Unraveling Money – My Exploration of Personal Finance and Productivity

August 3, 2009

Update on Union Bank Loan Modifications

Filed under: Mortgage — unravelingmoney @ 9:50 pm

I called today as I had promised, and surprise, all of the sudden they have loan modifications! They’re still not running the “Making Home Affordable” plan, but they have their own.

Essentially, they’ll just modify the loan to the current market rate. In my case, it was down a half a percent to 5.875, which is not ideal but would definitely be a reduction. As with everything, there is always a catch. In this case, the fee is $960. It’s not that bad, but it really just depends on the payoff time – how many months would it take to see a net benefit from the modification?

I would really prefer to refinance my entire loan (2 loans, really) for a lower rate and on a P+I basis. Then, in the ideal situation, I’d be able to have a lower payment and make more progress on paying down the principal on my loan. I’m exploring that option as well right now – more information to come in the next week if I’m lucky.

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2 Comments »

  1. I think there is a bigger catch:
    see http://www.nakedcapitalism.com/2009/07/is-new-affordable-fhfa-loan-program.html
    on non-recourse changing into recourse loan through modification.

    While nobody likes to think about worst case scenarios, I would give it serious thought!!

    Comment by Michael — August 11, 2009 @ 2:50 pm

  2. One addition:
    http://globaleconomicanalysis.blogspot.com/2009/08/bright-side-of-falling-home-prices.html
    Also some comments on the post are worth reading.

    Just for you to take a look on things from a different angle.

    Note: For sure you absolutely must consult a lawyer before taking any such action, as your situation with second mortgage and student loan is complex.

    Comment by Michael — August 18, 2009 @ 8:26 pm


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