any hope for those of us with two properties with ARM loans?

[Ginko]

We downsized from our home of 25 years and also own a rental property since 1998, both have option ARM loans. The idea was to sell the 98 home and use proceeds to refinance the home we bought. Market crashed and we own both, or should I say the bank owns them. We put 200k down, alas that seems to have evaporated and HOPE says they can not even counsel people who own two homes. We did of course try very hard to sell to no avail. Neither home is upside down yet, but I am sure it is coming. We aren't behind in payments and have good credit. We'd like to stay and pay both but now don't qualify. We rent but the rent the house we intended to sell but it doesn't cover the payment.
Any advice?

[firstsource]

To me having a roof over your head is the utmost concern.
Here are a few if's.

If the value of the home you live in is under the FHA county limit, then you can probably fit into the FHASecure program. If the value is over the limit then you might be able to fit if you can qualify for a 2nd in addition to the first mortgage. Your minimum payments would rise of course because you have been in loans that required a payment equal to less than 2% interest, but it is worth checking into.

For instance, Loan limit is 362K, your home is worth 450k, you owe 400. You could get the FHASecure loan for loan limit and get a 2nd for the balance. Normally that is not allowed for FHA loans, but is one of the loopholes.

Charles

[mzh1901]

Originally Posted by Ginko

We downsized from our home of 25 years and also own a rental property since 1998, both have option ARM loans. The idea was to sell the 98 home and use proceeds to refinance the home we bought. Market crashed and we own both, or should I say the bank owns them. We put 200k down, alas that seems to have evaporated and HOPE says they can not even counsel people who own two homes. We did of course try very hard to sell to no avail. Neither home is upside down yet, but I am sure it is coming. We aren't behind in payments and have good credit. We'd like to stay and pay both but now don't qualify. We rent but the rent the house we intended to sell but it doesn't cover the payment.
Any advice?

Hi Ginko;
I am sort of in the same situation except that I own several rental properties.
I cashed in my retirement money to buy them and really have no choice but to try to hang on to them until the market turns. Right now, they're upside down and are not worth what I paid for them. I can't afford my residential property and a vacant rental in Southern Cal.
Did anyone reply to your request for advice? My direct email is: \. Thanks

In response to both of your postings - no not your's First Source, we will address that later. You are both going to feel even more heat with Option ARMS if you are making just the minimum payment amounts. They will continue to accrue negative interest to the Principal until you hit the ceiling (110%, 115% to 125%) at that point they will revert to an amortized product with not so pretty rates and terms. As the principal goes up these days, so the value goes down.....ugly but true. At all costs retain the property that is your primary residence, do so even at the expense of the investment properties, I am afraid to say, lousy thing for an underwriter to condone, but I am also human and realistic.

Have either of you contacted your lenders regarding your situation? Have you discussed options and potential solutions with them. Actually who are your lenders/servicers, much can be gleaned from who they are as to how likely they are to work with you under the circumstances.

Pull out all of the closing documentation and determine when the worst case events will occur, ie reaching the ceiling and how far you are from it. The investment properties are difficult to modify, investors/lenders take a high road there. Primary residences, however, a much different story, but the kicker is that these are Option ARMS and they want to book that unearned interest as "income" to their bottom line for as long as they can.

Get the facts out - balances at inception of the loan, present balances, values, location, rates, type of transaction tied to the existing loan, ie purchase or refinance. All vitally important information to allow some good solid suggestions. mzh1901 are your loans Option ARM's or other product, or better yet a combination of products?

Please if both of you would review your documentation and for mzh1901, could you please start your own thread, then we can keep the data straight for you personally in direct relationship to your problems then address them in an organized way. You will get more input that way from more of the members and more ideas and possible solutions. You are not alone here in this venue and we all want to help as best we can, get the best coverage you can with your own story and we will help to the best of our ability. We really do care and want to help.

firstsource - Please I have reviewed all of your postings and as Andrew put it delicately last, are you trying to drum up business? This is not the appropriate place to do that, if that is the case.

I would not question that, if were it not for all of your postings go to product and extolling the virtues of the product, sounds like a Loan Officer to me. The FHASecure product is just dandy, I have underwritten my share of them, however, at this point we need to ascertain, just what these folks have in the way of alternatives and a new loan just may not be the answer. Frankly it is putting the cart before the horse, we need facts and information to guide, and make solid recommendations predicated on each individual's unique circumstances. So, please let's get off the one track FHASecure solution and try to make some headway with each forum members situation, which most likely will not involve a new loan, just trying to tame the one that they are already in or tame the lender they are already involved with. I say this with all respect and kindness, as it is becoming worrisome to me.

[mzh1901]

Originally Posted by Poppy

In response to both of your postings - no not your's First Source, we will address that later. You are both going to feel even more heat with Option ARMS if you are making just the minimum payment amounts. They will continue to accrue negative interest to the Principal until you hit the ceiling (110%, 115% to 125%) at that point they will revert to an amortized product with not so pretty rates and terms. As the principal goes up these days, so the value goes down.....ugly but true. At all costs retain the property that is your primary residence, do so even at the expense of the investment properties, I am afraid to say, lousy thing for an underwriter to condone, but I am also human and realistic.

Have either of you contacted your lenders regarding your situation? Have you discussed options and potential solutions with them. Actually who are your lenders/servicers, much can be gleaned from who they are as to how likely they are to work with you under the circumstances.

Pull out all of the closing documentation and determine when the worst case events will occur, ie reaching the ceiling and how far you are from it. The investment properties are difficult to modify, investors/lenders take a high road there. Primary residences, however, a much different story, but the kicker is that these are Option ARMS and they want to book that unearned interest as "income" to their bottom line for as long as they can.

Get the facts out - balances at inception of the loan, present balances, values, location, rates, type of transaction tied to the existing loan, ie purchase or refinance. All vitally important information to allow some good solid suggestions. mzh1901 are your loans Option ARM's or other product, or better yet a combination of products?

Please if both of you would review your documentation and for mzh1901, could you please start your own thread, then we can keep the data straight for you personally in direct relationship to your problems then address them in an organized way. You will get more input that way from more of the members and more ideas and possible solutions. You are not alone here in this venue and we all want to help as best we can, get the best coverage you can with your own story and we will help to the best of our ability. We really do care and want to help.

Hi Poppy;
I'll figure out how to work this thing and start a fresh thread as you suggest. I'll also get some details together & will be back later today. FYI my biggest problem is that I only have rental income that covers about 50% of my expenses. I was making a living rehabbing properties until the market fell. Been unable to find a job but have some hopes for an opportunity in the next couple of weeks. Whew! It's been tough!

I am still groping around too, but I have found that if you go directly to the "Tell Your Story" Forum, you can start a fresh thread with a lots of other people.

There is a new thread clicky kind of thing at the top. Very technical stuff here outside of the mortgage industry so I am using the latest in techno speak. LOL