I am 100,000 in negative equity but got a loan mod. Is it worth keeping?

[IBroke]

Do those numbers not work?

That's impossible to answer without knowing your principal balance and monthly payment..

[espo1357]

I would never consider the "equity-question" the only factor when deciding "keep it or kick it".

We are $300K upside down but the mod made our monthly payment so low that we save more than $1,000/month when looking at a comparable rental. That sealed the deal for us. You need to decide for yourself if you are getting a good "bang for the buck" on your property. It seems that your property has potential.

Every case is different und you should closely look at your numbers. If it's affordable and the price seems right in comparison, there is no need to move out. Are you filing CH13 or 7? Does a 2nd mortgage exist?

WOW. You are never going to own the property!

But, you like the place and its cheaper than renting. Makes good sense.

I am in a similar spot, and will not own my home for 20 years plus. What a mess Wall Street created for middle class.

[Pandora]

Oh, yes I am sure about that. My loan started in '06. they have me at 2% for 5 years, 3% for yr.6 , 4% for yr. 7 and it caps off at 4.75% for the remaining 18 yrs. Do those numbers not work? I signed the mod to this affect.

No - they dont work, or not that I'm seeing anyway based on info you've given. So you're 100K upside down - that means that your loan was over $100K to start and you're saving right now $675 a month. Something isnt adding up.

For instance - we also got a mod and are stripping our 2nd. Our 1st modded under HAMP, purchased in 07 (80/20) - did the waterfall rate (2%, 3%, 4% and locked in at 5% remainder of loan) - extended the terms out from 27 years remaining to 40 years. That brought our payment down about 50% on the 1st mortgage alone for the first 5 years. It will go up accordingly as rates increase per our mod. However....in order to get us at 31% PITI - after applying all the bells and whistles above - we would still have a balance owed. This resulted in a balloon payment at the end of less than $20K - due at year 40, 0% interest the life of the note - and we werent 100K upside down.

ETA: As a previous poster noted, we dont know what your org. mortgage was, but going off of 100K upside down, it seems strange you dont have a balloon.

[IBroke]

I really don't like the 8% interest rate. That is why it may be better to dump it.

Our HAMP interest-rate is 7.25% for the entire 27 years - so the interest-rate may not be that important. It depends on how the loan is structured.

[Darling89]

You too, huh? I am sorry, I wrote the wrong cap amount. Mine caps off at 4>76% for 18 years. That's a lot better, huh? Me and my typos... oops!

As far as the area... it is a great location to come in the Winter, a tourist spot you know. Do I want to live here the entire time? Well, being able to come and have a place to stay is ideal.... I can always work here when I am here, and, hopefully, I can go to other places and work as well, and still have my house almost pay for itself with renters.

I take it I can discharge the home, but do a pay and stay, and if I pay it off entirely, I own it?

[Pandora]

IBroke is correct - it all goes on how it was structured.

[IBroke]

WOW. You are never going to own the property!

That's correct. Our principal-balance is about $560K but $480K are on an interest-free forbearance. Although the interest-rate is at a crappy 7.25%, we are only paying $515/month P&I and $1,180 PITI. So basically, we are renting our own place - for about 50% less what others are paying.

[Darling89]

I am confused..... If i do not reaffirm my mortgage, does that mean I don't own my house? so I am simply paying rent and the bank owns it? I am not behind on the note, I am current. If I keep the house up and maintain it, I do not own it after paying for 26 years if I do a pay and stay?

[Darling89]

I am sorry if I have confused anyone. I am not upside down with the bank, only with the value of the property. I am current with the bank. The trial period lowered my payment which added 7800 to my principal.

[IBroke]

I am confused..... If i do not reaffirm my mortgage, does that mean I don't own my house? so I am simply paying rent and the bank owns it? I am not behind on the note, I am current. If I keep the house up and maintain it, I do not own it after paying for 26 years if I do a pay and stay?

Oh, you still own your home. You don't give up ANY of your RIGHTS by not reaffirming. Even in case you should fall behind at some point, they can't foreclose on you any faster just because you haven't reaffirmed. Once you paid all agreed on amounts, the house is yours free and clear. Absolutely no difference between reaffirming and not reaffirming in that regards. In general, reaffirming benefits the bank, not the consumer. It's their tool to come after you if you don't pay.

[Darling89]

Given I don't reaffirm, and I do a pay and stay..... if something happens after 5 years, and I fall behind, since I can't file bankruptcy, can they sue me for the remaining balance?

[IBroke]

Given I don't reaffirm, and I do a pay and stay..... if something happens after 5 years, and I fall behind, since I can't file bankruptcy, can they sue me for the remaining balance?

NO - and THAT'S the great thing about NOT reaffirming - especially in a recourse-State like our lovely Florida!

[espo1357]

NO - and THAT'S the great thing about NOT reaffirming - especially in a recourse-State like our lovely Florida!

Is it too late to NOT reaffirm the home?

I am in a 13, and have decided to affirm during the 341. Probably not a good idea, but at the time, I wanted to stay in the home. I will not have equity, even in five years. But, I wiil just stick it out and rent it out if I have to. Eventually, in 30 years, I will own it, not the bank.

30 years is not that long of a time, is it? LOL.

[bladerunner]

...just a quick note on negative equity....WSJ online has oodles of articles concerning defaulting on an underwater mortgage.(we're in the same boat) read...October 8,2010, " The Great Mortgage Mystery" or why are distressed homeowners still paying on an underwater mortgage...I would copy and paste info but being a newbie here, I do not know all of the rules...basically if your house appreciates modestly, maybe 3% a year, you may be looking at upwards of 30 years before you've finally built up any positive equity....

just a thought..
good luck...

[msm859]

...just a quick note on negative equity....WSJ online has oodles of articles concerning defaulting on an underwater mortgage.(we're in the same boat) read...October 8,2010, " The Great Mortgage Mystery" or why are distressed homeowners still paying on an underwater mortgage...I would copy and paste info but being a newbie here, I do not know all of the rules...basically if your house appreciates modestly, maybe 3% a year, you may be looking at upwards of 30 years before you've finally built up any positive equity....

just a thought...

Good point. Which begs the question that has not been asked yet. When one says they are $100k under water that isn't very helpful unless you also know what the current value of the house is. If your house is currently worth $900k and you owe $1 million at 3% appreciation you will be even in @ 3years. If your house is currently worth $100k and you owe $200k at 3% appreciation you will be even in @ 24 years! (not counting principal payments).
good luck...