Short Refinance Instead of Short Sale!

A short-refi can help more people than just those facing foreclosure. A short-refi can also help those that are facing an upcoming adjustment on their ARM (Adjustable Rate Mortgage) loan, where the new interest rate will put their monthly payment out of their financial reach. It can also be used for homeowners that have properties, where they are upside down on the value of their homes.

This, pertaining to homeowners in recent years that have purchased homes in certain areas, where property values have plummeted, leaving homeowners with values way below the original purchase price. A short-refi will also work for investment properties or non-owner occupied properties.

Investment properties and non-owner occupied properties are harder to get approved and definitely depend on the lender for acceptance. For the most part, in any situation, a lender is more willing to accept these types of offers if the borrower has fallen behind on payments, but it is not necessary. In other words the lender needs some type of motivation to be willing to accept a short-refi offer. We give them the motivation, by showing them the "big picture", by letting them know what the future holds if they don't remedy the situation now. The lenders are not in the business of collecting real estate, which is what has been happening lately.

They are in the business of lending. A lot of properties that end up in foreclosure, have no bidders at the foreclosure sale. Therefore, the lender ends up owning the property, which is referred to as an REO (real estate owned). Most lenders have more REO properties than they can handle and definitely do not want more. It ends up costing them thousands to maintain these properties, along with the thousands they have already lost, due to the foreclosure itself.

If a property goes to a complete foreclosure, the money lost in back payments, interest, late payment fees and attorney costs alone can be in the thousands. If the property doesn’t sell at the foreclosure sale, they have additional costs of more attorney fees, clean up crew costs, maintenance and repair costs, insurance premium costs, taxes and realtor fees.

Lately, some homeowners that have been foreclosed on have stripped houses bare, leaving the lender to endure the cost of replacing everything from carpet to the kitchen sink. Even on a property worth only $100,000.00, the cost to the lender to go through a full foreclosure can be well over $50,000.00 and that doesn't usually include the cost of all of the back payments lost, including interest owed on the loan itself.

The costs involved of going through a foreclosure alone, gives most lenders the incentive to accept an offer to settle. There is also no ideal LTV that we work with. We will work with properties that are 100+% LTV and some that are less. Every situation will be unique and will be dealt with on a case by case basis.

What you can expect from these experts?:

In a short-refi negotiation, their goal is not to have your current lender refinance the loan themselves and never has been. Some lenders will, but it is very rare. There has been some buzz on the internet lately, about a company that was trying to get the current lender(s) to take a short-payoff, then turn around and refinance the loan themselves, while using the term "short-refi" as their process.

The publicity this company was receiving, indicated the company was getting nowhere with their process and that lenders were denying their efforts to refinance with the same lender.

On the other hand, the new approach is to completely different, and has been shown to be successful. The company works with your current lender, to accept a pay-off of less than owed on the property. The entire process of a short-refi relies on getting to the decision maker of the lender. I won’t go into detail about the negotiation process, due to the fact that it is a trade secret and cannot be disclosed.

First, a line of communication between your current lender and the negotiators is opened. Once this is accomplished, they proceed to the decision maker and put together a packet of information, to aid them in their decision to accept, counteroffer or deny the offer of a short-refi. The length of time involved for the entire process, truly depends on the lender.

Lately lenders have been bogged down with requests, which have overloaded the already small loss mitigation departments of most lenders. So a true timeline cannot be established. For the most part, it should take between six and eight weeks to complete. Some lenders can be a little quicker and some will take longer.

When making their decision to accept an offer, most lenders will ask to have a BPO (brokers price opinion) completed, which can also take some time. A BPO will be performed by a local real estate agent. They will be dispatched by your current lender, to go through your property and inform the lender as to what the property would be worth, if sold on the market today. Basically what they will give them is a "fire sale" price, if they had to get rid of the property quickly. To sum it up, the BPO usually comes in a lot less than a true appraisal.

The lender is trying to figure out if they are better off accepting the offer or letting the property go to foreclosure, where most of the time, they find that if they accept the short-refi offer, the outcome will be relatively the same and with less headaches. To get a BPO done, alone, can take up to two or three weeks, by the time the realtor is dispatched, performs the BPO, gets it back to the lender and usually two departments at the lenders analyze it. Once this is complete, the answers from the lender(s) usually come within the week. Once we receive the approval of a short-refi, the negotiators will then move forward to complete the short-refi and get your life back in order.

This short-refi process may be the sign of relief the American homeowner has been looking for in to get their families back on tract, and to save their homes from foreclosure. The banking industry is not real happy about the new legislation pressuring the banking industry to take any measures necessary to save homeowners from foreclosure and the loss of their homes.

To Your Success in Home Ownership,

Colin F. Watson

CEO

www.Loans4Heroes.com

Phone: 888-242-5282888-242-5282