Short Sale Re-Finance?

Question

I went to a foreclosure mediation with someone this morning and one of the options the lender gave her (the homeowner) was a short sale re-finance, where the homeowner can actually purchase her home back in a short sale (through another lender, I'm sure). This was new to me, and it was new to the mediator as well.

Has anyone heard of this, or had any experience with it that can elaborate some more for me?

Has anyone heard of this, or had any experience with it  that can elaborate some more for me?

Priscilla Z. · Answer

Hey guys....I'm seeking info myself.

I went to the mediation, they went over the loan modification papers they needed for her to qualify for the HAMP.  Then the mediator asked for the loss mitigation specialist (who was on the phone - the company's lawyer was in the room with us) what her other options were.

He proceeded to say if the loan mod did not qualify her for any reason she could do a repayment plan, settlement, short sale, deed in lieu of...those were all options.

Then the LAWYER spoke up and said....and she can short sale re-fi.  I looked at the mediator, he looked at me, I said I had never heard of it...the mediator said he hadn't either.

The lawyer said...it's like a short sale, but you would actually be purchasing the home back for yourself.  I asked if this company does that and they said yes.

Wow, something new today!  One little piece of the story...she is on the mortgage and deed, but not on the note.  The mediator said that in that case it doesn't affect her credit.

She's going to put together the loan mod packet (again) while I look into this short sale re-finance.

Again, it was the LAWYER that said it...and I clearly asked if they do it and they replied YES.

Hope someone that knows about this or has done it can give us some input.

James Ward · Answer

This is news to me.  And it has really caught my attention.  Priscilla, could you give a little more details?  I would really like to understand this.

Thanks!

Scott Hubbard · Answer

It is called a Short-Refi and this is an option  only for those who have the wherewithal to get financing.  Generally, as a condition, to settle with the borrower, the new lender (lender B) will also require the borrower to come out of pocket for a downpayment since Lender A will want FMV.  Moreover, it is not unheard of for Lender A to require  contribution in order to settle.  And, if you have a second mortgage, you can pretty much guarantee zero success.

Getting a short-refi is not impossible, but it is less likely the a loan modification.

Tony Walker · Answer

Maybe the Lawyer can give some input,
can you contact him? Never know. :)

R Jenkins joshua · Answer

Please also give me more details 
          
          I have a property has you can see that I purchase incorrect thru hard money lender

Will Barnard · Answer

Why wouldn't the bank just offer to modify the loan then and at least get some more interest profits and loan fees to re-coup the loss?
I have never heard of this before, at least as far as a set program devised by the foreclosing bank.

Justin S. · Answer

Never heard of it.  Which lender was offering this and at what percentage of FMV?