Ballon payment mod on second property?

[thais0n]

My story is that I own a condo in Northern Virginia. Bought in 05 for $329K. Loan was an IO 80/20 5/1 ARM. My rate resets on my first mortgage next Sept. My second mortgage is a $65,000 balloon payment due in full next Sept. While I was still living in the condo, I thought I would be proactive and start the mod process with Wells Fargo (my investor is Freddie Mac).

I called their home equity department seeking to somehow get rid of my pending balloon payment. I was told that they could not modify my second mortgage without first modifying my first mortgage (Which is also held by Wells). So I started the process of the modification on the first. I was recently denied, saying I had too much money left over each month...and according to them I had no problem making my mortgage payment. Which is true. But, I can't afford the balloon payment! So I called the equity department and told them I was denied on my first, and they recommended a HARP refi. The only problem there is that it would only refi my first mortgage, still leaving me with that balloon payment.

Recently, my wife and I purchased a new home. The price was too good, the rates were so low...it was everything we wanted, and we were able to get in there with little cash out of pocket.

So now, I heard that I was rejected for a HARP refi because I am too far underwater on my condo.

What can I do??? I realize from Wells' perspective I can make my mortgage payment. But it seems no matter what I do, no one is paying attention to my balloon payment. I say it over and over, and its doing nothing.

[Evan Bedard]

Hi thaison welcome and thank you for joining.

It is going to be very difficult to get a modification on the 2nd especially since it is an investment property. Have you ever considered trying to settle the 2nd loan for maybe 10-20% of the remaining balance?

[thais0n]

Wouldnt that kind of settlement be a hit to my credit?

I heard a mention from one rep at Wells saying they have some new "Ballon payment modification" but its only for people who are within 6 months of the balloon payment date....and I am more than a year out. So from their perspective, I am not an immediate threat of loss. The thing is, I do have the money to cover the balloon, but it would totally wipe me out...not a position I want to be in. I think since I was proactive, I will just keep pushing and fighting....I still have a year. I don't know why its so hard for them to just push out the balloon payment date? My payments can stay the same.