Our situation

[69nymets86]

Not sure if this is in the right place so mods feel free to move it.

We are currently upside down in our mortgage. Our home is worth approx 280k and our mortgage is 355k. We have a deferred interest loan and pay $1200 a month right now but it's scheduled to go up to $3000 per month next November (2010).

What are our options? Our loan is with Chase and we are current.

Thanks for any advice!!

[Evan Bedard]

Hi welcome and thank you for joining,

We are currently upside down in our mortgage. Our home is worth approx 280k and our mortgage is 355k. We have a deferred interest loan and pay $1200 a month right now but it's scheduled to go up to $3000 per month next November (2010).

What are our options? Our loan is with Chase and we are current.

You should definitely apply for a loan modification to get out of that and into a fixed rate mortgage. Have you already applied for a loan mod?

[69nymets86]

Hi Evan,

Haven't applied for a loan mod yet. Just doing the research at this point. I wasn't sure if they would give us a mod since we are current and our rate isn't supposed to go up until Nov 2010. I would love to apply for it now though and get this weight off my shoulders!

Erin :-)

[davephx]

31% of gross = affordable 1st.
Than other tests.
If your under 31% on first probably have to wait till goes higher in 2010.

[69nymets86]

Yeah, we're definitely under the 31% of gross right now. But when it goes up we won't be.

[lennox]

I have an option 1 loan. They determine your current DTI on the fully ammorized loan amount (option 3), even if you're only paying option 1 (interest only, or negative interest). With that being the case, you're over the 31%.

For us, we pay currently $2500 a month. But if you take our full principal and the remaining term of the loan (26 years), our PITI would be over $3000.00, and that's assuming the 3.5 adjustable rate, we're at right now. When it recasts, the rate could adjust to 6...7....8 percent. Right now the bank is considering our DTI at $3,200 versus $2,500 (which is option 1)

Apply Now! It's going to take the bank awhile to even get to the paperwork. With the way things are, even if you apply now, you probably won't get your first trial payment until February 2010

There are over 500 billion dollars in Alt-A loans right now. Most are set to recast in 2010 and 2011. Economists are predicting that when they recast, up to 80 percent of the homeowners with these mortgages will default because it will be impossible to make the payment after the recast. There are many economists that predict once these recast there is going to be another wave of foreclosures driving the housing market down again, and since a lot of these are in hedge funds....another drop in the stock market.

Even if it won't modify under HAMP, they may modify an in-house mod. Also a coming increase in mortgage payment is considered a hardship. And even if you are current, people that have these loans are considered immanent default.
T