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Landlord Guide Refinance Foreclosure
Depending on current market interest rates, operative lending practices, and your credit rating, you may be able to obtain an entirely new mortgage loan on your home with which to pay off your existing mortgage loan that is delinquent and in danger of default. To refinance your home, a minimum equity is generally required; and you should accomplish this objective before an NOD is recorded.
In 2008, the federal government enacted new laws that make it easier for homeowners to refinance their existing mortgage loans with a new FHA insured loan or a loan that meets the requirements of FNMA or FHLMC. These programs offer government insurance or other forms of government support to lenders who cooperate with homeowners in financial distress.
Through these programs, your lender or its servicing agent refinances your loan based on the current market value of your home. Therefore, your new mortgage loan and monthly loan payments will likely be reduced. In exchange, your lender may receive FHA insurance for your new mortgage loan at its new amount. Some of these programs include the requirement to pay to the government a portion of any future increase in value of your home to assist in accomplishing the objective of either reducing or recouping losses the government may incur to help homeowners save their homes.
Your new more affordable mortgage loan (whether government insured or purchased) will pay off in full your existing troubled mortgage loan. In a time of decreasing home values, this can be an excellent benefit for homeowners. Your lender loses money on the original mortgage loan, but the loss is often less than the lender would suffer by continuing through the foreclosure process.
Refinance Quick Tips
To explore the possibilities of refinancing, you can use the services of a licensed real estate broker acting as a mortgage broker (who is an authorized FHA loan correspondent) familiar with current lending practices, especially FHA insured loans or loans that meet the standards for sale to and purchase by FNMA and FHLMC. Begin by contacting a mortgage broker who is an approved FHA loan correspondent authorized to deliver loans to lenders that are approved seller/servicers for either FNMA or FHLMC. Or, you may contact the lender directly.
This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Landlords and Rental Property Owners Guide to Refinancing Your Home in Foreclosure is brought to you by SimplifyEm Pay Rent Online and Property Management SoftwareYou might also want to read:
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