SHORT SALES have ruined our country. SHORT REFINANCES could save our country.

Reblogger Kathleen Ann Pacheco-Corbett
Services for Real Estate Pros with (FIRST Exclusive Buyer's Office Providence-RI) RI BO5192

I totally agree with this lender to keep people in their homes, the answer is not short sales to foreclosure but short financing is a much better option.

Original content by Ann Sabbagh MLO 10920

Short refinances should be the norm.  They keep the homeowner in their home AND they reduce losses for the lender AND they improve the economy since home ownership stimulates economic growth.

A short refinance keeps the homeowner in their home, thus reducing the supply of homes on the market .  Short sales result in the homeowner losing their home; the loss of the American dream and creates economic disaster for everyone.

A short refinance entails the current lender or lenders forgiving debt based upon the current market value of the home.  The homeowner then refinances the remaining debt into a new mortgage.  For example, a home is currently appraised at $200,000.  The homeowner owes $275,000.  95% of the current value is $190,000.  The difference between $190,000 and $275,000 is $85,000.  The current lender(s) forgive the $85,000, enabling the homeowner to refinance the remaining $190,000 into a new mortgage.

As you can see, a short sale does the SAME action as a short refinance: a forgiveness of debt, BUT with a short sale, a stranger buys the home and the homeowner loses their home AND the supply of homes increases.  Lenders suffer larger losses, as well, with a short sale since they are typically sold for less than 95% of current value.  A short refinance keeps the homeowner in their home.

Now, we could take this one step further and SAVE the lenders their losses by doing the following along with a short refinance.  We could place a silent 2nd mortgage on the home after the refinance to allow the former lender(s) to salvage their loss upon any sale of the property in the future.  In this way, it is a win-win-win for both the homeowner, the lender and the economy.

So, I as I have been asking myself for years now, who came up with the SHORT SALE transaction idea and ignored the OBVIOUS benefits of the SHORT REFINANCE transaction?  Homeowners have been told to be late on their mortgages to obtain loan modifications, which have failed miserably.  The homeowner then becomes so far behind, even if they hear of a short refinance, it then is too late.  Short refinances are not discussed in the media and the lenders do not speak about short refinances.  WHY?  Short refinances are available and the BEST option for everyone's sake.

Is it too late for short refinances to now be the norm?  NO!  It is never too late, but no one is listening.  I have gone to our senator and approached other politicians.  They all love the idea, but no one has made it their platform.

I will keep promoting this until someone does listen AND enacts this better solution to KEEP HOMEOWNERS IN THEIR HOMES AND START TO BRING THIS ECONOMY BACK!

Ann Sabbagh, Vice-President

"The BEST compliment is a client referral: Thank YOUUU!"

Seacoast Mortgage Corporation

401-305-6906 or 508-243-1190

Residential & Commercial Financing

MLO10920

RIAR: teacher for "The Mortgage Course"; "Valuation of Commercial/Investment Real Estate"; "Reading Financial Statements"

 

"When you choose me as your mortgage consultant, you also choose a financial planner who cares about YOUR financial strength."

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the robot to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the lamp to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
1,351,350
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

I couldn't agree more the problem is greed, banks and congress could have solved the crisis altogether had they just been willing to do this simple thing.

October 11, 2011 09:07 PM #1
Rainmaker
184,784
Kathleen Ann Pacheco-Corbett
(FIRST Exclusive Buyer's Office Providence-RI) - Providence, RI
Realtor, RI-MA, CEBA, Master, e-Pro, ABR, ABRM, GR

Thanks Charles for stopping by. These short sales are horrible. I had a Continuing Ed class today in Newton Ma for my Ma renewal and the Attorney discussed the process and how the homeowner is affected by these as well as a foreclosure. He did not paint a pretty picture of them going away soon, either.

October 12, 2011 11:50 PM #2
Ambassador
326,620
Karen Hurst
STONEHURSTREALTY.COM - Warwick, RI
Rhode Island Waterfront!

Hi Kathleen,

 Thanks for reposting this. I had not seen it before! Ann has a lot of great ideas but, as she says, no one is listening!   Must be more money involved in  short sales than short refinances!

October 13, 2011 08:37 AM #3
Rainmaker
184,784
Kathleen Ann Pacheco-Corbett
(FIRST Exclusive Buyer's Office Providence-RI) - Providence, RI
Realtor, RI-MA, CEBA, Master, e-Pro, ABR, ABRM, GR

It is always the money, that greed is what put the real estate in this dismal state. I thought I would see you at Rhodes, I looked for you. It was well worth attending.

October 13, 2011 04:33 PM #4
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the printer to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainmaker
184,784

Kathleen Ann Pacheco-Corbett

Realtor, RI-MA, CEBA, Master, e-Pro, ABR, ABRM, GR
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the printer to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information