Mortgage Question - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

Titan · 02-12-2009, 11:04 PM

All numbers for example only.

I owe $100,000 on my mortgage.

I owe another $75,000 on a HELOC.

Great when my house was worth $300,000.

Now that it has lost value it is only worth $150,000.

Let's say my mortgage is up now. What does the bank do? Do they mortgage the full amount? Do they "call" the balance over the value of the house? Do they foreclose?

Help from money guys please.

pepper24 · 02-12-2009, 11:06 PM

Your house has gone down half in value? Where do you live?

Titan · 02-12-2009, 11:20 PM

Dude. Just for example. Mortgage plus Heloc worth more than appraised value. Insert your own numbers if you like.

ResAlien · 02-12-2009, 11:26 PM

You owe what you owe brother. An astounding amount of people in the states are in the same position as you. Are you saying you cannot pay anymore? There should be many homeowner assistance companies, especially non-profit ones, there to help you. If your credit isn't jacked, try to get some kind of refi action going. A possible forbearance plan or other loss mit strategy could help, contact your servicer. A short sale or a deed in lieu may help you out if you're willing to lose the home and don't want to have a FC on your record. It really all depends on your income and DTI. I'd go more in depth, this is the field I work in, but I'm not sure about the differences between Canadian and US mortgages. PM if you want, if not I'll wait to see some more info about your situation.

Edit: I cannot stress enough CONTACT YOUR SERVICER. I work in Master Servicing, and know that every servicer in the states has specific departments set up to help people in what seems to be your situation. It's tough to say what your options could be, like I said income, DTI and credit score play a huuuge part in what options are available to you.

If you're in the states and haven't gone to your servicer yet, this isn't a bad place to start:

http://www.hopenow.com/

pepper24 · 02-12-2009, 11:34 PM

Quote:

Originally Posted by Titan

Dude. Just for example. Mortgage plus Heloc worth more than appraised value. Insert your own numbers if you like.

Thanks for clarifying. I was assuming by "Down the Deerfoot" you're near Calgary but in places like Vegas and Phoenix a 50% drop is reality.

ResAlien pretty much summed up the options. Get some professional advice. Banks will only go to foreclosure or short sell if they have to as it's a last case scenario.

Titan · 02-12-2009, 11:46 PM

Thanks. I guess the numbers I put could be real in the US.

I am in Calgary, have a good job and credit. Not behind on anything. The mortgage actually has about a year left. Should I be contacting the bank now or wait and see what happens with the Calgary housing market? The numbers were a bit exaggerated. The value of the house is probably about the same as the heloc and mortgage. But it is hard to say, obviously.

Titan · 02-12-2009, 11:50 PM

Quote:

Originally Posted by ResAlien

You owe what you owe brother.

I know and am fine with that. But I guess the question is how the bank will deal with the situation. We can afford the mortgage payments but will they renew for a value higher than the value of the house? If not, what are the options, I guess is what I was asking? Will they say, you are $75,000 over the value of the house so you have to write a cheque for that today? Then it would be jinlgle mail time. Not really but you know what I am saying?

ResAlien · 02-12-2009, 11:50 PM

If you don't mind, a year left til...what? You don't strike me as the 70 year old CP poster, so it can't be a 30 year coming to term. Balloon? ARM resetting? IF it's a balloon, you've got to get on a refi ASAP. If you're not behind and not planning on being behind, I'd say just keep on paying. I can't think of any way they're going to drop your principal because the property value dropped, as far as that goes s&*t happens. If you'll own it outright after a year anyway here, you'll just have to hold onto the property until values rise again. my 2 cents, hope that helped some.

Edit: I'm a bit confused at what you mean by "renew". This is one of the very few topics on here I'm extremely knowledgeable in, I'm no CP lawyer but can give basic info for you.

There are constant changes to the options available to homeowners, they literally change every day. But the odds of your principal being reduced? Slim and none, and slim just left town. Home loans have become like car loans. If you're upside down, you've just gotta keep paying til maturity.

Titan · 02-13-2009, 12:02 AM

25 year mortgage but the term was 4 years. At the end of the 4 years you renew for the balance at the time. I think this is a significant difference between the US and Canada. Your "term" is in this case, four years but is amortized over 25 years. So, if it was a 25 year "term" I would be cool but I have to renew in a year for the balance, plus the heloc.

I don't think they will drop the principal but will they extend if the mtge and heloc are worth more than the house is valued at?

I wonder if the two markets are just so different?

ShotDownInFlames12 · 02-13-2009, 12:02 AM

Quote:

Originally Posted by Titan

I know and am fine with that. But I guess the question is how the bank will deal with the situation. We can afford the mortgage payments but will they renew for a value higher than the value of the house? If not, what are the options, I guess is what I was asking? Will they say, you are $75,000 over the value of the house so you have to write a cheque for that today? Then it would be jinlgle mail time. Not really but you know what I am saying?

I'm assuming you mean you have 1 year till your renewal date.

Even if your house is worth less than what you owe, unless you are looking for more moneyto be added to your mortgage, the bank won't make you pay anything. There are a lot of people who put 5% down or even did the Free downpayment thing that have taken a loss. If it's just a straight renewal, you won't have to pay any of the shortfall or any of that, just set your new rate and term.

Titan · 02-13-2009, 12:03 AM

Quote:

Originally Posted by ShotDownInFlames12

I'm assuming you mean you have 1 year till your renewal date.

Even if your house is worth less than what you owe, unless you are looking for more moneyto be added to your mortgage, the bank won't make you pay anything. There are a lot of people who put 5% down or even did the Free downpayment thing that have taken a loss. If it's just a straight renewal, you won't have to pay any of the shortfall or any of that, just set your new rate and term.

So do they not even look at the value of the house at the time? Also, can you roll the Helco into the mtge as a whole? Does that make sense?

ShotDownInFlames12 · 02-13-2009, 12:07 AM

Quote:

Originally Posted by Titan

So do they not even look at the value of the house at the time? Also, can you roll the Helco into the mtge as a whole? Does that make sense?

They aren't going to do an appraisal if it is just a renewal. The only time they do is if you are looking for additional funds.

Depending on the bank, you may be able to roll your line of credit into your mortgage. If you do that - again depending on who you are with- they may or may not want to requalify you which would mean appraisal would have to be done.

albertGQ · 02-13-2009, 12:07 AM

Quote:

Originally Posted by Titan

So do they not even look at the value of the house at the time? Also, can you roll the Helco into the mtge as a whole? Does that make sense?

They won't look at the value. You just have to choose a new term at current rates.

You won't be able to roll the HELOC into it. Because then you'll have to do a new application. Then they'll look at the property value and since you'll be looking for a new mortgage that is higher then the value, you won't get approved

Rathji · 02-13-2009, 12:12 AM

Quote:

Originally Posted by Titan

So do they not even look at the value of the house at the time? Also, can you roll the Helco into the mtge as a whole? Does that make sense?

Like all things in life, if someone is willing to pay a certain amount for something then it is worth at least that amount. You willing to keep paying them money is certainly a lot better that someone else buying the house who might end up paying someone else for the mortgage.

Titan · 02-13-2009, 12:23 AM

Quote:

Originally Posted by ShotDownInFlames12

They aren't going to do an appraisal if it is just a renewal. The only time they do is if you are looking for additional funds.

Depending on the bank, you may be able to roll your line of credit into your mortgage. If you do that - again depending on who you are with- they may or may not want to requalify you which would mean appraisal would have to be done.

So how do you find this out before? I don't want to do into the bank and say I want to roll them together and then they hit me with a new appraisal.

Thanks for all the good advice guys.

ShotDownInFlames12 · 02-13-2009, 12:27 AM

You can just call into them and ask them what the process is for rolling your HELOC into your mortgage. If they say that you have to requalify or anything like that, then you know. You can always ask them without committing to anything, just say you want to think about it.

What bank are you with?

Titan · 02-13-2009, 12:36 AM

Quote:

Originally Posted by ShotDownInFlames12

You can just call into them and ask them what the process is for rolling your HELOC into your mortgage. If they say that you have to requalify or anything like that, then you know. You can always ask them without committing to anything, just say you want to think about it.

What bank are you with?

Scotia