Possible to negotiate mortgage rate... without refinancing?

Have one of those ARM nightmare loans. Can't refi - husband has marks on his credit now. Options?

First of all, know this... Each foreclosure costs the bank an average of $50,000. That is a hefty bill that the bank will have to fork out. So, in other words, it is in the bank's best interests to negotiate a deal with you. Maybe you can lower your interest or extend your term, but I am confident they will be willing to work with you.

Worst case scenario, the bank may let you do a short sale for the house you have the mortgage on.

99.9999% of the time NO. If, in this market, the lender views you as potentially over leveraged and at risk of defaulting it's very possible.

If you owe 200k and the house is worth 400k.....NO CHANCE
If you owe 220k and the house is worth 200k, there is a very good likelihood.

Remember, and this is very important. Despite all the pretense recently about helping homeowners, the government has done nothing but help banks. Banks are in it for money, no offense, but they don't really care about you.....only insomuchas YOU offer them a potential for profit.

If they can make more money foreclosing, they will foreclose, if they can make more money (lose less) renegotiating you - they will renogotiate.

Don't think for a second that they care about you....the individual loan agent or teller might care about you, but not the bank.

Changing an existing contract, ANY contract, after it has been signed is very hard and has many legal implications. This is why they want to to refi, so that everyone can simply sign a new contract under new conditions.

If you already own the home and have not defaulted on your payments you should be able to refi through the same bank (not a different one if your credit is bad). Call your bank and ask them your options, they likely have plans in place, you just need to contact them.