seeking advice regarding refinancing an Indymac 1st mortgage

[azure]

I've got a first mortgage with Indymac (amount owed $236,000; at 7.125%) on a property that Zillow has at $133,000. And there's a second mortgage of $73,000 (at 7.35%). I'd like to refinance the first mortgage but when I first requested one (a year and a half ago), I was told the property value was too low, and that I'd have to fork over a hefty amount that I don't have (i forget how much). This is an investment property that's rented out (and the rent received is about $1000 less than the monthly costs involved (mrtg payments plus insurance and taxes)).

What's the best plan for me? (I'm told by some that i should refi the 1st and then settle the 2nd (by stopping payments, waiting/ignoring the lender for 6 months, and then settling for hopefully 10-20% of balance)).

thanks

[Evan Bedard]

Hello Azure,

The only problem is in order to qualify for a refinance on an underwater property you must go through the Home Affordable Refinance Program (HARP) and your mortgage must be owned by either Fannie Mae or Freddie Mac. I agree it would be a good plan to try and settle your 2nd after completing the refi and here are the basic eligibility requirements for HARP.

Home Affordable Refinance Program (HARP)

You may be eligible for HARP if you meet all of the following criteria:

• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
• The current loan-to-value (LTV) ratio must be greater than 80%.
• The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

If your loan is owned by Freddie Mac, you may check your potential eligibility for HARP here.
If your loan is owned by Fannie Mae, you may check your potential eligibility for HARP here.

[azure]

thanks Evan. unfortunately, the loan isnt a freddie mac or fannie mae loan. is there any hope of refinancing, with that being the case?