If your loan is FHA, check into an FHA Streamline refinance. There is NO appraisal required. I helped an underwater borrower reduce her interest rate from 6.26 to 4.75 and the cash to close was $400. The only cost added to the new loan balance was FHA's (1) percent up front mortgage insurance premium.
If your loan is conventional and you originally put 20 percent down when you purchased it, there is a good chance your mortgage is owned by either Fannie Mae or Freddie Mac. Both have streamline refi programs with no appraisal required. These are NOT loan mods but actual refinances. Your loan servicer can tell you who owns the mortgage. Disclaimer ... not all conventional loans are owned by Fannie or Freddie.
Start there first before you go the loan mod route.
All the Best,
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Just like in Florida, people purchased in California and then our home values declined as well.
Scout - definitely pursue a modification option with a non-profit that will help you, some of them can be quite amazing/persuasive with your lender. It's surprising what a lender will do when they are working with a 3rd party. It's almost like having an attorney.
With the changes in values, there are many who would like to refi but are stuck with over-encumbered properties that cannot do anything but keep paying, or stop. No one is doing loans for more than appraised value. A loan modification is your best bet in this case.
There are some banks that are doing reasonable loan modifications, but others that don't give you any good options - luck of the draw in some respects. It can depend not only on the bank but even the investors who ultimately own the loan. The loan mod is definitely the place to start, if you haven't already, and even if you have tried some time ago, try again. There are changes regularly to the guidelines each bank uses in determining whether or not to modify a loan.
If you are not able to modify your loan, then a short sale may be the best option, and a Realtor experienced in short sale negotiations can often help with the loan mod too. Some banks even require that the modification be processed before a short sale can be considered - the paperwork is usually the same.
It is a very tough decision to continue to pay into a declining asset, or get out and start fresh (which some see as skipping out on responsibilities). If you've considered all of your options and want to pursue the modification and/or short sale, contact a few good real estate professionals, and select the one that is the best fit for you. I am very familiar with your area, and would be happy to discuss your options with you.
Sammer Mudawar, Broker