Franklin Mtg Serv info and request for help

[eddiebaum]

1/2007 I bought a home under appraised value. App Value 210K..Purchased for 196k which inc closing costs. I had a 8.5-9% fixed 30 yr loan in order, but 3 days before closing, my other house did not sell (on contingency) and I did not have my down payment. My Mtg. Co, Great Southwest said..no problem as values are going up and it is under app. value, we can give you a 100% loan. Int rate will be higher, but no problem, after 1 year you can refi back down to a resonable rate. Here is what I got....12.7 fixed CORE 50/30. I pay 359 payments of $2,078.09 for 30 years = $737,466.40 then a balloon of $182,722.80 for a TOTAL of $928,757.11. I should have walked out. I did not know this until I was almost all of the way through signing docs, as this only appears twice in the loan docs. I did call the agent...but he said it was the best and only deal for me and just think of the high payments for 1 year as my down and I could refi. in 12 months. I had a 640 credit rating! One year later, I went to refi, I was upside down $40,000. Now 2 years later, I am upside down $110,000.

I was offered a modification through Loss Mitigation. 9.7 adj for 3 years, then 12.7 for 28 years based on the value of my home $115,000. Then a balloon after 31 years for $110,000. I can go around the corner in my subdivision and get a bigger home with a nicer pool for $95,000! Except my credit is now shot. I have not made a payment in 13 months! I did make the 3 payments to get the modification whichtook a year. But I sent it back. I will pay the appraised value, or meet them half way on the principle if they lower my rate. They told me that they can only lower it 3%. They had me under forcloseure but suspended it when they started modification. I have to reapply since I did not accept their lousy offer. These loan were sold as securities by Merrill Lynch in a 3.9 billion dollar bundle. I looked up the SEC regulations on these securities and Loss Modification has lots of ways to save the loans but seems to choose not to. I even offered to pay the 196K if my rate was 5%...they refused...If I have to pay $196,000, then I should be living in a $196,000 house and not a $115,000 house.....Any ideas? I think I got shafted twice by these guys...

[eddiebaum]

I forgot to say that my income fell by more than half as I was a real estate agent and hung in there too long....Also I did not find a 3 day right of recision...do you get one in a purchase? I can't recall....I thought it was only a refi....Help...I am in Arizona

[Dan Bailey]

eddiebaum,
Glad you found the forum and posted...

If I am reading correctly, you need to decide if you want to stay in the home or not. What they are offering(payment on 115-the apraised value now) with a balloon payment after 31 years is a way to stay in....

What you are wanting, is an actual principle reduction with a low fixed rate.....that is just not being done. We havnt seen a true principle reduction being done anywhere.

This seems like a "home" vs "investement " question. That is something you will have to decide.

In my state ( NC) there is a 3 day right of recision on refi.

[eddiebaum]

I would accept the high principle but would want a 30yr fixed at a lower rate to complete the loan...not 32yr and a giant balloon. They inflated the home prices with the giveaway loans by creating high demand. If I have to pay $196,000, I should be living in a $196,000 house and not a $115,000 house. I should not have to assume their risk. Have they ever lowered a 12.7% fixed to 5%-5.5%. With a 640 credit rating did I get hosed?

[snapple candy]

eddie,
12.7% is highway robbery. So is 9.7%. Many lenders will go down much lower for initial 3-5 yrs. So far mine is willing to to 2.75% ending at 4.75% but this is on the lower side of what most are getting and varies with the lender. I can go rent down the street for 1/3 of my current payment (have rejected their mod offer too). I am prepared to do just that if I cant get an affordable payment.