Friday, August 28, 2009

Shuster & Saben, LLC announces Short Re-Fi representation with NO ADVANCE FEES

Shuster & Saben, LLC announces Short Re-Fi homeowner representation with no upfront fees.
For Immediate Release: The law firm of Shuster & Saben, LLC announces its availability to represent homeowners with negative equity in Short Re-Fi transactions with no upfront fees. Homeowners pay nothing to get started and incur no fees or costs unless their loan balance is reduced by at least $20,000.00. Frequently Asked Questions about this program follow:

Q: What is a short re-fi?
A: A short re-fi or short payoff refinance is when current lender accepts less than the amount of the loan balance in full and final settlement of the mortgage debt and a new mortgage is issued in the name of the entity providing the source of the funds used to payoff the original mortgage.

Q: What is an example of a short re-fi?
A: The homeowner, Bob Upsidedown bought his home in 2006 for $200,000 and put nothing down at the time of purchase. Mr. Upsidedown had a $200,000 loan with Countrywide that was acquired by Bank of America (BOA). The current value of Bob’s home is $100,000. Due to the recession Bob’s income went from $4,000 a month to $3,000 per month and he was unable to continue to pay his mortgage for the past four months. After reviewing Bob’s employment history and finances Short-Re-Fi investor determines that Bob is a good credit risk. Short Re-Fi investor then contacts Bank of America and offers $75,000 to purchase the mortgage and note on Bob’s property. Bank of America, then evaluates whether it is in their financial interest to accept the offer. If Bank of America’s alternative is a lengthy, protracted foreclosure case against a homeowner represented by an attorney, it might prefer to sell the note rather then spending 12 to 30 months fighting a foreclosure case. Bank of America will also realize that if they were able to win their case and obtain the home, they would have to pay property taxes, mow the lawn, keep the lights on, maintain the property and pay real estate commissions in order to sell the property for an unknown price after unknown delays. In this context the lender may prefer to close their file quickly, receive immediate cash from the investor and take a toxic asset or non-performing loan off their books.

After purchasing the mortgage from BOA, the investor would then record a satisfaction of mortgage, on the original mortgage in exchange for the execution of a new mortgage for an amount agreed to with the homeowner before the note was purchased. Bob Upsidedown’s new mortgage would likely have a loan balance of $90,000 to $95,000 and an interest rate around 7.5%. The investor benefits because they spent $75,000 but are earning interest on $90k to $95k and will receive the full loan balance when the loan is repaid or later refinanced at a lower interest rate. The homeowner benefits because they now have equity in their house and are paying interest on a much small loan balance. Many homeowners see a 30% to 50% reduction in their monthly mortgage expense.

Q: Does Shuster & Saben, LLC provide funding for Short Re-Fi.
A: NO. Shuster & Saben, LLC is a law firm that represents the homeowner in the Short Re-Fi transaction. Our role is to collect information from the homeowner, submit pre-qualification forms to one or more short re-fi companies, and to negotiate with the short re-fi company to obtain the lowest possible loan balance and interest rate for the homeowner.

Q: My credit rating has been damaged by late payments on my mortgage can I still qualify.
A: The Short Re-Fi companies we work with are most concerned about stability of employment and income then credit rating. The short re-fi companies must be confident that the homeowner will be able to make their mortgage payment if the loan balance is reduced to an amount that is less than or equal to the current value of the home. Excellent credit is not required. Candidates with excellent employment history ( 3 years in their current job ) and below average credit will often qualify.

Q: Will the Short Re-Fi company change me an upfront fee?
A: NO. We believe that homeowners contemplating a Short Re-Fi should only incur costs if they actually receive a short re-fi that substantially lowers their loan balance. The Short Re-Fi companies we work with either do not charge upfront fees or have agreed to waive such fees for our clients.

Q: Will ownership of my home change?
A: No. The homeowner never loses ownership of their home. There will be a real estate closing similar to that in a conventional refinance transaction but the homeowner will not transfer ownership of their home.

Q: How does Shuster & Saben get paid?
A: Our firm gets paid only if the Short Re-Fi transaction is completed. Our fee is the greater of $3,000.00 and 10% of the homeowners savings. For instance if the homeowner had a $150,000 loan balance before the Short Re-Fi and a $100,000 balance after Short Re-Fi, our fee would be $5,000.00.

Q: What if I do not have sufficient cash to pay a fee of 10% of the savings?
A: If many cases a substantial portion of the legal fees can be rolled into the new mortgage. Our firm also accepts credit cards.

Q: How complex is the pre-qualification process?
A: The pre-qualification from used by one of the companies we work with is only 1 page long. After receiving the form the re-fi company will have a 15 to 30 minute phone conference with the homeowner to obtain additional information.

Q: How long does the qualification process take?
A: We expect that the re-fi company will make a determination of whether the homeowner is a good risk within two (2) to three (3) weeks.

Q: If I qualify does this mean I will get a short re-fi.
A: Perhaps. In order for a short re-fi to take place three things must happen. First the short re-fi company must approve the homeowner. Second the lender must be willing to sell the mortgage and note for less than the current value of the home, and Third, the Short Re-Fi company and the homeowner must agree to reasonable terms for the new mortgage.

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