In Foreclosure and Want to Keep Your Home? Try a Short Refinance

This is definitely one of the big banks and lenders best kept secrets. But with the recent increase in foreclosures and the tightening of lender guidelines, which makes it even harder to qualify in today’s market for a refinance, and not to mention the drop in property values in such areas as Fort Lauderdale and Miami has brought the short refinance to the front lines. While some might have heard the term Short Sale – which is the process you would go thru if you are trying to sell but you owe more than the house is worth. Now the Short Refinance – is the process you would go thru if you want to keep you home, but you need a better loan program that will be more affordable and you owe more than your house is worth so you can’t do a regular refinance. Similar to the short sale, the short refinance is a negotiation with your current lender to reduce the amount you owe to facilitate a refinance with a new lender.

Not to be confused with a loan modification. With a loan modification you will stay with your current lender and just renegotiate the terms of you loan, with the short refinance you are getting the lender to reduce the pay off, so you can get a loan with a completely new lender.

Now with any loss mitigation process, including loan modification, short sale, and short refinance, they are all on a case by case basis and the lender has the final say. So don’t expect to get the same results as your neighbor or family member received. Any company out there that offers you a guarantee that you will be approved for any of these loss mitigation options or tell you to stop making payment, you should stay clear of……and I mean run.

Now it is important to note, that you don’t have to be behind on payments or in Foreclosure to qualify for a short refinance, although majority of the people that get approved are normally in foreclosure. Today, with lenders having an abundance of non performing loans on their books has caused them to be more flexible when working with home owners to come to win win agreement for both borrower and lenders.

Also South Florida home owners in such areas as Fort Lauderdale and Miami that have found themselves with either an adjustable rate mortgage or have found themselves upside down on their homes, which has prevented them from doing a regular refinance, now have this option, that if approved, can refinance into a more affordable fixed rate mortgage and avoid foreclosure Because of the increase demand for loss mitigation, it has been taking most lenders a minimum of 45 days and up to 90 days to complete the process.

Normally when a homeowner finds themselves in foreclosure, they would only hear about 2 options either file bankruptcy or try and sell. Lately, loan modifications have become more popular, but that still doesn’t mean that is best solution for most homeowners. Here’s why, we offer the lender a short-refinance offer first and if for any reason it is not successful, then we will proceed with an offer to negotiate a loan modification for the client.

A short-refinance can basically create equity in a property, as we are getting the amounted owed to the lender reduced. It reduces the mortgage to the current market value, while eliminating the upside-down loan. While A loan modification can keep the homeowner’s interest rate down to a comfortable level and put them into a fixed rate loan, while also placing any arrearages back into the loan.

But if the property is upside-down and by the adding the arrearages back into the loan, it could be in worse shape than before. Now don’t get me wrong, if the homeowner’s intentions are to keep the property long enough for the market to turn around, then this is a win win situation for both lender and homeowner. The main purpose of a short-refinance or a loan modification is that the home owner is allowed to stay in their home.

A lot of Fort Lauderdale and Miami homeowners are realizing that their property is not worth nearly what they owe on it, several of them have opted to just walk away. A short-refinance gives homeowners’ hope, that they can get themselves from an upside-down mortgage problem, and in some cases can save their home from foreclosure. This keeps them in their home, gives them a peace of mind, and allows them to get on with their lives as the possibility of foreclosure in now behind them.

While Loss Mitigation may not be for everyone, it is important to work with an expert in the field that can analyze your situation and help you determine the best loss mitigation for you and your family.

Author: Marlon Baugh


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Coping with Foreclosure: Foreclosure Solutions

If you are facing foreclosure you are not alone. Thousands of people have lost their homes to foreclosure in the last year and thousands more will face financial hardship leading to foreclosure before things balance out.

The Foreclosure Epidemic

Subprime mortgage practices led to what is known today as the mortgage melt-down. The number of foreclosures increased sharply as interest rates were reset for those who refinanced their homes with adjustable rate mortgages (ARMs). The benefit of the ARM was that one could get 100% financing at a very low interest rate. Of course, this rate was only good for three years; most people understood this as they planned on selling their home in the next few years or simply refinancing with a fixed rate mortgage.

Unfortunately, the economy took a devastating turn; unemployment was up and real estate values declined. When people lost their jobs and were unable to keep up with their mortgage payments, this meant that they would not be able to qualify for a new mortgage to refinance their home. Those who were fortunate enough to keep their jobs were also unable to refinance because their home lost so much value that they owed more on their mortgage than the home was worth

To Make Matters Worse

The foreclosure crisis continues as people are forced to walk away from their homes. Lenders and investors are losing money and mortgage guidelines are tightened. People with perfect credit are having difficulty getting a new mortgage with an affordable fixed rate.

If you think that this can only happen to dead-beats, think again. Responsible, hardworking people are facing foreclosure every day. They are devastated; they feel helpless and they just dont know where to turn for help. They are overwhelmed with credit collection letters and phone calls from their lenders demanding that they make their payments.

To add to the confusion, they receive letters from lawyers or other companies promising to save your home from foreclosure or stop foreclosure now. Some of these companies are somewhat reputable, but many are preying on your last dollar as they demand an up-front fee for a service that gives you false hope and ultimately does not provide a solution. Generally, a reputable company will not approach you, call you, or send letters to offer their services. This is the behavior of a predator that got your name from a foreclosure list that they subscribed to.

Foreclosure Solutions

Now that I have explained how we got into the foreclosure crisis, I will cover some of the options available to you. One is to just walk away. Though many people are doing this, it should be your last resort. A foreclosure is very damaging to your credit report and it is one of the items that take the longest time to be removed from your credit history. There are cases where this is your only option, but there are others to consider as well.

You can always contact your lender to see if they will consider a loan modification plan to help make your payments more affordable. They might reduce your interest rate or increase the term of the loan. They might even go as far as reducing your balance and writing off some charges. Loan modification didnt used to be an option when people were already in foreclosure; however, today, lenders are altering their practices as they stand to take a greater loss with so many mortgages in default.

You might try selling your home, even though it is likely that you owe more than it is worth in todays market. There is a good chance that your lender will accept what is called a short sale, where they agree to take less than what is owed to them. Many lenders realize that they can cut their losss by taking a short payoff now, rather than waiting out the foreclosure process, evicting the homeowners and listing the house for sale. They stand to lose more money as the market values continue to decline.

A borrower can contact their lender to begin discussing loan modification or negotiating a short sale; however, many just dont know how to go about it. They are emotionally drained, stressed out and they do not know how to present their case. There are reputable companies who are professionals at handling these negotiations for a reasonable fee.

Article Source: the-Articles.com


Author: DavidSmith.
Search for: foreclosure solutions, foreclosure help, foreclosure options, short sale, loan modification, refinance home, mortgages, real estate services, legal help, credit consulting, home and family, finance


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