Short Pay Refinance – Short Payoff Refinance – Short Pay Refi
Short Pay Refinance allows the borrowers to keep their home, lower their payments and reduce their principal balance.
Short Pay Refinance – Stay In Your Home
Although the “Short Sale” has become a well-known solution for borrowers to avoid foreclosure by selling their home for less than what is owed, the “Short Pay Refinance” (Short-Pay Refi) is becoming a popular tool for borrowers to retain their home, lower their principal balance and most importantly, lower their monthly payment with a fixed-rate FHA insured loan.
What’s a Short Pay Refinance?
This process is similar to a short sale but, instead of the property being sold, it is refinanced with a new lender. A Short Pay Refinance is unique in that it allows the borrowers to keep their home, lower their payments and eliminate the upside down equity in their homes by reducing their principal balance.
The transaction itself is basically a three-part process. Negotiations are done by us, the Advocate, in conjunction with the borrower and the lien holder. First, we need to establish the actual current value of the home. Next, we run the FHA approval on your borrower at the maximum LTV for that new value and issue an approval. Now, armed with our comps at current market value and our approval, WE enter into equity re-negotiations with the bank/loan servicer for a discount on the current mortgage. Once the bank/loan servicer accepts the offer presented, we can complete the new loan transaction.
THIS IS NOT THE HOPE FOR HOME OWNERS PROGRAM AND DOES NOT CARRY ANY OF THOSE RESTRICTIONS!!!
Who should get a Short Pay Refinance?
For those borrowers who still have decent credit, FICO, income and no mortgage lates, but due to a decline in the value of their home (owing more than it’s worth), a Short-Pay Refi is the perfect solution. This allows the borrowers to put the brakes on before everything gets away from them and spins out of control. After the transaction is complete and the lien holder is paid off, it’s up to that lien holder as to how they are going to rate the paid-off mortgage to the credit bureaus. Depending on the lender, it may be filed as: Paid In Full, Settled, Charged-off, Paid for Less than Balance, etc.
Why would the bank/loan servicer agree to a Short Pay Refinance and not just foreclose on the property?
Banks/Loan Servicer books are becoming swamped with REOs, so now they’re more open to negotiations than ever. Remember, foreclosing on a property requires large amounts of legal fees and then the home is typically sold at a substantial discount off of the fair market value by the bank. The Short-Payoff Refinance allows the loan servicer to avoid a majority of the legal fees and lets the new lender make its largest loan based on the fair market value. In most cases, a Loan Modification can’t solve the problem as many loan servicers are not lenders; a Short-Pay Refi becomes a very powerful alternative. Short Pay Refinance put borrowers in better positions than standard loan modifications because aside from lowering the payment, they also lower the principal balance with an FHA insured loan.
Call Now To Find Out If You Qualify 888-357-FAIR
Call Now To Find Out If You Qualify 888-357-FAIR
We can make the difference between saving your home and losing your home!
