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  • April 2, 2008 at 6:10 AM #12323
    contraman
    Participant

    Observing the landscape and the bath that banks are taking on foreclosed properties, it seems that one option for them would be the principal reduction loan. As a mtg broker here, I am starting to see this happen with some of my clients…

    Here is why:

    1) Borrowers stay in the home, hence no foreclosure, and no increased inventory flooding the market.

    2) They Re-Qualify with a FULL DOC loan at 90%current market value that is alot more marketable in the secondary arena.

    3) Overall, this IS a cheaper alternative for them than the foreclosure process and the respective associated costs.

    If I were a betting man, you will see alot of this moving forward. Especially, if the Government works something out with the banks to eat the difference here…..quite possible.

    April 2, 2008 at 8:42 AM #180020
    SD Realtor
    Participant

    Way more then quite possible. Mostly probable is a better description. It will mostly work out per the plan that will be discussed on April 9th. A new loan will be created based on the current value of the home. The FHA will insure the new loan. The old loan will be wiped out and the bank will take the write down. What is not being discussed publicly is that the government will more then likely “make sure” the banks do not go under do to the write downs. I would presume the new loan gets taken on by either one of the GSEs or some other entity.

    Can you say presto?

    Soon it may not be much use to look at loan reset charts.

    SD Realtor

    April 2, 2008 at 8:42 AM #180094
    SD Realtor
    Participant

    Way more then quite possible. Mostly probable is a better description. It will mostly work out per the plan that will be discussed on April 9th. A new loan will be created based on the current value of the home. The FHA will insure the new loan. The old loan will be wiped out and the bank will take the write down. What is not being discussed publicly is that the government will more then likely “make sure” the banks do not go under do to the write downs. I would presume the new loan gets taken on by either one of the GSEs or some other entity.

    Can you say presto?

    Soon it may not be much use to look at loan reset charts.

    SD Realtor

    April 2, 2008 at 8:42 AM #180008
    SD Realtor
    Participant

    Way more then quite possible. Mostly probable is a better description. It will mostly work out per the plan that will be discussed on April 9th. A new loan will be created based on the current value of the home. The FHA will insure the new loan. The old loan will be wiped out and the bank will take the write down. What is not being discussed publicly is that the government will more then likely “make sure” the banks do not go under do to the write downs. I would presume the new loan gets taken on by either one of the GSEs or some other entity.

    Can you say presto?

    Soon it may not be much use to look at loan reset charts.

    SD Realtor

    April 2, 2008 at 8:42 AM #180006
    SD Realtor
    Participant

    Way more then quite possible. Mostly probable is a better description. It will mostly work out per the plan that will be discussed on April 9th. A new loan will be created based on the current value of the home. The FHA will insure the new loan. The old loan will be wiped out and the bank will take the write down. What is not being discussed publicly is that the government will more then likely “make sure” the banks do not go under do to the write downs. I would presume the new loan gets taken on by either one of the GSEs or some other entity.

    Can you say presto?

    Soon it may not be much use to look at loan reset charts.

    SD Realtor

    April 2, 2008 at 8:42 AM #179636
    SD Realtor
    Participant

    Way more then quite possible. Mostly probable is a better description. It will mostly work out per the plan that will be discussed on April 9th. A new loan will be created based on the current value of the home. The FHA will insure the new loan. The old loan will be wiped out and the bank will take the write down. What is not being discussed publicly is that the government will more then likely “make sure” the banks do not go under do to the write downs. I would presume the new loan gets taken on by either one of the GSEs or some other entity.

    Can you say presto?

    Soon it may not be much use to look at loan reset charts.

    SD Realtor

    April 2, 2008 at 8:43 AM #180099
    (former)FormerSanDiegan
    Participant

    Contraman –

    What are the precipitating conditions for a short re-fi ?

    Does the property have to be in default ?
    Could any Joe Schmoe who is upside down (but otherwise capable of making payments) do this sort of thing ?

    April 2, 2008 at 8:43 AM #180026
    (former)FormerSanDiegan
    Participant

    Contraman –

    What are the precipitating conditions for a short re-fi ?

    Does the property have to be in default ?
    Could any Joe Schmoe who is upside down (but otherwise capable of making payments) do this sort of thing ?

    April 2, 2008 at 8:43 AM #179641
    (former)FormerSanDiegan
    Participant

    Contraman –

    What are the precipitating conditions for a short re-fi ?

    Does the property have to be in default ?
    Could any Joe Schmoe who is upside down (but otherwise capable of making payments) do this sort of thing ?

    April 2, 2008 at 8:43 AM #180011
    (former)FormerSanDiegan
    Participant

    Contraman –

    What are the precipitating conditions for a short re-fi ?

    Does the property have to be in default ?
    Could any Joe Schmoe who is upside down (but otherwise capable of making payments) do this sort of thing ?

    April 2, 2008 at 8:43 AM #180013
    (former)FormerSanDiegan
    Participant

    Contraman –

    What are the precipitating conditions for a short re-fi ?

    Does the property have to be in default ?
    Could any Joe Schmoe who is upside down (but otherwise capable of making payments) do this sort of thing ?

    April 2, 2008 at 9:18 AM #180034
    contraman
    Participant

    FSD,

    The property does not need to be in default. Any Joe can qualify that has the income to support the new mortgage payment at a reasonable DTI. Should get interesting here as you would have to expect ANYONE who is upside down will be doing this here if available.

    I am doing a few here for clients as we speak but am sending the majority of them to a company that specializes in them and knows exactly how to position the files…as they have a referral and affiliate program with brokers.

    Alot easier for me as it can be a tedious process working with the lender.

    Sincerely, Contraman

    April 2, 2008 at 9:18 AM #180049
    contraman
    Participant

    FSD,

    The property does not need to be in default. Any Joe can qualify that has the income to support the new mortgage payment at a reasonable DTI. Should get interesting here as you would have to expect ANYONE who is upside down will be doing this here if available.

    I am doing a few here for clients as we speak but am sending the majority of them to a company that specializes in them and knows exactly how to position the files…as they have a referral and affiliate program with brokers.

    Alot easier for me as it can be a tedious process working with the lender.

    Sincerely, Contraman

    April 2, 2008 at 9:18 AM #180038
    contraman
    Participant

    FSD,

    The property does not need to be in default. Any Joe can qualify that has the income to support the new mortgage payment at a reasonable DTI. Should get interesting here as you would have to expect ANYONE who is upside down will be doing this here if available.

    I am doing a few here for clients as we speak but am sending the majority of them to a company that specializes in them and knows exactly how to position the files…as they have a referral and affiliate program with brokers.

    Alot easier for me as it can be a tedious process working with the lender.

    Sincerely, Contraman

    April 2, 2008 at 9:18 AM #179666
    contraman
    Participant

    FSD,

    The property does not need to be in default. Any Joe can qualify that has the income to support the new mortgage payment at a reasonable DTI. Should get interesting here as you would have to expect ANYONE who is upside down will be doing this here if available.

    I am doing a few here for clients as we speak but am sending the majority of them to a company that specializes in them and knows exactly how to position the files…as they have a referral and affiliate program with brokers.

    Alot easier for me as it can be a tedious process working with the lender.

    Sincerely, Contraman

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