It took us over a year, but we worked out this modification for one of our favorite clients.
The borrowers got an interest rate reduction from 5.0% to 2.0%, topping out at 3.5% after seven years.
Payments dropped from $1,523 plus taxes and insurance to $681 plus taxes and insurance.
This was an underwater property. We were able to get a principal reduction because Chase has been giving principal reductions to do penance for its getting caught in the robo-signing scandal.
The principal reduction was $67,000, and the principal deferral was $56,000.
With a principal deferral there are no interest and no payments on the deferred principal. The principal is owing at the end of the loan or when the borrower sells or refinances the property, in this case after 25 years.
The clients were very happy.