How would you like to reduce what you owe to your lender and not have to pay it back? Sounds great and now it may be possible.  A result of this perfect financial storm, property values are falling below their debt obligations.  This is referred to as being "Upside Down" and this is not good for the homeowner or their lender.  Increase government bank regulations are placing  higher liquidity requirements on the banks to safeguard standards because of the high number of defaults.

Loan modifications have reached a point where the homeowner is seeing little benefit to begging for a more affordable payment to keep their over leveraged home. Considering all the expenses modifying a mortgage, the need for a lender to maintain higher reserves for trouble loans, and coupled with the realization many modified loans will most likely default again sometime before the modification term expires,  banks are thinking now may just be the time to unload as much troubled mortgage debt as they can.

PRINCIPLE BALANCE REDUCTION

This brand new program is made for the consumer and a much less expensive process for a lender than an eventual foreclosure.  This program is designed to lower the balance between 80-90% of the current market value of the home. Having a home with equity and no longer underwater allows the owner to now sell their home without a short sale or keep it at a more affordable payment. You may be asking what happens to the difference between what is currently owed and the new loan?  It disappears! This happens because the lender is agreeing to accept less value to sell the note to the new note buyer.

Here is an example of how it could work.   A home having a first mortgage of $300,000 and a current market value of $200,000 is underwater.  After the prospective note buyer negotiates with the lender the new loan amount could be between $170,000 and $180,000 .  This results in enough equity to allow the homeowner to either sell the home and keep a small profit or an incentive to the homeowner to keep the home at a new lower monthly payment. Sounds great and the benefits keep coming.

  • Lower monthly payments and a little equity
  • New loan payment based on a FIXED 30 year mortgage
  • No Deficiency Judgment or 1099 to deal with
  • Co-borrowers can be added to the loan
  • No title seasoning requirements
  • Rebuilds credit
  • No assets required and closing costs are included
  • Behind or current in payments is okay
  • No minimum credit score requirements
  • Currently in FORECLOSURE or Notice Of Default may still be workable
  • Loans previously modified can still go into this new program
  • MUST have employment, but No required length of time

What's the catch???

Your current lender must be agreeable to selling the note at a discount.  This happens in the lending industry all the time.  There is a third party provider or processing company who must order the following services and you pay these costs up front just like a normal refinance.

  1. An appraisal
  2. Credit Report
  3. Loan audit
  4. Processing costs

$895.00 for a First Mortgage and $595.00 for each additional mortgage or lien on the property.  Before the process begins a completed application must be submitted and reviewed to determine if there is an opportunity for this to work much like a loan pre-qualification.  If so, the paperwork is assembled and payment is made directly to the third party provider to begin.

Is there a guarantee of a new discounted loan? NO! Every attempt is made to make sure the process will be successful, but lenders change their internal guidelines base on the needs of their investors and market conditions and that is reason why a guarantee can not be given.

How long does this take? 3 to 6 months! Currently, if you're in foreclosure the third party provider works with the lender to put a delay on the process.  Expect processing times to increase as more homeowners take advantage of this  program.

Do I pay you the money? NO, the processing center takes the money after the pre-screening process has been completed and when the paperwork is assembled.

Is this considered a refinance?  YES! It's a similiar process, except there are less stringent income and credit requirements.  It's not a process of creating new debt or taking on a new obligation, but a restructure of an old obligation.

Who puts up the money to buy these underwater loans?  Hedge Funds, there is a lot of money out there looking for opportunities.  Mortgages are a great way for them to invest money, especially if the loan is performing and there is equity in the deal.  The current lender takes a deep discount to create this equity and the new investor has more security in the deal.

Can this work for multi million dollar homes?  Yes, a more expensive home may see hundreds of thousands of dollars in savings.

How do I get started?  Right Here, register your general information on this site and we will get back with you as soon as possible.

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