possible loan modification for non hardship in CA

[oldie]

First of, I'm thankful to this wonderful forum. This is first post and I thank you in advance for any of your suggestions.

Here's my story...

I paid WFB for a refi application (I believe it about $400) due to my high interest rate and found that when the appraiser from WFB valued my property for about 50% of what I paid for about 2 years ago.

Currently I do not have any problems paying the monthly. My goal was to lessen my interest rate and get a 30 year fixed as right now I am on a 10 year interest only and variable after.

My question is:

Can I qualify for a loan modification based just solely on the fact that my property value has gone down so much? I am able to afford the monthly, but concerned that he property is not worth keeping. So far I've lost my 20% down payment already and don't want to loose any more money on the property.

This is my first house and I was hoping that it would actually appreciate in value so that I can move to home that I can really see myself in in 5 years. This was my starter home. I've made a 20% deposit and never been late. Even though I had an interest only loan, I wold always pay extra so that it lessens the principal.

If I can not get a loan modification, I guess I will have to foreclose which basically it seems that I'm at a loss either way. So I have 2 choices.

1. Continue to loose money on a house that will take around probably 12 or more years to get back to its original/purchase value. By then all the other homes would have gone up in value.

2. Foreclose and take the credit hit, loose all the all the money I've invested in the house and live in an apartment for 7 years. Then hopefully get a house.

So does anyone have any insight if i can qualify for a loan modification given my current scenario? I fear that if I am asked to create a hardship letter, the only thing I can specify is substantial loss of value of the property.

Thank you.

[Moe Bedard]

oldie,

Welcome to the forum and thank you for joining.............

unfortunately, lenders do not consider loss of value a hardship..............


These are what most lenders consider to be generally acceptable hardships....

1. Loss of job or reduction in income
2. Death of the homeowner, spouse or family member
3. Illness of homeowner or family member
4. Divorce or separation
5. Forced job relocation by employer
6. Adjustable rate reset-payment shock


Home Affordable Modifications are designed to prevent foreclosures by making mortgage payments affordable for working homeowners struggling to retain homeownership. The plan is not intended to replace equity lost by home price depreciation.

investors are not offering principal reductions.



If your loans are the original purchase money loans, you should have a real estate attorney confirm this, the lender may not have any recourse against you for the deficiency as a result of foreclosure due to 580b.

[oldie]

Thanks for the reply ***.

So even if I explain that I may just walk away because of all the huge drop in value, under the loan modification rule they won't do it? Even though since I have the original purchase loan and they will end up at a lost?

I wish they would, but I suppose that's how it works there's nothing I can do.

[Moe Bedard]

they may have some modification available.............but they are given in situations of hardship, which I posted above as to what the lenders consider hardship.......................but they won't reduce the principal.