- Have you been current on your mortgage for the last 12 months?
- Do you currently owe more on your mortgage than the house is worth?
- Are you unable to refinance out of your existing loan?
- Have you been employed for the last 2 years?
- Do you have a 620 credit score or above?
- Short-Pay-Refinance: Is when the proceeds from a refinance fall short of the balance owed on a loan secured by the property refinanced at current value
- BPO (Broker Price Opinion): Lenders valuation of equity (or lack of), by determining the probable selling price
- FHA (Federal Housing Administration): A Government mortgage that is insured by the federal housing administration
- Mortgage Insurance: Insurance protecting a lender from a mortgagor's default
These new terms are typically obtained through loan modification, short sale negotiation, short refinance negotiation, deed in lieu of foreclosure, cash-for-keys negotiation, or a partial claim loan or other loan work-out. All of the options serve the same purpose, to stabilize the risk of loss the lender (investor) is in danger of realizing.
The different options are available to homeowners to try getting the homeowner to "perform" (pay timely) and cure the potential loss the lender/investor projects incurring through the foreclosure process and auction sale of the property.
An HUD-1 Statement is a document prepared by a closing agent describing a real estate transaction, including the escrow deposits, commissions, loan fees, points, hazard insurance, and mortgage insurance.
A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower ) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.
Critical Steps to Remember When Short-Pay-Refinancing your Loan:
- ACT NOW! Do not procrastinate. Remember that this is not a process that is advertised by your lender, norwill it be in the future. The reality is that the moment that lenders regain leverage or control of the market due to property values rising, they will have no incentive to work with you in form of a Short-Pay-Refinance.
- Make sure to seek professional assistance due to the complexity of this process.
- Do not submit false or untruthful information…EVER. Remember, this is what got us all in this mess in the first place.
- Be timely with any additional documentation requested by your lender (within 24 hours if possible.
- Be persistent and don't give up. I am a firm believer in the old saying, " a squeaky wheel gets an oiling." Turning a blind eye and "assuming" will truly get you nowhere in this day and age.
With a Short-Pay Refinance, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor but more importantly the lender.
This negotiation is all done through communication with a bank's loss Mitigation or workout department. The homeowner/debtor refinances the mortgaged property for less that the outstanding balance of the loan, and turns over the proceeds of the refinance to the lender in full satisfaction of the 90 to 97 percent agreed upon debt.
In such instances, the lender would have the right to approve or disapprove of a proposed loan balance. These circumstances are usually related to the current real estate market and the borrowers' financial situation.
For more information or to contact Mr. Hogarty go to www.oflcorp.com
