Five years ago my employer moved my family to our current home. It was the peak of the real estate market. In order to get into the house before school started, we took 100% financing which consisted of a first mortgage that is interest only and a second mortgage on which we pay down a part of the principal each month, on a home that we paid top dollar for because it was in the best school district in the state.
A year later they laid me off and the bottom had dropped out of the market.
We do not wish to move. We are not looking to or willing to sell in this market. We would just like to live in our home and pay our mortgage every month and live happily ever after…oh…and wait for the market to turn around…which it will…I lived through this in the 90’s. It may take 20 years but it will happen…I’m a patient woman…I can wait.
In the meantime, we have a balloon payment due this year in either July or August (I can’t remember) which means the loan will have to be refinanced. I would like to refinance the balance of the two loans into one, 15 year mortgage, with equal monthly payments and a lower interest rate.
However, because of the current real estate market, when you look up upside-down in the dictionary there is a picture of my house. I called today to see about a refinance and was informed that our house’s value is approximately $50K lower than what we currently owe on it. They are only willing to refinance 95% of the current value which means I would have to pull approximately $60K out of my ass in order to get this done. The kid on the phone was very serious about all of this.
I’m still laughing.
“Are you currently in foreclosure ma’am? Because if you are then I can transfer you to Specialty Lending and they may be able to help you.”
“Do not call me ma’am and no, we are not in foreclosure. We are fortunate. Unlike a lot of Americans we are working and able to pay our debts on time. We would just like to refinance the balance and pay it off in 15 years no matter what the market says.”
“How about past due? If you are 90 days or more past due you can be placed in non-accrual status and we can then turn your account over to collection. They will then contact you and try to help you. There are programs that may be able to get you refinanced.”
“No,we are not nor have we ever been nor do we ever intend to be past due. Again, we are very blessed to be where we are right now…working…paying…living. We just want to refinance our home and live in it.”
“Well then I don’t think we can help you uh…ma’am.”
Am I crazy? I think I must be crazy because I keep calling these people back expecting a different result. I just cannot believe that they would rather I DEFAULT on my loan than to pay it back…in full…all of it.
I’m a banker. I get loan to value ratios and regulations but let’s get real here people – this is the same industry that lent trillions of dollars to individuals who had no business buying homes that were way too expensive for them, by lying and tricking them into signing documents that placed them in loans that would bankrupt them at some later date. These poor people DID have to default on their loans because they had absolutely no choice. Some (many) lost their homes to foreclosure. Many had to sell in a short sale situation. All of which meant the mortgage industry lost A HELL OF A LOT OF MONEY.
I don’t want them to lose anymore. I would just like them to refinance what I have so that I can live happily ever after.
Somebody get me some chocolate.