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New Member
toshapethefuture
Posts: 5
Registered: ‎09-28-2012

Underwater mortgage & seeking advice.

[ Edited ]

At the recommendation of my fiancee, I am posting in hopes of getting some insight on what I should do in regards to my mortgage.

 

Some quick info:

  • Monthly mortgage payment: $1365
  • Mortgage balance: $179,500
  • Mortgage terms: 30 year fixed rate loan at 5.50% through JPMorgan Chase
  • Mortgage is not backed by Fannie Mae or Freddie Mac
  • Condo fee: $515 a month
  • Credit score: in the 790~815 range

Details:

 

I fall under the "Borrowers who are current, but underwater" category of the settlement information. I originally bought the condo nearly seven years ago, paying $227,000 with a $3000 sellers assistance from the previous owners. I put 20% down to avoid a PMI, and my mortgage was a 5/1 ARM at 8% interest. Four years ago I refinanced, borrowing $190,000 on a 30 year fixed rate mortgage with a 5.50% interest rate, and the unit was appraised for $199,000. The property is a condo unit in Greenbelt, in Prince George's County, Maryland, which has received some national press for the poor status of the housing market in the county, and the number of foreclosures and underwater properties. About three & a half years ago several condo units in my building and surrounding area were foreclosed, selling at a fraction of what I paid, devaluing my property to the point that my mortgage principal was more than what my property was worth. 



 

Earlier this year, in doing research on refinancing my mortgage I was made aware of just how much this has affected the value of my property, I have contacted JPMorgan Chase by email twice, and received responses, but their response is for me to apply for mortgage modification assistance, a system that was in place before the federal settlement in February 2012, and assistance that I do not seem to qualify for when reading through the details. I am hoping the settlement can help me by reducing my principal, and lowering my mortgage payment. When I look at estimates for the property (using Zillow, the Washington Post real estate guide, looking at P.G. County taxes, looking at other recent sales in the development), the value of the property looks to be in the $100,000 to $140,000 range, and based on what I still owe that means the loan-to-value is 128% to 180% less than what I originally paid. About 39% of my annual income after taxes goes towards my current mortgage; I have not missed any payments, but with so much of my income going to the mortgage, then about 15% just going to condo fees, and then 12% going to other debts (student loan, car loan) I am finding it difficult to build savings. On top of this, my condo fee (which covers everything except cable & internet, and my condo insurance).

My fiancee & I want to move in a year, and we have talked about different possibilities for the condo, either refinancing & continuing to make payments and renting it out (we are five miles from a large, public university), or selling the unit at a major lose. If we sold the unit, I don't know if we try to default on the current mortgage and force a short sale. I am stressed out about all of this, and I am hoping this is a good first step to figuring out what I should do.

If there is additional information that is needed from me, please let me know.

Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009

Re: Underwater mortgage & seeking advice.

Best of luck to you.  I can't answer most of your questions, but I'm sure you'll get some good advice here.  I realize you looked at other sources as well, but I just wanted to say that I would put little to no stock in what Zillow has to say.  I had a condo in DC and Zillow was nowhere near correct.  At the best of times, condos in my building were selling for around $410K.  When we sold earlier this year, we had to sell for $367K.  However, Zillow gave me estimates over the years anywhere from around $200K to upwards of $600K.  Hopefully you're not as underwater as you think.


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Chbraswell
Posts: 152
Registered: ‎07-02-2012

Re: Underwater mortgage & seeking advice.

For modifications those my have adverse affects to your credit so i would definitely make sure you seek all other options because you try those.  Especially if you can afford the loan or very credit orientated.  Depending on your loan you qualify for the government refinance program called harp for fannie and freddie loans. 

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New Member
toshapethefuture
Posts: 5
Registered: ‎09-28-2012

Re: Underwater mortgage & seeking advice.


Walt_K wrote:

Best of luck to you.  I can't answer most of your questions, but I'm sure you'll get some good advice here.  I realize you looked at other sources as well, but I just wanted to say that I would put little to no stock in what Zillow has to say.  I had a condo in DC and Zillow was nowhere near correct.  At the best of times, condos in my building were selling for around $410K.  When we sold earlier this year, we had to sell for $367K.  However, Zillow gave me estimates over the years anywhere from around $200K to upwards of $600K.  Hopefully you're not as underwater as you think.


Thanks Walt_K, I'm hoping this does lead to some good advice. Just curious, what part of DC was your condo?

 

New Member
toshapethefuture
Posts: 5
Registered: ‎09-28-2012

Re: Underwater mortgage & seeking advice.


Chbraswell wrote:

For modifications those my have adverse affects to your credit so i would definitely make sure you seek all other options because you try those.  Especially if you can afford the loan or very credit orientated.  Depending on your loan you qualify for the government refinance program called harp for fannie and freddie loans. 


15 years ago I had very poor credit (college age w/ a $11k limit and no realy concept of credit). I have since repaired that, and the past three years I have kept credit usage to a minimum (no balance on my two credit cards, and then one purchase with no interest for 18 months, paid it off in half the time).

For the federal refinance program, my mortgage is not backed by Fannie or Freddie Mac. I have contacted my lender, as well as looked at Maryland state information. I was referred to the Maryland Hope Organization, which then referred me to a local housing organization, but I do not think I meet their required qualifications, in part because I am current on payments.

Regular Contributor
Chbraswell
Posts: 152
Registered: ‎07-02-2012

Re: Underwater mortgage & seeking advice.

Unfortunately there are not a lot of programs to help people who are looking for a lower payment and principal reduction if  you are current and can afford your loan.  The only other thing I could possibly think of is if you qualify to be reviewed under the department of Justice settlement that happend a few months back.   However, I do not believe you would qualify if they have not already contacted you.

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Current: EXplus:677 Eq 642 TU 727
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Moderator Emeritus
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Underwater mortgage & seeking advice.


toshapethefuture wrote:

At the recommendation of my fiancee, I am posting in hopes of getting some insight on what I should do in regards to my mortgage.

 

Some quick info:

  • Monthly mortgage payment: $1365
  • Mortgage balance: $179,500
  • Mortgage terms: 30 year fixed rate loan at 5.50% through JPMorgan Chase
  • Condo fee: $515 a month
  • Credit score: in the 790~815 range

Details:

 

I fall under the "Borrowers who are current, but underwater" category of the settlement information. I originally bought the condo nearly seven years ago, paying $227,000 with a $3000 sellers assistance from the previous owners. I put 20% down to avoid a PMI, and my mortgage was a 5/1 ARM at 8% interest. Four years ago I refinanced, borrowing $190,000 on a 30 year fixed rate mortgage with a 5.50% interest rate, and the unit was appraised for $199,000. The property is a condo unit in Greenbelt, in Prince George's County, Maryland, which has received some national press for the poor status of the housing market in the county, and the number of foreclosures and underwater properties. About three & a half years ago several condo units in my building and surrounding area were foreclosed, selling at a fraction of what I paid, devaluing my property to the point that my mortgage principal was more than what my property was worth. 



 

Earlier this year, in doing research on refinancing my mortgage I was made aware of just how much this has affected the value of my property, I have contacted JPMorgan Chase by email twice, and received responses, but their response is for me to apply for mortgage modification assistance, a system that was in place before the federal settlement in February 2012, and assistance that I do not seem to qualify for when reading through the details. I am hoping the settlement can help me by reducing my principal, and lowering my mortgage payment. When I look at estimates for the property (using Zillow, the Washington Post real estate guide, looking at P.G. County taxes, looking at other recent sales in the development), the value of the property looks to be in the $100,000 to $140,000 range, and based on what I still owe that means the loan-to-value is 128% to 180% less than what I originally paid. About 39% of my annual income after taxes goes towards my current mortgage; I have not missed any payments, but with so much of my income going to the mortgage, then about 15% just going to condo fees, and then 12% going to other debts (student loan, car loan) I am finding it difficult to build savings. On top of this, my condo fee (which covers everything except cable & internet, and my condo insurance).

My fiancee & I want to move in a year, and we have talked about different possibilities for the condo, either refinancing & continuing to make payments and renting it out (we are five miles from a large, public university), or selling the unit at a major lose. If we sold the unit, I don't know if we try to default on the current mortgage and force a short sale. I am stressed out about all of this, and I am hoping this is a good first step to figuring out what I should do.

If there is additional information that is needed from me, please let me know.


Look at doing a HARP refinance...  if you are current on your mortgage, and  your mortgage is backed by Fannie Mae or Freddie Mac, you should be able to refinance to a lower interest rate.    Keeping the condo and renting it out seems like a good option, if the rents in the area are comparable or more than what your note will be after the refi.    If you rent it out, you can sell it later on, or just keep it as an investment property. Maybe even let your kids stay there if they go to that university for school.

I would start looking at a HARP Refi immediately.

 


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Moderator Emeritus
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Underwater mortgage & seeking advice.

http://www.zillow.com/mortgage-calculator/harp-eligibility/

 

 

Look at the HARP 2.0 program... it seems taylor made for your situation.


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New Member
toshapethefuture
Posts: 5
Registered: ‎09-28-2012

Re: Underwater mortgage & seeking advice.


webhopper wrote:
Look at doing a HARP refinance...  if you are current on your mortgage, and  your mortgage is backed by Fannie Mae or Freddie Mac, you should be able to refinance to a lower interest rate.    Keeping the condo and renting it out seems like a good option, if the rents in the area are comparable or more than what your note will be after the refi.    If you rent it out, you can sell it later on, or just keep it as an investment property. Maybe even let your kids stay there if they go to that university for school.

I would start looking at a HARP Refi immediately.

 


Unfortunately my loan is not backed by Fannie Mae or Freddie Mac. Checked in to that when I contacted Chase, and they confirmed that information.

Going to update my OP with that info.

Thank you for the suggestion though.

 

Moderator Emeritus
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: Underwater mortgage & seeking advice.

You could take out a personal loan to pay down the balance in oder to refinance. Not sure this will help.

I would recommend that you pay to have the house appraised at this point.


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