Short Refinance

Actual Case illustration:
Here is how a home owner who never missed a mortgage payment but experienced a loss in equity was saved by our Short Refinance program:

Before The Short Refinance:

First Mortgage: $390,000 Payment/Mo $3,941
Second Mortgage:$60,000 Payment/Mo $664
Total Amount owed: $450,000 Payment/Mo $4,605
Appraised Value:$400,000
Equity: -$50,000

After The Short Refinance:

First Mortgage:$386,500 Payment/Mo $2,855
Second Mortgage:$0.00 Payment/Mo $0.00
Total Amount owed: $386,500 Payment/Mo $2,855

Equity: +$13,500 monthly savings: $1,750

This is a special program reserved for well qualified borrowers with credit scores greater than 620, refinancing their principal residence, and fully documenting their income, assets, and employment.

What is a short pay-off, also known as a discounted pay-off?

Simply stated, the short pay-off refinance is a principal reduction program coupled with a refinancing. Unlike loan modifications and refinancing promoted by the "Making Home Affordable" or MHA, the reduction is permanent and is not limited to Fannie Mae and Freddie Mac mortgages.

If you have a Fannie Mae or Freddie Mac loan and the balance is 105% of the appriased value or less, exit this page and apply for the refinance offered by those entities.

If the balance is greater than 105% of the appraised value, or you do not have a Fannie or Freddie owned mortgage, continue reading.

Important Notice:

To be eligible, the following two conditions must be met:

1. The balance of the mortgage MUST be higher than the property value

2. The Borrower MUST be current with his mortgage payments, and be able to qualify for a new mortgage.

A short or discounted pay-off refinance is designed to allow a homeowner who owes more than his property is worth (underwater) to get a new and lower mortgage with another lender at prevailing market interest rates. The new mortgage is based on the new appraised value.

Steps:

1. The homeowner is approved by the new lender . This step involves a full application, underwriting of the file and a new appraisal.

2. A short-pay Consultant negotiates the settlement with the homeowner's lender(s). The following is included in the offer: the mortgage approval, the new appraisal, the homeowner's financial statement, a hardship letter, the offer of settlement, and the Consultant's contract.

3. At closing, the lender is paid the agreed amount net of the Consultant's fee which is separate from fees related to the refinancing transaction proper.

A short pay-off refinance is the only tool left for homeowners who are current on their payments but are unable to refinance due to the loss of equity in their homes. The new mortgage can be any product the home owner qualifies for.

The Short refinance is for those who want to keep their homes as opposed to the short sale where the owners want to sell their homes but are only getting offers that are less than the balance owed.

The Consultant's short pay-off negotiation requires an application fee of $300.00 (non-refundable paid upfront by the homeowner), and a balance of up to 3% of the negotiated settlement amount paid to the Consultant at closing. This amount can be derived from the loan proceeds or paid with the borrower's own funds.

Email questions to jpalla@p2funding.com