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Short Pay-off and Refinance  

THIS IS NOT A LOAN MODIFICATION OFFER OR A FORECLOSURE PREVENTIION PROGRAM

This is a special program reserved for well-qualified underwater (negative equity) NON-FHA  insured homeowners who are current with their mortgage payments, who want to refinance their principal residence, and who can fully document their income, assets, and employment. In addition to being underwater, the homeowner must prove some form of hardship.

Refinance: A special FHA provision allows homeowners who have secured a principal reduction of at least ten percent (10%), and who qualify to refinance their loan with another lender into a 30-year fixed mortgage at current market rates. The maximum loan-to-value is 97.75% of the appraised value. The new lender is fully aware of the short pay-off negotiation at the time when he approves the new mortgage. We co-ordinate the refinancing, but we do NOT originate mortgages!

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

Short Pay-off: Simply stated, a short pay-off is a principal reduction  that is achieved through negotiation with the borrower's lender(s) who agree to accept a lesser amount than what is owed. The reduction is permanent and the homeowner will not be taxed on that amount if the reduction is granted through year 2012. (refer to the IRS, under principal forgiveness).

Principal reduction negotiation: A third party , P2 Capital Funding Group, is hired by the homeowner to conduct the negotiation. (Refer to the Short Pay-off Process). A current appraisal, the same the new lender uses, serves as the basis for valuation purposes.

Credit score implications: The homeowner's credit scores may be negatively impacted. The mention "settled for less than owed" may appear, however, the balance owed will be zero. This happens after the new loan has closed.

Reminder:  CONTINUE TO PAY YOUR MORTGAGE(S) TO YOUR LENDER(S)!

To be eligible, the following conditions must be met:

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

2. You MUST be current with your mortgage payments for the last 12 consecutive months.  Permanent HAMP loans qualify for short pay-off refinancing.

3. The property must be your principal residence

4. You must be able to fully document your income for the prior two (2) years and Year-To-Date

5. You have to maintain a middle credit score of 640 or higher.

6. You must provide some proof of hardship, such as a decline in earnings, or an excessive debt-to-income ratio, etc.

Steps:

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

2. A short pay-off Consultant negotiates the short pay-off settlement with the homeowner's lender(s).  The following is included in the offer.

3. When the new loan funds, the old lender is paid by the new lender. The Consultant's fee which is separate from fees related to the refinancing transaction proper is paid by the homeowner according to the terms of the negotiation contract.

A short pay-off negotiation and refinance is the best option left for homeowners who are current with their payments but are unable to refinance due to the loss of equity in their homes.

Apply: www.p2funding.com/apply.html