Mortgage/Refinance Problem ***Please Help!***

Updated on January 31, 2011
R.L. asks from Farmington, MI
7 answers

I have a huge problem and don't know what to do. 5 years ago my husband decided to refinance our home, and during this process he ended up in the hospital. He almost didn't survive, but during all this the refinance was almost complete and needed to be done. Since he was so sick, I got myself into a really bad balloon loan. Now, the bank wants the full mortgage payment next month and they refuse to refinance my home with a better loan because it won't appraise for the amount of the loan (due to the economy). I have good credit, the appraisal is the problem, whats worse is I've been with the bank for 20 years! Every place I call can't help unless I'm already behind on my payments. I pay my bills on time, and they only help those that are already in foreclosure. I don't know what to do, I don't want to walk away from home, but it doesn't look like I have much of a choice. Any advice?

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answers from New York on

You may need to take out a personal loan for a significant portion of the remaining balance (to make up the difference b/w the principle and the appraised value) and go from there.

Essentially, if you have $200,000 remaining on the principle of your home, but it only appraised for $120,000 you would need to apply for an $80,000 personal loan and give that $$ to the mortgage lender so that what you owe equals what your house is worth, then refinance the remaining balance.

This will mean making two loan payments each month, but you will stay in your home and not be in default with your mortgage.

2 moms found this helpful


answers from Chicago on

They are wrong!! You do NOT have to be behind on your mortgage to do a loan modification. Call your mortgage company & ask for the loss mitigation department. You need ANY of the following to qualify for a modification: loss of income, decrease of income, missed payments, increase in payments, adjustable mortgage, balloon mortgage. There are so many reasons you can get a modification, not just delinquency!
Check out this website for more information:
It has tons of information about qualifications for a modification. Once you look thru that site, then call your mortgage company. It is called a "Making Home Affordable Modification".
Don't give up until you have to!! Oh, and you can also call the HOPE hotline regarding this & they will guide you in the right direction. There number is: 888-995-4673
They are very, very helpful there as well!
Good luck!!

1 mom found this helpful


answers from New York on

What's the difference between the amount you owe compared to the appraised value? With good credit you could get a personal loan for that amount, and refinance the appraised value. Of course this usaully takes at least 6 to 8 weeks. Why did you wait until last minute?

I know home values have dropped, but I can't believe, they dropped that much considering you've made 5 years of payments, and in additional must of had some type of value in the house before refinancing. Something just doesn't sound right.

Your best bet may just be to walk away.



answers from Minneapolis on

check into the Making Home Affordable REFINANCE program!! If you loan is serviced by Fannie Mae or Freddie Mac (not the ones who send you the bill. you can look it up on the site to see: ).

They do NOT do appraisals on refinances!! This is the only way we were able to refinance our intrest only loan which would start making us pay interest which means the payment would dramatically go up in 7 years. now we have a 30 year fixed, much safer.



answers from Minneapolis on

The making home affordable program is not really all it is made out to be and has left so many in a worst position than they were in to start with. If you do consider that route and the bank offers you a "trail" period for you "new" loan payment PLEASE make sure that you are making your full normal payment or putting the differance of your "modified payment" and your "normal payment" into a savings account. I say this becuase during the trial period your loan will be considered to be in default because you are not making full payments and after the trial period they will most likely deny you of the modification and demand thier money or the forclosure process will begin. It is not a fun mess to get into!!

Go to this link and read this story that was on the front page of our Sunday Star Tribune Paper



answers from Detroit on

We looked at refinancing a couple months ago to simply lock in the current low rates (our mortgage is currently on an adjustable rate - which is wonderful for now when rates are low but could prove dangerous if/when rates go up - as they are likely to do). Anyway, our mortgage broker told us about a program where you can borrow something like 120% of the appraised value. So if you currently owe more than your house is worth, that additional 20% in appraised value might bring you closer to even. For example, if your house is currently worth 165,000 but you owe 200,000 (because it was once worth a lot more), you can borrow 198,000 (which is 120% of the 165,000 value) which means you would only have to worry about covering the 2,000 difference.

I would call a mortgage broker and ask them about it (we use Tranex Financial in Southfield - ###-###-####) to see if this option is still available. Even if it is not, a mortgage broker is probably your best bet to find out about all of the options out there (since working just with the bank doesn't seem to be as useful in researching different options - you are not the first person I've heard to have this trouble with a bank).


answers from Biloxi on

Try the home save program with Naca.
They are a non profit that works with mortgage companies on your behalf. My sister used them.
Good Luck.

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