Quick Answer: Interest-only mortgage borrowers facing underwater properties and approaching rate adjustments have limited options beyond loan modification or strategic default. With payments at 35% debt-to-income and a 6.875% rate going adjustable, this borrower’s situation demonstrates how declining home values can trap homeowners in unworkable loans when lenders won’t negotiate modifications for current borrowers.
I am stuck in an interest only loan and unable to refinance due to a significant decrease in my home value. The loan was sold to a private investor and is unwilling to negotioate a loan mod since I am current on the payments.
Other than for that fact I would qualify for a loan mod. The current payment, P&I and taxes and insurance would be about 35% of my gross.
The current rate is 6.875 and becomes adjustable next year> Just wondering if I have any options other than defaulting on some payments. As an added bonus I have foolishly racked up significant credit card debt and need help there too.
Every weekday I read the enforcement actions, filings and fine print the outlets skip, and turn them into the one or two moves that actually improve your position — a rate worth moving for, a fee you can refuse, a deadline to beat before it costs you.
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