since the value has gone down. If they do, so be it - their loss. We don't care any more.

[Dollar Bill]

Thanks for all of the input.

Grammy....sorry to hear that Suntrust isn't working with you. Very interesting. We haven't heard anything from them. They probably know we are upside down and don't want to rattle or shake any nerves since we are current.

[HHM]

You can't do anything about it in BK 7.

But you could try negotiating with the bank. However, getting the loan rewritten for current market value is rare. One tactic is to have the bank rewrite the first mortgage for the current market value and have the bank take a deferred Junior mortgage for the balance of the original note. You only make payments on the 1st mortgage, but the bank is protected if the market rebounds. This might make more sense with an example.

Current loan balance of $574,000
Current market value of home, $500,000
Bank issues you a first mortgage for $500,000
Bank then takes a Junior deferred mortage for $74,000. That Junior mortgage just sits there like a lien. You only make payments on the 1st.

If you are really that negative, in the long run, you are better off dumping the house than trying to dig out of that negative equity.

[Dollar Bill]

Thank you very much HHM!

Do you know if I should seek an attorney for their assistance with negotiating, or done on my own.

[HHM]

Realize, you are not going to get anything if you do not reaffirm.

In your situation, doing a loan workout is too risky. For purpose of BK and your tenuous financial situation, you should not reaffirm; but the only way the bank will even entertain a workout is if you reaffirm. The type of loan workout you want is very hard to get. What you need to do is propse the workout as part of a reaffirmation negotiation. Use the reaffirmation as leverage to get the bank to modify your mortgage. But I doubt they will go for it.

However, my recommendation, lose the house, and buy again in two years. You have too much negative equity.

[Dollar Bill]

We're lowered our expenses dramatically, and have decided to hang on to the home. We will not reaffirm.

I would like to know, is it easy to walk away from in a year or two if we decided to? Is it just as simple as that...return it to the bank?