Posted on: 02nd May, 2010 02:48 pm
In August 2009, we contacted our lender to start renewal procedures on a 2 year interest only lot loan due to mature in October 09. Its now April. The land was originally appraised at $1.2 million in 1996. Was re-appraised for $850,000 in August 09 and a drive-by appraisal in Mar2010 assigned value of $750,000. Our loan is for less than $600K. We were denied a 2% fully amortizing loan in December 09 due to high back end ratios. (The income AND total debt were miscalculated!) Our credit is spotless. We have sufficient funds to cover the interest payments for 6-8 months on hand. The lender is now saying they will offer us a 15 year fully amortizing loan at 9.5% - 13% IF we pay an additional $75,000 toward principal. I know this is not our home and we are not at risk of living on the street, however, it does seem punative. We never missed or were even late on a payment. We were more than willing to negotiate a reasonable payment schedule. Why would the bank want this piece of land and get nothing in return? Doesn't it make more sense to accept a reduced payment of something rather than take over a piece of property and the associated property taxes, association fees and maintenance?
Hi Norton,
If the bank forecloses the property, then he would be able to sell it off and recover his dues. Once he sells off the property, the buyer would be responsible for the property taxes and association fees.
If the bank forecloses the property, then he would be able to sell it off and recover his dues. Once he sells off the property, the buyer would be responsible for the property taxes and association fees.
True, however in this economy, not many cash in hand buyers out there for this type of property. We have had 2 people interested in buying only to find it impossible to secure financing on land. I guess I really don't expect a solution to this situation, but really needed to vent.
True, however in this economy, not many cash in hand buyers out there for this type of property. We have had 2 people interested in buying only to find it impossible to secure financing on land. I guess I really don't expect a solution to this situation, but really needed to vent.
True, however in this economy, not many cash in hand buyers out there for this type of property. We have had 2 people interested in buying, only to find it impossible to secure financing on land. I guess I really don't expect a solution to this situation, but really needed to vent.
True, however in this economy, not too many cash in hand buyers out there. We did have 2 people interested in buying only to find it almost impossible to secure financing. Guess I didn't really expect a solution to this situation. Just needed to vent.
Thanks
Thanks