Well, hello, fellow Vegan! Join the club and commiserate with us fellow sufferers.
Take your one and multiply by seven. That's where I'm at, so don't feel bad.
What side of town is your dog, I mean property?
We need to compare notes. Have you tried communicating with the lender? From what I've gleaned, you're wasting time unless you've already been in default on the loan for at least 3 mos. They won't even consider a loan mod for a solvent borrower, let alone one who holds an investment property.
If you do a search for all my posts, there is a ton of info of what my experience has been and is now. There is no cut and dried answer. Every lender is different and plays by a a different set of rules. It's the wild, wild west out there - and it changes DAILY!
I will reiterate my paradigm for those investors who are underwater, especially in Nevada:
1) Shield your assets well in advance of defaulting. Nevada is NOT an anti-deficiency state like California, so the lender CAN and MAY seek a deficiency judgment against you and try and seize any exposed assets/income (other property, bank accounts, cars, wages, etc.). Consult with a very experienced asset protection attorney. I can give you some names.
2) Stop throwing good $ after bad. You bought at the peak, but you PULLED ALL THE CASH OUT and then later REFINANCED. You must know by now that this is in your favor and here's why. Your property is too far underwater for values to come back anytime soon. If you recently read the article in the RJ, it will take AT LEAST 10 years for 2006 values to return.
So, no rocket science here. You already sucked all the cash out and hopefully you socked some of it away offshore (just kidding). You have to make a choice which, based on my guess of my own outcome, I don't think it will be a) possible that the bank will drop the rate for several reasons, or b) possible that they will go for a principal redux even though that's the logical thing to do and keep you paying something (but bankers are morons). And even if they do lower the rate, does it really make sense to carry the property when all it does is break even? That makes no fiscal sense given that you can just DUMP this dog and buy a cheaper one that will CASH FLOW + and possibly even be worth more than you paid - certainly by 10 years!
My acid test for a loan mod: the lenders would have to lower the rate far enough for me to have a positive cash flow and vacancy rate factored in. If not, I will SHORT SELL them and THEY will take the huge losses, not me. Failing that, a deed in lieu. Whatever happens, they are the ones holding the bag at this point. All I'm doing is positioning myself for the most advantageous maneuver FOR ME so I'm untouchable - and buying time - - - for now. It's business, not personal
So, you're already in the driver's seat as long as you don't wuss out and let the bank have their way. You already got your cash out. Good for you. That's one for the good guys! Only impact? You will have to pay taxes on the amount the bank forgives in a short sale or foreclosure, so you will need an aggressive accountant that can write it all off or declare you insolvent and flush it for good. If that doesn't cut it, make sure you're clear and file BK. Screw 'em all! You have to think of yourself in this day and age. No mercy. Banks and government are not your ally and will NOT HELP YOU. They care less about you or your personal circumstances. Why should you care about theirs?
There's just way too many ways to strategically blow this off and walk as well as take advantage of the many opportunities to make us money than to let some bad timing and corrupt banks and their past cowboy lending policies get in our way!
Either the bank cuts a great deal to get you in a + cash flow position or you simply short sell/walk - and move onto the next deal. It's that simple.
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