Friday, December 12, 2008

Housing Good News

Here's a piece of good news about the foreclosure mess and the overall bad housing market. Good news in this arena is as rare as snowmen in the summer, so I wanted to pass it along right away.

An acquaintance called me some days ago to tell me he successfully got his mortgage company to renegotiate his mortgage loan terms.  Woot! Woot!

The Original Mortgage

  • Taken out in 2003

  • 5 year ARM, Interest Only payments at 5.875%

  • Payments of 882.32 per month (interest only, not touching principle)

The New Mortgage

  • 3.875% fixed rate for 40 years

  • about $400 payment needed to start the new plan

This is phenomenal news! On your average $200,000 mortgage, this renegotiation brings the payment down from about $1183/month to $820/month.

Congratulations Tom!

The homeowner in this case had suffered both a medical disability and a job loss. Both these events are typically "qualifying events" for almost every mortgage company. Experiencing a qualifying event means you're eligible for the mortgage company's renegotiation plans.

Haven't had a job loss or medical disability? It's still worth contacting your lender if you're struggling to make the current payment, or if you know you soon will struggle when the adustable rate (ARM) adjusts in the future.


Further good news on the credit card front --

Another friend of mine fell 2 months behind on credit card payments. He had a 5 to 15 year good payment history on the various cards. He's 100% commission in a profession related to the housing industry, so times are tight.

Bank of America contacted him and offered their "Hardship Program" --

Old Payments

  • Card 1 -- $382.00 per month at 28.99%, payoff time about 40 years

  • Card 2 -- $213.00 per month at 15.22%, same

New Payments under B of A's "Hardship Program"

  • Card 1 -- $200 per month at 4.75%, payoff time 60 months

  • Card 2 -- $168 per month at 4.50%, same

If you're falling behind on or struggling to pay any of your consumer debt, call the servicing company today! They're as scared of the word "recession" as we all are, and they're agreeing to reduced payment plans to avoid writing off the bad debt entirely.