Asian Journal- The Filipino-American Community Newspaper

CALLER: I have to re-schedule our appointment for a consultation because my friend says that I might be able to get a 2.5 percent rate with my lender and that he could help in this process.

Ken Go: There is no problem to ask for other’s opinion but remembers whoever you ask these questions to, you have to try and get proof of what they are saying. Know what are their backgrounds in this foreclosure business If it’s someone you just know. That knows someone who got a low, then this is hearsay. To me the only people who can help you realize and analyze your loan situation is your lender. Call them and ask them about your chances of a loan modification, loan restructuring, consequences of a Deed in Lieu of foreclosure. Ask them what is the best option for you. I have requested for callers who say they know someone who has done modification to call me and show proof of those low rates that I am hearing about.

I have seen modification for ARM loans that converted to fixed rates without a rate increase; I have seen an extension of ARM rates for another 5 years, both fully amortized and interest only. I have seen loan restructured where the defaulted balance was completed added towards the principal and the buyers payments were adjusted accordingly.

I have never seen a rate of 2.5 percent or 3.5 percent for a modification, never seen a loan balance reduced. Please call me and send this info to me so I can share it with others. I believe that rate reduction is possible but never done it and have seen an approval.

As of June of 2009 I have one pending a 2 percent fixed rate. But the lender is claiming some sort of non compliance therefore the rate is not finalized. I will keep you posted. It is through a company called : NACA.com.Caller: I would like to take over a payment of my co-worker who is in trouble and might go into Foreclosure on their property. They have put in a lot of money and work into beautifying their home. Unfortunately, their loan has a reset feature that increases their payments by another $ 700 and they really cannot afford it. I have some saving to bring up the property to current and I would like to take the loan over.

Ken Go: After reviewing the entire package, my suggestion is for you the not take over this loan. You will be taking over a 7.5 percent interest rate and you will be assuming a $359,000 loan where as the property is only worth about $300,000. You have the cash so I would offer the lender maybe $270,000 under a short sale and get a new loan with your credit standing you can easily obtain a 6 percent or under interest rate. You will have cost but you have just saved about $80,000 if they accept your $270,000 offer right? I would definitely choose to go through all these hurdles to save that money, remember money saved is money earned.