4 ms·

You can refi the interest rate (maybe). You can never just change the amount owed.

988747 4y ago
> You can never just change the amount owed. Let me introduce you to a scary concept of mortgages in foreign currencies :) We had that in Poland over a decade ago: People would get loans in Swiss franks, and when exchange rate went from 2 PLN per 1 CHF in 2007/8 to 4.8 PLN today the amount owed (expressed in PLN) more than doubled. Of course right now such loans were deemed illegal and courts are invalidating them now, one by one, but for a long time it was a real burden for people.
- mywittyname 4y ago
  Americans don't realize just how good they have it when it comes to debt and mortgages in particular.
- gitanovic 4y ago
  So what happened to the property? Did people with an invalid loan get a free property? Or it was forced to be sold to repay the loan in PLN? Or the owed value was calculated in 2007/8 PLN value? Sorry for having so many questions, but this seems to open a pandora's box of complications
  - 988747 4y ago
    No, no one is forced to sell. The two available options (depending on some nuances of how your loan was actually set up) are: - Your loan is converted to PLN, you get a refund of all the extra costs incurred by the currency exchange rates, and you continue to pay off your loan in PLN. - Your loan is considered invalid and is abolished, which means that you have to pay back the original sum to the bank, and the bank has to repay you all the payments you made over the years. If your loan was issued a long time ago you typically will come ahead (over years your payments add up). This means you keep the property and are debt-free. If it turns out you still have a significant amount to pay off you can refinance it.
bombcar 4y ago
It used to be, in rare cases, when banks did not resell mortgages forward, that you could renegotiate the principle amount in lieu of foreclosure. Basically, everyone would recognize that the bank could take a $50k wash if they foreclosed, so for the right deal they'd take a smaller wash, and you'd have a lower principal amount and a longer payment term or similar. It still happens with big commercial loans at times.

> You can never just change the amount owed. Let me introduce you to a scary concept of mortgages in foreign currencies :) We had that in Poland over a decade ago: People would get loans in Swiss franks, and when exchange rate went from 2 PLN per 1 CHF in 2007/8 to 4.8 PLN today the amount owed (expressed in PLN) more than doubled. Of course right now such loans were deemed illegal and courts are invalidating them now, one by one, but for a long time it was a real burden for people.

mywittyname 4y ago
Americans don't realize just how good they have it when it comes to debt and mortgages in particular.
gitanovic 4y ago
So what happened to the property? Did people with an invalid loan get a free property? Or it was forced to be sold to repay the loan in PLN? Or the owed value was calculated in 2007/8 PLN value? Sorry for having so many questions, but this seems to open a pandora's box of complications
- 988747 4y ago
  No, no one is forced to sell. The two available options (depending on some nuances of how your loan was actually set up) are: - Your loan is converted to PLN, you get a refund of all the extra costs incurred by the currency exchange rates, and you continue to pay off your loan in PLN. - Your loan is considered invalid and is abolished, which means that you have to pay back the original sum to the bank, and the bank has to repay you all the payments you made over the years. If your loan was issued a long time ago you typically will come ahead (over years your payments add up). This means you keep the property and are debt-free. If it turns out you still have a significant amount to pay off you can refinance it.

bombcar 4y ago

It used to be, in rare cases, when banks did not resell mortgages forward, that you could renegotiate the principle amount in lieu of foreclosure. Basically, everyone would recognize that the bank could take a $50k wash if they foreclosed, so for the right deal they'd take a smaller wash, and you'd have a lower principal amount and a longer payment term or similar. It still happens with big commercial loans at times.