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Short Refinance/Principal Reduction When equity is the biggest stumbling block, a short refinance is a great option that reduces the principle you owe. Acinc Lenders services and Lends in most states call for information 954.934.5422 YOU WILL HAVE A NEW FHA LOAN AT TODAY'S CURRENT VALUE. YOUR CURRENT LENDER PAYS ALL OF YOUR NEW LOANS CLOSING COSTS-NO OUT OF POCKET EXPENSE How a Short Refinance Works -- An Example: It's a difficult scenario to face: You owe more than your home is worth. In a short refinance, the lender agrees to forgive the amount of principle you owe above what your home is worth, and allows you to refinance your mortgage with new terms (much as you would in with a typical refinance). In short...you stay in your home with much more affordable payments. Inside the Numbers... Let's assume your home was purchased for $240,000 but is now worth only $160,000. Here's how a short refinance could save you $633.43 per month. Current Mortgage New Mortgage Principal: $240,000 Rate: 6.5% Term: 30 years Current Payment: $1516.96 Principal: $160,000 Rate: 5.25% Term: 30 years New Payment: $883.53 Acinc Lenders negotiates with your current lender to forgive $80,000 based on your home's current $160,000 value. We then refinance your loan as well. Our Short Refinance Experts Negotiate For You. Current Lender PAYS YOUR CLOSING $ AcincLenders experienced staff can work with your lender to help you reduce your principle and avoid foreclosure and more significant damage to your credit. We can then refinance your mortgage with better rates, and payments that work within your budget. Call us at 954.934.5422 now, and we can discuss your situation in greater detail. There's no risk. No pressure. And no obligation. We're here to help.
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What is a Short Pay Refinance? I would like to share the newest and most talked about thing that this market has ever seen! It is called a SHORT PAY REFINANCE!!! This is when the existing lender accepts a reduced payoff on the existing loan that they carry. Now this is not something that a client can call up and ask their lender to do. This is backed and promoted by the Obama Administration. If you or anyone you know is Underwater on your mortgage then please call me now. There is a moratorium on foreclosures scheduled to lift on Sept.15th. Existing lenders are very well aware of this date and are currently negotiating to get the highest dollar amount possible. If any of this interests you, I can send you a ton of information to show you that, not only are we the pioneers of these transactions, but we are getting them done at a record speed. DON’T miss out on this opportunity to BUY YOUR HOME AT CURRENT MARKET VALUE. We are not only having success at dealing directly with Loss Mitigation with just about every bank, but we have built relationships with them as well. If you are interested in learning more, please call or email me. We have testimonials from people that were non believers, as well as actual closed transactions. This is not a gimmick, it is not too good to be true, and it is a government back program that in the upcoming months will be the most talked about transaction
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Right now, we are witnessing first-hand the worst real estate crash in U.S. history. Someday many of us will look back at years 2007-20?? and say, "Yeah, those were the days when we owed more than our houses were worth." But in the present day, in the midst of our housing crisis, we must decide what to do about it. Bottom-line is, nobody wants to lose their home, but most would rather lose that than lose money- and keep on losing it. So do I sell short or walk away? These are two things that come to mind when homeowners think about their equity lost and cutting their losses short. Unfortunately, both of these choices involve moving out of one's home and all of the trauma that goes along with it. There's hardly a bright side to either one, but what if there were another way? Today, I want to give you an alternative option to consider, which may also be for the greater benefit of our national economy: SHORT REFINANCING. Fed Chairman Ben Bernanke said it best, "With low or negative equity... a stressed borrower has less ability (because there is no home equity to tap) and less financial incentive to try to remain in the home. In this environment, principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure." In layman's terms, reduce the loan balance or else the house forecloses. The easiest way for me to explain the way a short refinance works is to draw the analogy between that and a short sale. By now we've all heard or spoke about someone short selling their property, typically because they can no longer afford the payments and cannot sell it at a high enough price to payoff their existing lender. In a short sale, the lender's potential losses- by having to foreclose on a home and incur the costs of re-selling it on the open market- are reduced by accepting a buyer's offer for less than what is owed. Obviously, no bank or investor wants to accept a payoff of less than what they originally lent out, but by not accepting such an offer they run the proven risk of recouping far less than that later. Most importantly, a short sale pays the bank whatever they can get for the home NOW. In finance, we like liquidity and appreciate the time value of money. A bank can use this partial payoff and quickly re-allocate it to less risky borrowers who pay on time, thereby realizing an immediate profit. It takes at least 6 months for a bank to recover a home once a borrower misses their first payment! As bank's must report quarterly profits, 6 months can be an eternity for them to wait their money. Okay, I think we can all agree that a short sale may be in a bank's best interest if doing nothing can result in greater losses. The concept of short refinancing works in the exact same way, except in a short refi the current homeowner remains the homeowner. Let's compare these two concepts more closely: •In a short refi, the lender accepts a "short payoff" for less than what is owed, just like a short sale. This is fairly easy to understand, as a full payoff would be considered a straight forward refinance. •In a short refi, the lender should reduce the principal balance for LESS THAN the true market value of the home. This may not be so simple to comprehend as one might think the bank would be giving up more money than necessary. However, if a lender does not leave some equity in the home, a new lender would not take the risk of refinancing it. Its investors require a little cushion in the event that property values drop further. Presently, the highest loan-to-value ratio loans are being offered by FHA (Federal Housing Administration), which are capped between 95%-97.5% depending on loan amount. Even at these high levels, banks must write-down an additional 2.5-5% in order for an FHA guaranteed loan to come to the rescue and pay them off. 2.5-5% is not too much to ask, considering the bank would pay realtors a 6% commission for short selling the same home (not to mention the added closing costs). The new FHA bailout plan calls for lenders to forgive principal balances down to market value PLUS an additional 10%! *The FHA bailout is targeted towards delinquent borrowers, which is not being discussed here. More on this topic later... •For a short refi, YOU DO NOT HAVE TO BE LATE, unlike a short sale. *If you are or have been late, ask me about a "short modification." In fact, most refinance options are limited if you have been late on your mortgage. Present underwriting guidelines for FHA loans do not allow mortgage lates, unless those lates happened AFTER an Adjustable Rate Mortgage payment increase (See FHASecure). On the other hand, you may need to prove that there is imminent threat of becoming late if they decide to do nothing. For instance, you have a negative amortization loan that will balloon in payments 2X what you are paying now, and you will certainly default if the future payment is not reduced. Threatening to walk away, simply because there is no equity, may not justify a short refinance. •To enter into a short refinance negotiation with your lender, you do not have to wait for Congress to pass the FHA bailout plan (a.k.a FHA Housing Stabalization and Homeownership Retention Act of 2008). Short refinancing involves direct negotiation with your lender, at your lender's option, just like a short sale. Laws do not need to be enacted before a lender can agree to accept a lesser sum for payoff. For them, this is purely a business decision. •To enter into a short refinance negotiation with your lender, you should be able to prove financial hardship, just like a short sale. It may be difficult to convince a lender to reduce the total debt owing if you can truly afford to pay it. Remember, a lender may not be willing to accept less money unless they risk losing more by doing nothing. Lenders are aware that many borrowers would rather continue paying on their high cost mortgages instead of sacrificing their good credit. At the same time, you must be able to prove ON PAPER that you can afford principal and interest payments at the reduced loan amount. •For a short refi, you may want to take on the services of an experienced loan broker to pre-qualify and negotiate your case. Because you must be able to qualify for an entirely new loan, only a licensed loan originator can successfully fund a short refinance. Call Acinc Lenders for support 954.934.5422 or email AcincLenders@gmail.com
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The Short Payoff Refinance, which is done through our standard FHA Loan Program. Where as a “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 Payoff Refinance” (Short-Pay Refi or SPR) is becoming a popular tool for borrowers to retain their home. What’s a Short-Pay Refi? 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 Refi is unique in that it allows the borrowers to keep their home, lower their payments and eliminate the upside down equity in their homes while reducing their principal. The transaction itself is a basically a three part process. Negotiations are done by Acinc Lenders in conjunction with the borrower and the lien holder. First an appraiser needs to establish the actual current value of the home. Next, we underwrite the borrower at the maximum LTV for that new value and issue an approval. Now, armed with the appraisal and our approval, 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. Who should get a Short-Pay Refi? For those borrowers that still have decent credit( no more than 1, 30 day mortgage late in the past year), ficos, income,but do to a decline in the value of their home (owing more than it’s worth), a Short-Pay Refi is the perfect solution. FHA credit Guidelines do apply. Aside from the decrease in the home’s value, there are certain scenarios where the current lender will be more open to the proposal, specifically, where there are financial challenges on behalf of the borrower and where default may be imminent due to these challenges or where the mortgage interest rate is scheduled to adjust upward. Remember, the intent is to refinance into a low fixed rate FHA loan at the highest LTV possible (97% FHA). This allows the borrowers to put the brakes on before everything gets away from them and spins out of control. THE CURRENT LENDER ALSO PAYS ALL THE CLOSING COST ASSOCIATED IN THE NEW SHORT PAY REFINANCE. After the transaction is complete and the lien holder is paid off, it’s completely 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, etcetera. This something arived at during negotiations. Why would the bank/loan servicer agree to a Short-Pay Refi and not just foreclose on the property? Banks/Loan Servicers books are becoming swamped with REO’s, so now they’re more amenable to negotiations then 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. The Short-Pay Refi allows the loan servicer to avoid the majority of the legal fees and let’s the new lender make its largest loan based on the fair market value. When 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 Refi’s put borrowers in better positions then standard loan modifications because aside from lowering the payment, they also lower the balance owed. If you are interested in obtaining more information or would like to apply for a FHA Short Refi feel free to contact me: ACINC LENDERS, ARTHUR CANDLER 954.934.5422 OR EMAIL AT ArthurCandler@aol.com
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Short Pay With SPS Select Portfolio Servicing (SPS) is a loan servicer. Even though you didn't actually get your loan through this company, you still submit your monthly payment to them because at some point, SPS bought that loan along with many others. This can get quite confusing and it's best to check your monthly mortgage statement to find out exactly who you should be working with if you are in need of a short pay or principal reduction loan. How They Work A Select Portfolio Servicing Short Pay is attainable. As a participant in President Obama's Making Home Affordable plan, there is a higher chance of getting a successful short pay with SPS. The program offers SPS an incentive to adjust your loan to a mortgage affordable monthly payment. Through July 2009, SPS has offered the plan to only 20% of its eligible customers so the majority of homeowners being serviced by SPS still have an opportunity to qualify with this program. Do You Qualify For a Select Portfolio Servicing Short Pay-Principal Reduction Loan ? Your chances of qualification with SPS are good, simply based on the fact that they are trying to adjust loans and participate in the government's Making Home Affordable plan. Of course, we'll need to have a free consultation with you to find out exactly how good of a case you have with your lender. We can get moving on your Short Pay with SPS right now. You may call us at the number provided at the top of this page.