How to Find Your Best Mortgage Offer

by Jo from Fort Myers, by Cathy in Denver, and by Paul in Detroit Lakes

Ask Kate how to find your best mortgage offer: Jo, a struggling widow with health problems, needs an affordable alternative to the bank's refusal to refinance her mortgage. How soon can Cathy (who has a 730 credit score) buy a house after a 2012 foreclosure? Paul owns an underwater investment property. His lender says, unless he stops making his house payments, he can't modify the terms of his mortgage. Is this right?


Alternative to Bank's Refusal to Help Struggling Widow Refi Her Mortgage

By Jo from Fort Myers, FL
Bank Doesn't Help Struggling Widow Refi Her 5.625 Percent Mortgage


I've made at least 5 attempts with Fifth Third Bank and am always turned down by the investor who owns my loan.

As a Realtor in SW Florida since 1987 (need I saw more about my income struggles), several health issues requiring surgery and the recent death in 2012 of my estranged husband, I'm continuing to struggle with my mortgage.

My credit score is finally 620 after filing Chapter 13 in Dec 24, 2013. I still have 4 more years of payoff on that. My total income last year, including my social security was about 60K.

On one hand things are improving but last week I got the first of my flood insurance bills that went from $1400 to $2400. Over the next 4 years, it will be $4400 a year for flood insurance alone and now my house payment is sure to go up again because of my escrow.

It kills me when I see others buying 200-300K homes and their payments are the same as mine on 98K. Is there anything that can help me?

***zz-portrait-left.shtml*** Ask Kate answers: Alternative to Bank's Refusal to Help Struggling Widow Refi Her Mortgage

Hi Jo,

You've had a rough go the last few years, haven't you? Sadly, this is NOT music to a lender's ears because underwriters subscribe to the old adage... "History is the best predictor of future behavior."

Regardless of the adage (that I've often seen proven wrong), you desperately need a more affordable living arrangement.

If your loan servicer will not entertain the idea of refinancing your mortgage, look into modifying your home loan. In lieu of that, you may want to begin considering alternatives to owning this home because it sounds like the flood insurance premiums are going no-where but up.

Affordable Mortgage Payments Should Be Your Number One Priority

Let's think about it like this. If you spoke to prospective clients in a similar financial bind, do you think you might advise them to sell their home and buy another that is more affordable? Of course only you know the complete picture of your finances but don't wait until your cash reserves are tapped out to make a decision.
Here's a rule of thumb for all borrowers. Don't ask your lender how much you can afford! Go here for more help on getting an affordable mortgage:

Affordable Alternatives for an Underwater Home

You did not mention if your mortgage is underwater. If so, you might benefit from the short sale process. You can read more about it here at Negotiating a Deed in Lieu or Short Sale with Your Lender.

Or perhaps you can tough it out the next four years and refinance more easily after your bankruptcy is discharged. Either way, I wish you an affordable future and peace of mind.

Best wishes,


How Soon Can I Buy a House After 2012 Foreclosure

By Cathy in Denver, CO
How Soon Can I Buy a House After 2012 Foreclosure


Hello, we had a foreclosure in April 2012 on a conventional loan.

Our credit is back in the 730's.

When do you think we would be able to apply for a new mortgage to buy another home?

We will look to buy in Phoenix, however we are currently living in Denver.

***zz-portrait-left.shtml*** Ask Kate answers: How Soon Can I Buy a House After 2012 Foreclosure

Hi Cathy,

It's nice to hear that your credit scores have stabilized after the foreclosure.

Here is a program that may be of interest to you. FHA is coming to the rescue of beleaguered home buyers who were forced out of their homes due to what HUD has termed an Economic Event.

Read more about the program as well as waiting requirements for getting a mortgage after foreclosure at... Back to Work by FHA: New Home Loan Financing After Foreclosure.

You'll also get additional help at How to Buy a House After Foreclosure.

Best wishes,


Mortgage Options for Underwater Investment Property

By Paul in Detroit Lakes, MN
Mortgage Options for Underwater Investment Property in North Las Vegas, NV


I have an investment rental property in North Las Vegas, Nevada with a current value that is less than the mortgage balance.

The mortgage (6 percent for 30 years) is serviced by BOA and is owned by Bank of New York so it is not eligible for HARP and probably not HAMP.

I would like to simply modify the mortgage to a 15 year 3.25% because then I could pay down the principle in less than 4 years, sell it and pay all off. But because the property won't appraise out, no one will refinance the mortgage.

When I inquire about mortgage modification, I am referred to the debt collection department at BOA and they tell me that I can't get modification unless I default which I don't wish to do as I don't want to harm my good credit.

Are there any other options I would have to refinance this where I can bypass the appraisal? Any ideas or suggestions?

***zz-portrait-left.shtml*** Ask Kate answers: Mortgage Options for Underwater Investment Property

Hi Paul,

I wish I knew of a mortgage program offering affordable interest rates that would issue loan approval without an appraisal, especially in an area like Las Vegas that suffered from widespread negative equity during the recession.

Many lenders who do not participate in HAMP offer in-house modification programs. But it would not be unusual for them to model their own programs after HAMP which requires landlords of rental properties to fall behind on mortgage payments.

I do NOT recommend this form of strategic default without first obtaining the requirement of defaulting on mortgage payments from your lender in writing. Best wishes,


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