http://www.trulia.com/voices/Financing/NEED_SERIOUS_ADVICE_Loan_mod_has_just_been_appr-141884my principal bal to the cuurent market value they were able to lower my monthly payments to interest only payments for 5 yrs. Should I agree with it? I want to keep my home.en-ushttp://www.trulia.com/voices/profile/Real_Estate_Pro-Corte_Madera_CA-682702/http://www.trulia.com/voices/profile/Real_Estate_Pro-Corte_Madera_CA-682702/Hi Christina, There are a few cases where the lender will lower principle. If you qualify for the FHA programs, or if in the originial loan docs there were violations and your attorney used those violations to negotiate your principle write down loan modification. Are you kicking the can down the road by accepting this interest only payment for 5 years and not chewing away at the principle? What is your goal to own a home or keep this home? This website might help you, it was filmed in Sacramento by the way. Good luck!Sat, 04 Jul 2009 08:27:05 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Lodi_CA-517557/http://www.trulia.com/voices/profile/Real_Estate_Pro-Lodi_CA-517557/I know of only rare instances where there has been a principal reduction. Most loan mods that I hear of revolve around lowering of interest rates, interest only payments, etc. You should talk with an accountant and an attorney; then only after considering their advice, sign any documents. It's a sticky wicket for sure but if you want to keep your home and can afford the revised payments - then enjoy your home. Good luck.Fri, 03 Jul 2009 10:12:16 -0700http://www.trulia.com/voices/profile/Both_Buyer_And_Seller-California-296373/http://www.trulia.com/voices/profile/Both_Buyer_And_Seller-California-296373/Chris makes some excellent points. If you have a non-recourse loan now and the new agreement does not contain such a stipulation I would be very wary. I have heard that many if not most modifications contain this Trojan Horse. In other words, you might be able to walk away from the house if you cannot afford it and be off the hook, go on with your life. However, if you commit to another agreement you may be forced into bankruptcy when the 5 yr term is completed or else be saddled with enormous debts.Wed, 01 Jul 2009 08:33:47 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-California-666541/http://www.trulia.com/voices/profile/Real_Estate_Pro-California-666541/When you signed your promissory note, it was not contigent upon market conditions. If the lender is willing to do ANYTHING to assist, take advantage of it. Modifications are NOT a joke. They are, a conundrum. You have mutliple issues you need to consider. If you had a hardship in your life and the unexpected occured, than the lenders/servicers (I'll use these terms as a "catchall") are strongly encouraged to work out a solution. They must consider the Net Present Value and determine whether or not the Make Home Affordable Modification or the Home Affordable Modification Program or some variation will allow you to stay in your home and not redefault. Once they come up with a plan, they must also consider which may be better for them, mod, short sale, or foreclose. Sort of a Rock, Paper, Scissors approach. They have obviously chosen which is best, for them, You need to consider the tax pro's and cons. Since you did not receive a principle reduction, you will not receive a 1099-C for any cancellation of debt. However, if you choose virtually any other path and the lender must cancel debt, you need to consider the ramifications. Do you have a recourse or non-recourse debt? Do you have the original loan that you took in order to purchase the home? In other words, have you ever refinanced for any reason, not necessarily for cash out purposes? If you have your original loan, than in California you have Anti Deficiency Protection, if you do not, you have a recourse debt and the Mortgage Debt Relief Act of 2007, extended through 2012, won't help you. And, even if it did apply, know that our Franchise Tax Board is not complying with Federal Law. You'll need to familiarize yourself with IRS Form 982 and understand Insolvency vs BK. (I'm writing this knowing this may not apply to the one who asked the question, but may cause another reader to pause and ask appropriate questions before they make a decision) The biggest challenge we have in the industry is the scum lawyers and Brokers who over promise and under deliver and take people last 3, 4, 5, 6 or even 7 THOUSAND DOLLARS, then deliver nothing in exchange, or nothing more than th public could have gotton through one of the 2600 HUD approved counselors. They advertise and make claims to give the public the impresion that they are ENTITLED to a modification and that THEY will obtain for you, the borrower, a 3% fixed for thirty year rate and even reduce your principle by 50 to 100K. Folks, statistics don't lie, principle reductions are occuring in less than 2% of the casses. I teach on this subject and have been retained by government agencies. In addition, I am the Chairman of a non-profit and sit on a non-profit collabrative that deals with this subject daily. The stories are heartbreaking and tragic, but nothing makes me more angry than to hear about people like you who have paid 3k and received nothing more than what you would have received by going to Springboard or others, who are funded by HUD, in order to achieve the same thing. Had your lawyer actually got you something special, I would say thats great, since they did not, I'm under impressed. By the way, was it a lawyer who helped you or one of these mills we're shutting down who claim to be "backed by a lawyer"? Did the lawyer sit down with you and go over all of your options? Is he/she physically in the office that worked on your loan modification? Is this their primary scope of practice? If not, they are in violation of the State Bar Guidlines. The Bar has just assigned a task force of 33 individuals to police themselves. If you were not treated properly, report this attorney to the State Bar. Unless and until you do, we will not be able to rid ourselves of these predators. Can you tell I'm a little passionate on this topic!!!Wed, 01 Jul 2009 07:45:38 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Woodbridge_VA-177045/http://www.trulia.com/voices/profile/Real_Estate_Pro-Woodbridge_VA-177045/Hi Christina, Gosh your asking a loaded question! I don't anyone who purchased a home thinking they would ever be in this situation, however for you it seems as though you've acquired some breathing room. Thank you lucky stars!!! If you want to keep your home, you've answered your own question. What is the alternative "walk away", "foreclosure", or "short sale" why? Do you really want to rent? At least you get the tax deduction. No one has a chrystal ball...and no one knows whether the home values will climb back up over the next decade.What you do know is, you just got a Interest Only (Affordable Monthly Payment) that allows you to stay put for another five years and ride this out. I tend to like the 10 yr Interest Only Loan workouts better, since it gives the market more time to correct and the homeowner more time to pay extra $ on the principal over the next ten years to help them be in a better position.Five years will go fast, and I don't know your market is or how much you are upside down...however that would scare me a bit here in the Northern Virginia Market. I hope that helps, below I wrote an article on how Bank Of America is helping folks who were previously with Countrywide and who Pay Option Loans. They are doing 10 yr Interest Only Workouts for folks!Wed, 01 Jul 2009 03:57:39 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Butler_County_OH-126984/http://www.trulia.com/voices/profile/Real_Estate_Pro-Butler_County_OH-126984/Christina that is the way most loan modifications work. The lender lowers the payment to make it affordable for you live in the home but they do not give you free money to take off the balance. If you want to stay in the home agree to the loan mod and make the payments on time. As for taking money off the principle, where do you think real estate prices will be 5 years from now? Wouldn't it be a good joke if you had bought the property at 450K, got the lender to rewrite the loan to 300K and sold it in 5 years at 500k! That would really show what morons we had in charge of our financial system.Wed, 01 Jul 2009 03:39:58 -0700http://www.trulia.com/voices/profile/Other-St_Petersburg_FL-565881/http://www.trulia.com/voices/profile/Other-St_Petersburg_FL-565881/What bank is your loan through? Does fannie mae or freddie mac own the loan?Tue, 30 Jun 2009 22:58:22 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Fremont_CA-186802/http://www.trulia.com/voices/profile/Real_Estate_Pro-Fremont_CA-186802/Hi Christina, nobody knows what your exact situation is; however, if you want to keep your home, and the new interest-only payments give you sufficient economic breathing room, why would you not move forward with agreeing to the Loan Mod? What's your alternative? Short Sale? Foreclosure? Do you really want to be a renter? These are questions only you can answer. Best, SteveTue, 30 Jun 2009 22:52:22 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-91007-182464/http://www.trulia.com/voices/profile/Real_Estate_Pro-91007-182464/We all know that loan modification is a joke,,,, it does nothing to home owner, except lower the monthly payment by couple of hundred dollars... I know from all my clients who had done it. Some even paid a private company $3000 which is a total waste of money... If you really want the house then go ahead and bite the bullet, if not, just go the short sale route...Tue, 30 Jun 2009 22:31:46 -0700