SHORT PAY-OFF REFINANCE & HOPE FOR HOMEOWNERS FHA LOAN----THE NEW LOAN STRATEGY: forget the unsustainable loan modification, save your home by refinancing!!
I wanted to write this piece as it applies to the current crisis in the mortgage and housing arena. By utilizing this creative new Loss Mitigation Home Retention Strategy homeowners will preserve homeownership, sustainability will be realized, a "Niche" product can be offered to clients truly separating yourself from competition in the industry and an increase in future listings can and will be a result. This can be utilized by all real estate and real estate finance professionals whether you are a real estate agent/broker/sales person, retail mortgage bank, loan officer for a Savings Bank, mortgage broker, direct lender.
We have been successfully closing the Short refi's for current borrowers and the Hope for Homeowner loans for those who have defaulted. We have established, developed and are maintaining relationships with Executive & Senior Management in the majority of the servicing, sub servicing and investor companies. Our current relationships exist with several Chief Executive Officers, Chief Operating Officers, Executive Vice Presidents and mostly Senior Vice Presidents of Default Management/Operations, Special Servicing and Loss Mitigation.
We hope you enjoy the information and look forward to further Distressed Asset Resolution through networking, business dealings, partnerships.
With all the different initiatives and programs that have been developed in regards to foreclosure preventative guidance there are significant challenges in preserving homeownership and assisting those who unfortunately do not qualify. Critics have argued that the case-by-case loan modification method is ineffective, with too few homeowners are assisted relative to the number of foreclosures and with nearly 40% of those assisted homeowners again becoming delinquent within 8 months. In December 2008, the U.S. FDIC reported that more than half of mortgages modified during the first half of 2008 were delinquent again, in many cases because payments were not reduced or mortgage debt was not forgiven. This is further evidence that case-by-case loan modification is not effective as a policy tool. Even despite the increased funding and the growing number of foreclosure assistance professionals in local communities challenges exist on many levels. NeighborWorks says counselors continue to report that the most common challenge they encounter when trying to save a homeowner from foreclosure is obtaining a timely response from servicing companies, with 17 percent typically waiting between 45 and 60 days for servicing to reply. And seven percent of foreclosure advisors said servicing companies were generally uncooperative when contacted.
Having understood the real estate and real estate finance industries were going to collapse I spent years establishing and developing relationships with all of the servicing, sub servicing and investor companies. Realizing that default management was ultimately the area within the banks that I needed to be connected, I focused my time and energy in building relationships with Executive and Senior Management.
Being strategically positioned and well connected while having the knowledge and experienced we have been offering a new Home Retention Product: Short Pay-off Refinance, or SHORT REFI. A new creative loss mitigation strategy under Default Management we have successfully closed and funded a variety of SHORT PAY-Off REFI's.
TO understand what a Short Pay-off Refinance (Herein After referred to as "Short Refi") is.
A short refi is realized when a borrower(s) try to refinance but the loan is SHORT to close. This occurs when the total payoff for the first mortgage lien or the first and second mortgage liens can not be PAID IN FULL.
When the new loan for the Refinance does not allow for a full payoff of the first and/or second mortgage liens the borrower has to apply for a Short Payoff with their current mortgage servicing, sub servicing company or lender. Although many people will say you MUST be late that is a myth however there are variables that play into being successful in achieving an approval for a SHORT PAYOFF.
There are two types of Short Refi's.
1) Short refi's for NON deliquent Borrowers via FHA 203B.
2) Short refi's for DELIQUENT borrowers via the Hope for Homeowners FHA loan Program.
Now many people will say, "the Hope for Homeowners program is not available and we have called several companies on the Participating List of brokers and no one could help." One of the many issues with the way the program was introduced was that it did not mention that the FHA lender had to have a FULL EAGLE, have its own Ginnie Mae mortgage back securities issuer approval and the investors to purchase these securities.
So as it works there are two processes that take place in the short refinance:
1) The origination of the new mortgage loan.
2) The submission/request for a short pay to LOSS MITIGATION- "The mitigation process."
Now with that being said, A Mortgage Banker's and Mortgage Broker's role is primarily to focus on generating business or ORIGINATING mortgage loans(business). Obviously they will have a processor and support staff that handles their flow of business. But with a SHORT REFI how is the Short Pay-Off approval to be produced or Realized??? It is a fact and can be demonstrated that Mortage originators, whether it be mortgage bankers or brokers or any support staff (openers, processors, underwriters, clearance officers, closers, Post Closing Staff), will have the:
1) Knowledge of Default Management as an industry
2) The differences in Default management/operations within the different servicing, sub servicing and investor companies
3) The experience
4) The know how- what is required to apply, the process flow, realized time frames...etc and as it has been experienced one of the more important
We work in an industry that revolves around relationships. If you do not feel this way than you may lack that quality in your business model and as a result overall success.
The majority of the Mortgage originating industry, whether it is retail or third party mortgage brokers, have thrown these types of deals to the garbage as anyone would think "these do not qualify how could they?- Some late on the mortgage, not enough equity to refinance and pay the mortgage lien(s) off in FULL, DTI to high, low fico score. This is known as FALL OUT.
Now there is a percentage of this FALL OUT that can be realized INCOME.
If you are interested in learning more about the two processes that must work in synergy 1)origination 2)mitigation of current mortgage loan
Than please do not hesitate to reach out to me. Whether I can assist you in closing deals that have been stagnant in your pipeline, reach out to executive management if you have yet to be successful on certain short pay-off approvals or if you would like a company with both formal and informal working relationships with the servicing, sub servicing and investor companies than I would be pleased to further succeed with my MISSION: DISTRESSED ASSET RESOLUTION.
Charles O. Sanchis
C.O.S. Holding, Inc.
153 E. 32nd Street
New York, NY 10016
Distressed Asset Resolution
Subsidiary of C.O.S. Holding, Inc-
153 E. 32nd Street
New York, NY 10016