Rosetta,  in Walnut Creek, CA

Has anyone done a "SHORT REFI ? '" not a short salef or a new buyer, but a short refi keeping the exsisitng owner in the property?

Asked by Rosetta, Walnut Creek, CA Mon Jan 25, 2010

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13
MODUS Real E…, Agent, Denver, CO
Tue Jan 26, 2010
BEST ANSWER
I have done a couple of these here in Colorado and they were all with Beneficial which is owned by HSBC. The borrowers appraisal came up short and they did not have the cash to cover the difference. The borrower wrote a letter pleading their case to the lender, we sent an estimated HUD, and HSBC did their own BPO.

The lender agreed to take less on the payoff than was owed which got the refinance done. This is huge for the borrowers in that they were able to take advantage of todays low rates and shaved principal off their loan balance. The downside is it reflects on credit as "paid in less than full" which is not doing any favors for the credit score and the borrower was issued a 1099 for the portion of the balance which was shorted. That can be considerable income tax to pay on "ghost income".

Helping someone shave $100k off their mortgage is great, but you really need to consider if they will be able to handle the taxes that need to be paid on it as well. Another item to consider is that most lenders will not write loans on these types of refinances since they know they are dealing with a borrower that is willing to walk away from even a portion of an obligation.

Hope that info helps.
2 votes
Lisa Parin, , Pleasanton, CA
Thu Oct 28, 2010
R. Monge
Oakland, CA
Submitted: 10/27/2010
My name is Rick Monge, I am an investigator with the Alameda County District Attorney's Office. My office has received several complaints about OF Lending.

I would like to speak with individuals who have had positive or negative experiences with this company, Mr. William Hogarty or Mr. Jim Rivera.

I can be reached at: 510-639-0984, or you may email me at: rick.monge@acgov.org.
0 votes
Lisa Parin, , Pleasanton, CA
Wed Oct 20, 2010
Just thought I'd give an update on William Hogarty and OF Lending.....

The DRE has filed a complaint against both William Hogarty personally and against his company, OF Lending, and is seeking to revoke both licenses because of his "short refinance" and loan modification programs. You'll want to read this before you consider paying him or his company to do any sort of work for you, including his newest credit repair program http://(www.newcreditrx.com). You should also contact me if you have already paid his company for loan modification or short pay services, even if you got a partial refund. My email address is lisa@lisaparin.com. I have told Mr. Hogarty directly that I would stop posting on blogs if he would tell the truth and refund all the money he has taken. Unfortunately he doesn't want to do either so here I am.

Here's what the DRE complaint says:

- Failed to properly deposit customers' trust funds into a nuetral bank account. He took hundreds of thousands of dollars in for his modification and short pay scams and was to have deposited 75% of what he received into a trust account. Well, he didn't. He did pay for his mansion, yacht and even bought a brand new car though.

- Gave an unlicensed person access to "trust" funds. Funds that weren't there.

- Accepted advance fees for loan modification services when it was unlawful to do so.

- Failed to provide trust accounting records as required to those clients that were supposed to have funds held in his trust account.

- Failed to properly disclose fees to his borrower.

- Didn't properly supervise his agents.


Many people are trying to get their money back, but he ultimately gives only a partical refund. Please contact me if you have paid this man or company for short pay refinance or loan modification services. I need to refer you to the appropriate people.
0 votes
Lisa Parin, , Pleasanton, CA
Wed Oct 6, 2010
In my opinion, you should definitely do your homework before signing up for a short pay. I won't go into too much detail on here, but in my opinion you should definitely call the California Department of Real Estate and inquire if there has been any action action taken against the company that is on here claiming to have done hundreds of them. You can also look up their license on the DRE's web site for more information.
0 votes
Charles Dail…, Mortgage Broker Or Lender, St Paul, MN
Sat Jul 10, 2010
Great answer by Charles Moore here so I won't add much other than I've done 3 with First Franklin so I know they'll do them. Mainly, I thought it might be helpful to provide a web reference to the FHA guidelines on these. Not all lenders adopted the "short refi" FHA mortgagee letter in it's purest form but any broker or correspondent lender working with Flagstar or Wells Fargo can do them. There are probably more but I know those two will do them.

Charles' comments on the potential IRS liens are important. They don't always happen but they can be serious. Further information on the potential for liens after a short refi or short sale can be found here: http://www.trulia.com/blog/charlesdailey/2010/05/buying_a_ho…

A broader list of options when upside down on your mortgage can be found here: http://www.trulia.com/blog/charlesdailey/2010/04/upside_down…

See the web reference below for specific lending guidelines on short refi's.
0 votes
Lisa Parin, , Pleasanton, CA
Fri Jul 9, 2010
I should say that I no longer market short pays to my clients, but I do have previous experience "selling" short pay refinances. My knowledge has to do with my experience working for a company that is listed on here. Just know I'm not posting to try to get new short pay business. I no longer believe in the process based on what I saw.
0 votes
Lisa Parin, , Pleasanton, CA
Fri Jul 9, 2010
I know the short pay refi world very well. Email me directly if you want information about how they are done and the real record of the company on here claiming to have done hundreds.
0 votes
Gilbert Rich…, , Santa Clara County, CA
Tue May 4, 2010
I have heard of them, but have not done one yet.
0 votes
Hannah Flieg…, Agent, Larkspur, CA
Tue Jan 26, 2010
Hi Rosetta,

Good luck! I hear companies say they have and can do them...but yet to see truthful results.
0 votes
Roswell Moore…, Mortgage Broker Or Lender, Scottsdale, AZ
Mon Jan 25, 2010
Jason - you've done hundreds of these as an agent?.
0 votes
Brian LeBars, Mortgage Broker Or Lender, Pleasanton, CA
Mon Jan 25, 2010
Linda is correct. The HARP refi sounds like the program providing the loan is hela by Fannie or Freddie. The max loan to value on the first is 125%. Feel fre to call me if you have any interest.

Brian
0 votes
Michelle Pre…, , Walnut Creek, CA
Mon Jan 25, 2010
My understanding is that this is the same as a loan mod. Depending on the bank, some are better than others. Some banks are reducing principle, interest and extending terms of the loan for homeowners (i.e., Wachovia). Others are going a more traditional route and may not help the homeowner that much. Best to talk to the homeowner's bank(s) and find out their particular situation.
0 votes
Linda Ginex, Agent, Newport Beach, CA
Mon Jan 25, 2010
Hmmm....are you referring to the HAMP program?
0 votes
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