Adjustable rate mort.

I have someone in Virginia, that is behind on payments, but has a adjustable rate mortgage. Do you think they would qualify for a loan mod. to get a fixed rate? I am trying to avoid the short sale due to long distance from the client.

So far I have not been able to get any adjustable rate mortgages modified from their current state. Each time I try I am told that the homeowners have to refinance and get an entire new loan. For whatever reason they seem to allow the property to go into foreclosure rather than modify the loan. It’s frustrating because it would be in their best interest to bend a little rather than being so darn stubborn.

I have heard that some banks are trying to amend these rules that make them stick to the terms of the loan, but so far I have not heard any specific names of anyone who has.

Contact the servicer and find out. As each day passes and the subprime debacle progresses, the rules are constantly changing. Servicers are at the epicenter with the media, bureaucrats and consumer advocates all screaming for solutions. Mods will be more and more routine.

Personally it irritates the crap out of me that consumers who should never have qualified for a loan in the first place are being bailed out … Nobody is going to agree to drop my fixed rate loan down a notch or two.

Countrywide is going to start working out loan modifications in California for homeowners who prove they can not afford the payments after the ARM adjusts. I think part of the reason they don’t just offer this up from the start of trouble is that the borrower and lender signed a contract. Investors in the secondary mortgage market bought securities based on those contracts. So it’s not as simple as just having the bank keep the rate the same. Out here, the Governator (Arnold) stepped in and introduced a bill that the lenders who wanted to participate joined in. This way it’s like the Government allowing the lenders and borrowers to change their contracts. If the government wasn’t involved then technically neither borrower or lender could “change” the contract because investors bought securities based on those terms. So again, just my opinion but that’s why banks don’t just give out loan modifications like candy.

Amen brother.