Principal reduction? - Loan Modification Forum

seabell · 08-20-2009, 08:32 AM

Just starting mod... Is it worth going through this process without a principal reduction? I have been reading through these posts and wonder when some of these loans are upside down by 40 -50%, what is the point? Just to stay in the home and pay essentially rent to the bank? The chances of the value coming back is slim. Is it better to walk away and just rent somewhere else? I think of all the upkeep on this house, if all I will be doing is renting my house from Chase, why fix the roof, paint, trim the trees, etc. It seems like the banks should be fixing the equity in these homes with principal reductions so we have some reason to keep paying. Otherwise, won't people eventually just walk away anyway after realizing values may never be what they were?

Evan Bedard · 08-20-2009, 09:08 AM

Hi seabell,

Yes most people are upside down on their homes a large amount. But the reality is no lenders are offering principle reductions on any loans. I have maybe seen 3 in the past two years. Its really just a choice if you want to walk away and rent somewhere, or try to save the home for you and your family even though it seems there is no point. Many people also believe this economic crisis will turn back around in the next few years and house values raise up to normal as well...

seabell · 08-20-2009, 10:16 AM

I don't know which way to go...I have put 10 years of payments into this house, not to mention $150,000 down. I hoped it was my retirement. I can sell it now (have an offer) and walk with only $35000. I won't be able to find a rental for less than $1400/mo. I have a greatly reduced income with my business, so I won't qualify to buy anything else. $35K will be gone in no time. But Chase will most likely say that i still have equity, so i probably won't get the modification I feel like there isn't a good choice here. I can't afford the payment now. I am still current. If i try for the mod and don't get it, It will cost me more in the long run.

ugh_2009 · 08-20-2009, 10:50 AM

seabell, you can still qualify with some equity (if it's not a lot).

08-20-2009, 08:32 AM	#1 (permalink)
seabell Member Join Date: Aug 2009 Posts: 14 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Principal reduction? Just starting mod... Is it worth going through this process without a principal reduction? I have been reading through these posts and wonder when some of these loans are upside down by 40 -50%, what is the point? Just to stay in the home and pay essentially rent to the bank? The chances of the value coming back is slim. Is it better to walk away and just rent somewhere else? I think of all the upkeep on this house, if all I will be doing is renting my house from Chase, why fix the roof, paint, trim the trees, etc. It seems like the banks should be fixing the equity in these homes with principal reductions so we have some reason to keep paying. Otherwise, won't people eventually just walk away anyway after realizing values may never be what they were?

08-20-2009, 09:08 AM	#2 (permalink)
Evan Bedard LoanSafe.org Homeowner Guide Join Date: Aug 2007 Location: Southern California Posts: 2,168 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Principal reduction? Hi seabell, Yes most people are upside down on their homes a large amount. But the reality is no lenders are offering principle reductions on any loans. I have maybe seen 3 in the past two years. Its really just a choice if you want to walk away and rent somewhere, or try to save the home for you and your family even though it seems there is no point. Many people also believe this economic crisis will turn back around in the next few years and house values raise up to normal as well... __________________ Keep Fighting! Evan Bedard LoanSafe.org Support Team Please donate via paypal to LoanSafe.org to help keep this forum going The comments by me and the materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. Most of the information you find here is easily available on the internet. You should contact your attorney to obtain advice with respect to any particular issue or problem. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. Please Read our Privacy Policy and Legal Disclaimer Here.

08-20-2009, 10:16 AM	#3 (permalink)
seabell Member Join Date: Aug 2009 Posts: 14 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Principal reduction? I don't know which way to go...I have put 10 years of payments into this house, not to mention $150,000 down. I hoped it was my retirement. I can sell it now (have an offer) and walk with only $35000. I won't be able to find a rental for less than $1400/mo. I have a greatly reduced income with my business, so I won't qualify to buy anything else. $35K will be gone in no time. But Chase will most likely say that i still have equity, so i probably won't get the modification I feel like there isn't a good choice here. I can't afford the payment now. I am still current. If i try for the mod and don't get it, It will cost me more in the long run.

08-20-2009, 10:50 AM	#4 (permalink)
ugh_2009 Senior Member Join Date: Jun 2009 Posts: 126 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Principal reduction? seabell, you can still qualify with some equity (if it's not a lot). __________________ .

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