Part II of this article series examines the pedigree of a true “short sale specialist” and highlights the many tedious aspects of qualifying a negative-equity homeowner for a short payoff with his mortgage lender.
Part I of this article series details the process of qualifying a negative-equity homeowner for a short payoff, setting the sales price at the broker price opinion (BPO) and submitting a purchase agreement to the lender for appraisal and closing conditions, with a brief discussion of tax aspects of a shortsale and alternatives.
This article studies the loan-to-value (LTV) ratio of 162% as the median point where negative equity homeowners exercise their implicit put option and force their lender to take their underwater property.
This article studies the loan-to-value (LTV) ratio of 162% as the median point where negative equity homeowners exercise their implicit put option and force their lender to take their underwater property.
Whether financing residences, second homes or investment properties, homeowners with million-dollar mortgages are defaulting on their loans at a rate greatly exceeding that of the rest of society. One in seven million-dollar mortgages (14%) are in serious delinquency; by comparison, only one in 12 for mortgages below the million dollar mark (8.3%) are seriously delinquent. [...]
In mid-2006, cash-out refinancing in the nation reached a peak 88% of all refinance activity according to Freddie Mac’s quarterly refinancing data. The nation’s homeowners who refinanced their mortgage and pulled cash out of their equity increased their debt-load by at least 5%. This practice of homeowners pulling cash out of their equity while retaining [...]
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