What do I have to do to re-negotiate my loan terms with a bank?

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What do I have to do to re-negotiate my loan terms with a bank?

I have an investment property in NV that is quickly becoming a money pit. The property went down in price, renters left leaving a significant damage to the property, and renting it out is taking a long time. We applied for a loan modification 3 times, but were denied every time. We are making payments every month and do not want to walk out or foreclose, but it is becoming more and more difficult to stay with this house. What we are looking for is a real estateattorney who can re-negotiate the loan conditions for us. We want someone in San Diego who can meet with us and go over the details.

Asked on November 2, 2010 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

First, bear in mind that a bank is under no obligation whatsoever to renogiate your loan with you or provide you any relief; it is purely voluntary to do so on the basis of the lender. In that regards, an attorney will not necessarily help you renogotiate: if what you are offering is not to the bank's advantage, it doesn't matter how or who presents it. In your current situation, why would a bank consent to a modification--it's still being paid under the loan. The bank does not care whether or not that is difficult for you and has a right to insist on performance of the loan as written.

That's not to say you shouldn't try to renegotiate, but you have  to come up with some advantage to the bank, and it's difficult to see, at present, what that advantage would be.

You should speak with a bankruptcy attorney; bankruptcy may offer some good advantages to you, especially a chapter 13  bankruptcy that affords the opportunity to "cram down" the value (and therefore amount owed) on investment property that is underwater. This is particular so if the investment property is owned by an LLC or corporation you set up, since you could then file for the business entity, but not personally. As a general matter, what you want for this situation is NOT a real estate attorney (they are specialists in contracts of sale, closings, easements, and property line disputes) but a bankruptcy attorney with experience in helping those in debt.


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