Re: Biden -- Wants to give away houses???????
This is what's going on in S. Cal.
I own a 1 bedroom condo, at the height of its value, the same unit was sold for $350k.
I bought my for $300k
Last week, I checked realtors.com and found two units were listed for $195k. The property dropped about 40% in value in one year.
I own $300k.
When my 2 years fix rate ended, I got a call from my mortgage company telling me that they will lock my rate in for a very small fee and the process is no more than signing some documents through fax. I called back a day later, they told me I have missed the opportunity and the window was very short. They ask me to refinance through them, after running numbers over phone, I told them no because they wanted $12k in fees.
A month later, I tried to refinance through my friend, the property was praised for $330k, after signing two loan docs, neither funded.
Between my first and second mortgage under ARM, with association and property tax, my bill is $3200, for a one bedroom condo. Let me remind you that the ARM is actually on the low side, at the height, I was paying way more than $3200.00 I have been working with my first mortgage company for loan modification, it's been over 10 months, every time I call them, they told me they are backed up, and since I have paid all my payment less than 30 days late, they will "get to it when they get to it."
A month ago, I hired a friend who does loan modification to work with both of my loan companies. After contact the mortgage companies, he received the same run around I got.
Last week, they called me for my september payment, I told the the operator that they have failed to help me, therefore, I will stop all payment activities until they "notice" me. I told her that not only they give me the run around, they never tried to help me by doing some simple stuff such as removing the late charges or over the phone payment fees.
So I gave the "debt collector" the information of loan mods company and told them once you get in touch with my guy, you also need to get in touch with my second mortgage company by figuring how to lower my payment, if not, I will foreclose the property. If we do come to an agreement, the mortgage company are required to remove any late payments notice on my credit report, because if they don't, I will not be able to get a new lease for my retail shop in three years, and this cycle will start all over again. I also told her if her company didn't play the stupid game in the beginning locking my rate instead of tried to get another $12 grand from me to refi, I would not be in this situation and so are others.
The lady on the phone was silent for a very long time, and she said to me, I can't help you at moment, hope you get a call from our resolution team soon. I thank her for her time and now the waiting game.
Even though I intend to keep my condo, I have decided if I don't issue any tactical move, they will continue to ignore the people who can actually afford the payments but are barely staying above water.
The situation is rather bad because after talking to some of my neighbors, I realized they are in the same situation. The guy who bought the unit next to my for $350k, he is upside down $70k even after putting down 20%. Couple more people decided that it is just not worth keeping the property since they can literrally rent a unit cross the street for about $1200 a month, without having to deal with repair, association, property tax and $2500 per month in payment.
If Biden/Obama decide to force the company to lower the balance, it is a very attractive message and will get voters, but that is not the way to fix the problem. It will further escalate the drop in value.
The key is to find a way to get the real estate market back on track. One way is to offer people quick loan mod before they are getting into problems. The economy is slow, income level will drop also, no more over time, retail business dies, etc.
From talking to my neighbors, I know for fact that people are ditching their properties not because they can't afford, because it's not worth it.