Short Pay Refis – If You Don’t Know What They Are. . . You Should – Part 8 of You Owe More on Your Orange County Home than It’s Worth, and You Don’t Know What to Do!
This is a series for people who are “upside” down in their homes and looking to learn about their options.
For more information the rest of the series, see:
You Owe More on Your Orange County, CA Home than It’s Worth & You Don’t Know What to Do – Intro
Loan Modifications and Obama’s Making Home Affordable
Obama’s Making Home Affordable Refinance Program.
Short Sales – What are They and Can You Get One?
Foreclosure and Deed in Lieu of Foreclosure.
Short Sales and Foreclosures – What Effect Do They Have on Your Future?
In my last post, I discussed the effect that short sales and foreclosures have on your future. Today, I’m going to discuss short pay refis for Orange County Homes. What are they? Do you qualify?
A short pay refi or refinance has some similarities to a short sale in that the lender forgives some portion of the debt owed when it is paid off. The big difference is that instead of selling the house to a new buyer, the owner actually keeps the house.
In the case of a short pay refi on an Orange County home, the owner would apply for a refinance. The difference from a typical refiance is that the current lender has to agree to accept less than is owed when the home is refinanced.
As an example, you owe $600,000 to your lender, but your home is only worth $400,000. The current lender would have to agree to forgive the difference when you receive the new loan.
Why would a lender allow a short pay refi on an Orange County home? For the same reasons they might agree to a short sale: you are in imminent danger of becoming late on your loan due to a hardship; you can’t continue to make the current payments; and it may make more fiscal sense for the bank to do a short pay refi than foreclose on your property.
Can you qualify?
The following are the requirements for a particular lender who is doing short pay refis.
- Zero 30 day lates in the last 12 months
The lender that I am aware of who is doing the short pay refis for Orange County homes does not permit any 30 day lates in the last 12 months. So, this is for people who are in danger of going into default (failure to pay their mortgage), not for people already in default.
- Mid FICO 620
- Some lenders absolutely refuse to allow them. (Please contact me for details).
- Some lenders require that the borrower apply for a loan modification first (Please contact me for details).
Short pay refis have obvious benefits over short sales if you qualify, in that you get to keep your home.
We know what your options are when you owe more on your home than it’s worth and don’t know what to do, and we will share it with you over the next few weeks.
If you want to make sure not to miss any of this series, please subscribe to this blog to learn your options.
If you have questions in the meantime, please contact Christine Donovan at 714-319-9751 or e-mail Me!
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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.
Are you upside down in your home? Do you owe more on your Orange County home than it’s worth, and you don’t know what to do? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.
Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about our system which will make your buying and selling experience easier.
Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.
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Copyright © 2009 by Christine Donovan, All Rights Reserved. Short Pay Refis – If You Don’t Know What They Are. . . You Should – Part 8 of You Owe More on Your Orange County Home than It’s Worth, and You Don’t Know What to Do!