This sounds like a scam but I am hearing that companies can buy your mortgage and cause you to have a much lower mortgage payment. Any info?????

Asked by Nalatia Grenovich, 90021 Fri Oct 22, 2010

Let's say that you owe $900,000 on your house and then this company gets your balance down to $300,000 reducing your monthly payment. How is that possible and is it legal?

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VIOLET Schmid, Agent, Beverly Hills, CA
Sat Oct 23, 2010
Hey Nalatia:)
I have been in the Real Estate business for the past 36 years and have seen it all. This is actually nothing new. Investors can purchase your mortgage and become the bank and usually they keep your mortgage at what ever you already signed with your present mortgage lender is what they will honor, and they end up making money on your deal. That is why you some times get a notice from your present lender telling you that However, YOU can re-finance with a mortgage company of your choice and reduce your mortgage, especially now, there are 5 yr fixed down to 2.75% and 3.75% fixed for 30 yrs. depending on the amount you refinance and the equity you presently have on your home. You are welcome to email me any time. Have a great day!
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Kwesi Childr…, , Beverly Hills, CA
Fri Oct 22, 2010

The big question is what happens to the 600k that they were able to get removed?! There is something now, as an alternative to doing a short sale, its called a "short pay refinance". What that is, is kinda like a short sale same process but its a refinance, so you get to stay in the home. This program is only for those homeowners that HAVE NOT been late on their mortgage, showing that responsibility does pay off. You would usually refinance FHA only on these. It all depends on if you want to stay in the house or not. If you dont want to stay in your home, then a short sale would be best. You just want to be careful, because you dont want to go through with some company that will promise you things and it not happen, or it does happen and they(the bank) come back to you later trying to sue you for the remainding balance. Whatever you do, just make sure EVERYTHING is disclosed, so that if a situation where you have to go to court behind them comes up, you covered yourself!
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Emily Knell, Agent, Huntington Beach, CA
Fri Oct 22, 2010
First of all a $900K loan amount would likely never become $300K.

An example of the type of company or group of investors you're talking about are ones, where let's say you owe $700K, but the house is worth $400K, an investor would come in & negotiate a short sale with your mortg. co. for current fair market value. Then the investor is the new owner and they're going to turn around & charge you about 9% interest at the new $400K mortgage loan amount. This is legal if it is disclosed to the bank that you're going to remain in the house & make new mortg. payments to the new investor.

However, the better deal for you, is to just do a short sale. If you can do that without missing any payments you could potentially purchase again immediately. OR if you have been missing payments, you need to wait 12mos to purchase again.

When you purchase again as a new buyer at new current market values, your interest rate is going to be whatever the going rate is for an FHA loan, which will probably be much less than 9%. Then you can build up new equity from the bottom with a favorable interest rate.
562-430-3053 cell
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Sergio Medina, Agent, Long Beach, CA
Fri Oct 22, 2010
Natalia, if you are going through a true hardship ; meaning that there has recently been unprecedented events in your life that are causing you a "Hardship" that is making it very difficult to keep up with your mortgage payment, then you are probably eligible for a loan modification of some sort. Some modifications are temporary while some are permanent depending on your lender and your circumstances. There are NPO's that can answer your question more thoroughly or you can contact the bank that is servicing your loan and ask them directly. Good luck.
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Jodie Franci…, Agent, Studio City, CA
Fri Oct 22, 2010
Hi Nalatia,

There is a lot of fraud going on right now, and as Endre said, if it sounds too good to be true...
If you need help, contact your lender directly. Most lenders have the forms and instructions online to help you with a loan modification. Many of these companies offering to reduce your mortgage or do a loan modification are not legitimate. Best of luck to you.

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Endre Barath, Agent, Beverly Hills, CA
Fri Oct 22, 2010
Nalatia, my father always told me that if it sounds "too good to be true" generally it is. What happens to the $600,000? The company can not make it go away, if you owe $900,000 than the only thing I can think of is maybe it is an 5/1, 7/1, or 10/1 ARM type loan they are converting it to. If you need more help feel free to reach out directly.
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