Any suggestions as to how to refinance when your upside down on a mortgage?

My husband and I bought a home from my husband's former employer for $160,000. The home appraised at $140,000. The employer co-signed and put up a $20,000 CD as collateral. We didn't have good credit and had to pay some things off, so the employer did that for us, so we owed him money. We paid him back with the loan, but now we have to refinance the home come January and we have not been able to afford to do any improvements on the home, and It will not appraise at what we owe on it. No one is willing to refinance 100% because of the negative equity, and I don't have the $15,000 plus closing costs to pay the differece. Not sure what will happen if we don't get refinanced. Can't sell either I would assume. Any suggestions?Any suggestions as to how to refinance when your upside down on a mortgage?
My name is Jason Fry, I work with Providential Bancorp, a nationwide lender in Downtown Chicago. I have many programs for people in your situation. I actually just closed a loan for 125%, similar situation, customer had bad credit at time of purchase, had a friend who sold him the property in the same manner, but the house then DEPRECIATED... Luckily the 125% was able to cover what we were missing.



I would be happy to assist you with the refinance, i would just need some more information to let you know if you qualify. Call me at 312-264-6448 on Wednesday the 5th, or shoot me an email today at jasonf@providential.com..



Your not stuck, you have many options, you just need the right lender that will work with you. I work with a portfolio of over a hundred lenders, and there's sure to be a program to help you..



Enjoy the holiday, and try not to let this ruin your weekend...you will be okay!



Hope to hear form you soon!



Jason FryAny suggestions as to how to refinance when your upside down on a mortgage?
Unfortunately, you are somewhat stuck. The problem you face is actually going to become a little more common if proprty values soften in major metropolitan areas.



First, your current bank is supposed to have valued the property at the LOWER of the purchase price or appraised value. If your appraisal came in at $140,000 they NEVER should have lent you the full $160,000.



I work for a major US Mortgage Bank and never heard of putting up a CD for collateral on a home purchase. Your bank may consider this whole transaction as fraud. It soulds like you were used as a ';Straw Buyer';. This means you knew the seller, and they sold you a home significantly above value, and left you to deal with the problems. Most straw buyers never make a payment and the home goes into Foreclosure. You seem to want to work something out, but there is a strong possibility that you will not be able to refinance, and may have to go into FC if you cannot afford the property.



If the former employer is a co-signer, they are as responsible for the timely payments of the mortgage as you are. It seems that they would also lose the $20,000 CD if you defaulted on the loan. It is in their best interest to see you refinance out and remove their name from the mortgage.



You may look to them to provide cash to lower your loan needs from the amount you currently owe on the home to the current appraised value. From your description, it sounds like you'll be $15,000 short. You can enter an agreement to pay them back over time.



Also, you can try to have your home reappraised if you think values went up, or wait until January if you think values in your area may continue to go up between now and then.



Good luck!
There are several companies that will do mortgages at 105% or 115% or even as high as 125% of the value of the home. Let me kno if you want more info. Shoot me an e-mail if you have more questions
this sounds BAD! you should have never bought a home for more than the appraised value. your boss shouldn't have offered the additional cash to make up for the sales price, he SHOULD have lowered the sales price to the appraised value of $140,000.



why on earth would you purchase a home, knowing it didn't appraise for what you were paying for it? why even get an appraisal at all if you were going to do that?!?!



are you sure it won't appraise at what you owe on it? how long have you owned it?



are your payments current, or have you been over 30 days late on any payments since you bought it?



it sounds like your boss put you in a home he knew you couldn't afford, but didn't care so long as he was getting out of it. also, you've been further screwed because if you can't sell it for what you've got in it, and cant' make payments on time, then you will likely go into foreclosure. you are in a bad spot, as you already know. your employer really did a number on you guys!!!



you need to go talk to a mortgage consultant or loan officer at a lending institution/mortgage company ASAP. they can advise you of what to do. if i were you, i'd go to a mortgage company over a bank, since the mortgage companies generally have more loan programs, etc. at least they can let you know what's going on!



good luck, and sorry you got screwed by your employer!!! next time, try using a realtor!!! they would have had your best interest in mind and would have suggested many of the above things i mentioned to you!
Ask your boss to cancel his 20k note, and refund you any payments you have made to him. He cheated you, plain and simple. It's not illegal, just immoral and chicken sh--!