Chase Home Finance - Chase Won't Refinance my Booby-Trapped Mortgage

Posted on Saturday, April 16th, 2011 at 3:28pm CDT by 73c6707a

Product: 7/1 Adjustable-Rate Mortgage

Company: Chase Home Finance

Location: PO Box 24696
Columbus, Oh, 43224-4696, US


Category: Other

In 2005, at the height of the sub-prime mortgage fiasco, Chase Home Finance loaned me $464,000 to purchase a new home in Redondo Beach, California. This was a stated-income loan and required little or no documentation to qualify. I made a 20-percent down payment on the purchase price of $580,000 and received a 7/1 adjustable-rate, interest-only mortgage at 5.375%. The monthly payment was $2,046. For much of the the time, I've prepaid toward the principal, however, and sent them monthly checks for $2,600. The balance of the loan now stands at $454,000. Here it is, six years later, and we're now looking at an almost inevitable rising interest-rate environment. However, Chase Home Finance won't allow me to refinance this booby-trapped loan. The appraised property value has fallen by about $80,000, leaving me with less than 20-percent equity in the home. Additionally, like all banks, Chase has vastly increased the level of income documentation required to qualify for a refinance. So, here I sit, with one year remaining before the interest rate re-sets on this 7/1 ARM, with little or no chance of refinancing without having to apply for an FHA loan at a higher rate, and with the extra cost of private mortgage insurance. Despite hearing stories of many other homeowners walking away from their loans, here I am attempting to fulfill my obligation and merely lock in a 30-year fixed-rate loan so I can stay in the home secure in the knowledge that I'll be able to afford the payments once the interest-rate hikes begin in 2012-2013. Any suggestions on how to proceed?


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