Someone was telling me they were working with their lender to modify their loan. She is a upper management professional and her husband works at a bank.
Really? What is the purpose of your claim? Why should they modify your loan?
Because we owe more than it is worth. We bought the condo two years ago, owe $389,000 and the appraisal just came in at $289,000. They are trying to work with us and said they might be able to lower the payment $200.
That is a suspicious number. Let me play with some math tonight and I’ll reverse-engineer if they are truly giving you a break or just ripping you off.
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What is it in our nature that forces us to repeatedly trust the thing that hurt us in the first place? Ask anyone and they would deny they would ever allow it to happen. “I’d walk away from the table if that banker lied to me.” If it costs a penny more than the lender said it would I’d just not sign.” Yet, I have seen hundreds of amazing rip-offs and explained more Lending Tree.com and option arm mortgages than I care to admit.
So why would the bank want to help my good credit, good savings customer? “Because they want to keep me happy in my mortgage or I will walk” eyes rolling. “Because I’ll send them the keys.” yet, you are still making your payment and have a job. I don’t think they have even broke a sweat! Listen, the longer they can drag you along, filling your cranium with ether and gas, the more payments you make and they get to report another quarter of performing assets. Why would they do that? ….the executive staff get bonuses…. you get nothing.
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Back to the scenario. This isn’t even the algebra I was doing in sixth grade:
$389,000 @ 5% = $2088/month Total payments after 30 years = $751,763
The $200/month savings is coming from converting you to a 40 year loan, same rate!
$389,000 @ 5% for 40 years = $1875 saving $213/month: Total payments after 40 years = $900,362!
I’d lower your payment $200/month if you promised to pay me $510,000 + what your borrowed!
Are you kidding me? Listen up people, compounding interest is a loaded handgun. Quit screwing around rationalizing, “This time it is going to be different.” and ask a few professionals that are honest, ethical, competent and preferably like you enough to do some simple math on your behalf.
If you were my customer, you would be able to call me and ask me any question for free. “Your mortgage planner for life” If you aren’t my customer, go visit a lawyer and have them call me as an expert witness at $300/hour. If I blab all day on your dime but managed to convince you the teller at the bank really isn’t capable of working in your best interest, you are still going to be $150,000 ahead.
Or just repeat what you did last time and convince yourself you can outsmart the bank this time. Too bad you don’t realize they are also making $12,000 in fees.
There are options. I saved you from one bear trap, only one free tip per non-customer.
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