If I am overpaying on a high interest loan for an upside down house, will the bank be willing to change my rate if I threaten to walk away?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

If I am overpaying on a high interest loan for an upside down house, will the bank be willing to change my rate if I threaten to walk away?

I have perfect credit and got stuck in a very high rate loan after a divorce. I had all of the qualifications for a loan modification but was refused. I am looking at either walking away completely or a short sale if the bank (PNC) will not work with me. Since I have great credit and have never been late on any type of payment, will they take me seriously when I threaten this? Do I put myself in a bad position by “showing them my hand” with this threat? I don’t want to be irresponsible but this isn’t making business sense.

Asked on October 18, 2011 under Real Estate Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Before you decide to walk away on the house that you owe more on than what it worth, you need to first confirm whether the loan that you have for it is the original loan for its purchase and not a refinance. If the loan is the original loan, then if you lose the property in a foreclosure, then you would not be obligated for any deficiency since California has anti-deficiency laws.

If you do a short sale and the lender agrees to it, under California law you would not be obligated for any deficiency as well.

I suggest that you retain a real estate attorney to asisst you concerning your negotiations for a short sale for the home or a loan modification.

Good luck.

 


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption