Our daughter is getting divorced and wants to keep her home in San Rafael, CA. 5.5% fixed rate loan, upside down by around $40-$50,000. Good credit.

Asked by Ch95610, Fair Oaks, CA Tue Feb 2, 2010

Are there any types of loans that would reduce her principle or interest rate so she can stay in her home? She teaches in a title 22 school.

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Tristan Celayeta’s answer
Tristan Cela…, , Marin County, CA
Wed Feb 3, 2010
The responses received will get you along the way. http://HopeNow.com, 888-995-4673, provides free counseling and guidance for distressed mortgages from HUD intermediaries.

There is an excellent real estate primer and reference at http://homebuying.about.com that you should bookmark for ongoing use.

http://www.mtgprofessor.com answers virtually all questions one can conjure regarding mortgages. This website is info only written by Jack M. Guttentag, Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania.
0 votes
Hannah Flieg…, Agent, Larkspur, CA
Wed Feb 3, 2010
If she has some cash she can "buy" equity by probably putting $70k down and then refinancing with a lower interest rate of say 4.5% if she pays 1 point.

This way her home is affordable to her with a lower interest rate and she benefits with a lower mortgage and a lower interest rate. If she doesn't have cash she may not be able to afford her home with her salary.

You could try the government program

there is a FREE workshop coming up in March in Novato she could go to for more information:

Good luck!
Hannah Fliegel
0 votes
Ute Ferdig, Agent, Newcastle, CA
Tue Feb 2, 2010
If the name of your soon-to-be former son-in-law is on the mortgage, he may want to get his name off the loan as he would continue to be responsible for the loan in the eyes of the mortgage company unless they release him from the loan and the only way that can be accomplished is by refinancing based on your daughter's income. If the home is more than 25% upside down, a refi will not be possible as the maximum loan to value ratio is 125%. She should discuss this situation with her divorce attorney and a loan broker.
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Dianne Hicks, Agent, Rancho Bernardo, CA
Tue Feb 2, 2010
I agree with Harold. Loan Mod is the best way to go. She can also contact HUD and they will help her through the process and advise her of her rights. They may not reduce principle but perhaps lower the interest which can make a big difference in payments.

I wish her luck!!!
0 votes
Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Tue Feb 2, 2010
HI Ch95610,
You may want to have your daughter contact the lender to start a Loan Modification.
You might want to have her get some counseling for free to help her jump through the hoops.
hopenow.com and other links are available on the website below.

Harold Sharpe
So Cal Homes Realty
(951) 821-8211

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