[quote=bearishgurl][quote=treehugger]…I told him there were programs that might be able to help. He ended up qualifying. His monthly payment has been reduced from close to $5000 down to $2100. I have just refinanced for the 2nd time . . . If I talk about how excited I am about lowering my monthly payment he chimes in with “oh I just lowered my monthly payment too, my 2nd just got reduced”. . .[/quote]
treehugger, even though your co-worker claims to have gotten his “2nd” reduced, what he very likely means is that he got his payments reduced on his “2nd.” A mod is only a change in terms of his loan. He very likely could now have a 40 year mtg on his 1st TD and got the interest rate only lowered on his “2nd.” If you are able to engage him in conversation to delve further into the matter, you will likely find out he is still very much underwater and will only be making a minuscule dent on his principal in both mtgs.
It is also possible that both his mods are I/O only for a period of time, thus he wouldn’t currently be paying down their principals at all.
So what if he “gets” to live in a LC condo for around $2100 mo. This likely does not include taxes and HOA dues and his taxes likely have some MR in them, as well. With a 40 yr mtg, he will not be able to build equity fast enough so cannot sell for a good many years (and possibly never) without his lender selling VERY short and his credit taking a BIG HIT!
How is your co-worker “making out” better than you? IMHO, it seems like he is nothing but a lifelong tenant who can’t even move without finding a reliable tenant OR letting his credit go to sh!t! And it is VERY possible that the terms of his mods prevent him from turning the unit into a rental.
And even if RE prices skyrocket in the next ten years, he may also have quite a bit of “deferred interest” built up on his lender’s books by the time of sale (due to the mod), which will undoubtedly be called in on their demand in escrow :=0
More often than not, all is not as rosy at it appears on the surface.
If you are still working together in 2-3 years, talk to him again then and see if he is still “bragging” about his “loan mod,” lol . . .[/quote]
Sure hope you’re right, BG. Unfortunately, from some of the stories I’ve heard, treehugger might be right, too.
Sorry you have to hear stories like that, treehugger, but am glad to hear that you were able to get your already-affordable payments reduced further!
