Is a mortgage modification negotiable?

[Jf24]

My situation.

Discharged ch 7 in 2012. Discharged both first and second mortgage. First $240,00 second $55,000. Zillow value now at $250,000

Modification just offered on first to avoid FC.

Principle $272,000 at 4.625% interest

We are hoping to stay in this house but now think it's a bad idea. If we stay and in a few years it comes up from being under water I won't be able to sell until the second mortgage lean is paid. Am I correct on this?

Would we be able to negotiate with the bank (actually a credit union) to offer the zillow value for the principle and for them to drop the lean on second mortgage? Can they even just drop the lean? Same cu has second mortgage.

[justbroke]

You can negotiate whatever you want to negotiate, but getting a Principal reduction is not done that often. The second would still hold their lien and as you speculate, the second would be able to demand payment upon a sale. You would have to short sell or negotiate with the second as a settlement in order to get rid of the second.

I would not use Zillow as any barometer of value. Zillow shows my house at $725K. I don't believe them because another system shows much less (under $600K). (In fact, Zillow may have your house over-valued.)

[Jf24]

Since the second mort is with the same CU does the make a difference? Easier it negotiate the clearing of it.

If I walk they will be in the same boat as if they would take my offer. If I walk I'm still not responsible for the second, they will have to go throughout the whole FC process and be stuck with a house that may be hard to sell. ( had an oil spill, 130 gallons of heating oil, and still has a pit in the yard from the excavation.) still have no patio or deck out the back door.

As per my post in the ch 7 thread about the mod they want me to do, it's either negotiate or walk at this point.

[justbroke]

It's hard to gauge a bank and it is definitely harder to gauge a credit union. Credit unions tend to be more tough, and by the book. If you have a strong relationship with the CU, negotiating and settling the second might work, but it is unlikely in how CUs like to cross-collateralize everything.

[Drazil65]

If you walk then at least you have time to save the money you were sending to them for the mortgage payment. You can gather a nice sum to move with and then some. Look at this whole thing as a business decision and decide whether or not you even want/should keep paying on a house that is not even worth the amount of money you owe?

Cant count on the real estate market to be stable any time soon (no matter what the banks are saying) if there is such a thing, so tis decision is for the future of you and your family. May be a good time to strategize and put your pros and cons down on paper, get a good visual of how things really look. Good Luck!