Dublin Ranch Homeowner Negotiates a Loan Modification with Wells Fargo.
There are a lot of perks to living in Dublin Ranch, but skyrocketing property values is one we’ve not enjoyed for a while. Many homeowners have been looking forward to the Federal Rescue plan, but after Obama’s speech on February 18th in Phoenix, it may seem like a lost cause. What to do? Don’t give up – call your lender and see if they will modify your loan to fit your financial picture.
We just had a client who worked out their loan modification with Wells Fargo on a condo in the Villas. They were about four months behind on their payments, and had interest rates of 6.75% and 8.25% on their first and second loans respectively.
The modification process took about 3.5 months to complete on the two loans. The modified loans will benefit them in the following three ways: first (and most importantly), they will be able to stay in their home. Second, their interest rates were reduced so drastically that they will likely pay less interest over the long term than buyers of Dublin Ranch homes who are paying about half the purchase price! Third, because they were behind on their payments, their credit score was suffering. By modifying their loans, the past-due balance was applied to the principle of their loan balances and the loans no longer show as past-due.
How good were their modified rates? You’re not going to believe this – we were shocked! They ended up with a 4.25% interest rate on their first, which was converted from being an interest-only, adjustable loan to being a fixed-rate loan amortized over 40 years. Their second (a home-equity line) was a 5-year loan with a balloon payment at the end. On this loan, they were given a .325% interest rate (not a joke and NOT a typo!) and their term is 15 years. The payment on that loan didn’t lower much, but it’s certainly a better loan than they had before.
If you are behind on your mortgage, we encourage you to do as this client did and contact your lender. We would have loved to have their listing, but the reality is that our community is better served by having as few distressed properties on the market as possible.