Financing in 95404>Question Details

Heather, Home Owner in 95404

Is there any option for refi with a non-Freddie/Fannie loan that is underwater? We have naver made a late payment--just want to switch to a 30 yr fix

Asked by Heather, 95404 Thu Apr 21, 2011

When we purchased the house in 2005, we paid 600,000.00. We put down 180,000.00, but now the house is only worth about 330,000.00. Our loan was at a fixed interest rate for only 7 years which is quickly approaching. All we want to do is switch to a 30 year fixed. We aren't asking for loan forgiveness or anything! We have never been late on a payment and both my husband and I have very steady incomes. Our loan is with ASC (non Freddie/Fannie) who absolutely refuses to work with us. They say we don't qualify for a modification because we make our payments (maybe we should stop?) and we don't qualify for a refi because their policy doesn't allow them to refi an underwater loan. They are basically telling us to walk away. Why wouldn't they want to modify our 400,000.00 loan and allow us to continue making payments (for more than the house is worth)--they will make more money that way than by having us walk away! Any advice is greatly appreciated.

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Hi Heather,

I deal with this type of situation every day. After 22 years in the business I have found that about 60% of my business is now doing short sales. My loan was with ASC and i was in a similar situation to yours. The problem that I found is that unless you have 20% equity in yout home you cannot re-fi. Additionally, if you are current on your payments the banks will not talk to you about a modification. ASC (which is Wells Fargo) is very unlikely to work with you on a modification. The reality is they can make more money by foreclosing on you than they can by working with you. The whole thing is disgusting. If you need to speak with soeone who truly understands the ins and outs of this marketplace feel free to give me a call at 707-280-6110. No fees or sales pitch involved, just straight forward information.
1 vote Thank Flag Link Mon Apr 25, 2011
There may be some help for you. In order to help you, I would need to see your "Note" in order to know who the original investor was. Your "Note" in that huge stack of loan documents you signed when you purchased your home. What most people don't realize when trying to do loan mods or short pay refinances, you gotta talk to the right person or company. Not the servicer. That is the key! That's why I am successful in doing short pay refinances, because I don't waste my time talking to a company who does not have the authority to negotiate. Please feel free to contact me anytime.

Best of Luck!
Web Reference:
1 vote Thank Flag Link Thu Apr 21, 2011
The frustrating thing about this predicament the majority of homeowners (especially in Sonoma County) are in is that the lenders have not behaved in a logical way. You need to make a plan that will give you maximum peace of mind based on the options you have. For example, one option would be to choose a cut-off amount for a mortgage payment and when your payment exceeds what you are willing to pay, stop paying and try for a loan modification. You need to do some internet research to find out what ratios of income to debt ASC is looking for in order to grant you a loan mod. Research how long ASC attempted loan mods are running these days so you won't be surprised when the Notice of Default arrives and you will have a plan in place for that part of the process, which you could drag out for a long time if your agent knows how to help you develop a strategy. I have helped many, many people through this process so if you want to chat more, you can email me at
1 vote Thank Flag Link Thu Apr 21, 2011
I was just looking through old post and I noticed yours. If you were not able to refinance at the time of the post, I can certainly help you out now. You can call me at 408-352-5147 or email me at You can check us out at I will look at your situation and present you with some options.

Alex Greer
NMLS #1056079
0 votes Thank Flag Link Thu Aug 15, 2013
unfortunately these idiots will allow you to go to foreclosure, then they will turn around and sell your home for $400000 or less. Makes sense, NOT
0 votes Thank Flag Link Sat Dec 31, 2011
Well, I understand what many other professionals are saying, but I understand your perspective, as I am in a similar position of having a house with no equity, but don't want to ruin my credit. I would ask yourself, can I remodel my house so it is worth the $400K loan plus 20% equity by the time the 7 yrs approaches??? You also need to consider what are your other assets. Back in the olden days, it was not uncommon for folks to buy investment property with negative cash flow and have a tax write off. If you have other assets perhaps you could rent this house out and buy a fixer that will go up in value and average out your loss. I would talk to a lender like Hans Bruhner and go over your assets and see your options before you bale out! Good luck!
0 votes Thank Flag Link Tue Oct 18, 2011
Bravo Hilary and Ben. Both good answers. This is truly the community reaching out to help and myself ben & Hilary are not offering anything but free services and I like that.
0 votes Thank Flag Link Tue Apr 26, 2011
You may have some options in a loan modification but its very rare that they lower the principle balance. I provide free loan mod assistance to distressed homeowners, I would be happy to look at your particular situation and discuss your options with you.
0 votes Thank Flag Link Thu Apr 21, 2011
You stated your current loan is $400,000. IF your home appraised at this amount there shouldn't be a problem with a refinance. You think your home is worth about $330,000. The appraisal would be key. Contact me and I can pull some comparisons for you to double check your homes worth. I also have lenders I could recommend. You may contact me at
0 votes Thank Flag Link Thu Apr 21, 2011
Think the bank may be receptive to this. Putting you in a 30 year makes them more interest and you seem more than qualified to move forward. Best of Luck
0 votes Thank Flag Link Thu Apr 21, 2011
The fact that you are making the payments is only half of the answer, the other half is that you probably qualify to make the payments and so a modification is not in your future. ASC will not modify your loan if you can afford the payments even if you stop making them. To them, this is a good debt and they will wait and see.

Unfortunately, as you well know, there is no program for you unless you are already a Freddie or Fannie loan.

There is a silver lining and that is that since you have a 7/1 ARM, your interest rate will likely stay the same or go down in this environment. Typically on a 7/1 ARM, the first adjustment could go to the maximum of 5 to 6% above the start rate but it is based on index + margin and the indexes are all low so the ultimate rate should be low as well.

If you would like, I would gladly look at your note and let you know what to expect. My email address is and my number is (866) 385-1650
0 votes Thank Flag Link Thu Apr 21, 2011
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