NEED HELP ON REFI WITH NO SEASONING

We brought a foreclosure and rehabbed it in 1 month doing major renovations. We brought it for 65K and the HML held in escrow 20K for repairs. My deed of trust says 80K. It is now worth about 135K. I am having issues refinancing out of the HML loan. I am also having the worst nightmare with the HML. We are 99% finished with this project (carpet goes in today) and the HML has not paid us one draw (oh they didn’t like the caulking on the beam or they can’t pay me for draw 2 or 3 eventhough there were no issues due to the fact, draw 1 had something they don’t like, or after getting into the project the window company advised that they could replace the panes in the already new vinyl window that the previous owner had put in, cheaper than replacing the entire window, the HML stated they will only pay $500 on a $1500 reciept as I didn’t replace the window, we repaired it and on and on and on). In order to keep this project going and to prevent them from strangle holding us, I have funded it out of pocket. Bottom line, we need a refi option, with no seasoning, FICO score 637. No delinquents or late pays (although that might not hold up if I don’t find a refi option fast as this private lender HML is driving me into bankruptcy!) I have been told I appear debt heavy due to the fact, that I own other investment properties. I scratch my head at this as I know there are investors out there with more than 4 properties(all with positive cash flow) which I currently own (not including my primary residence) and they keep getting loans. I make $74K a year. Looking for 80% LTV. I have four months to get this refi or they take the house. Oh, did I mention that they make you sign a deed of foreclosure up front?!?!?! Truly, I see now there is a method to their maddness. Can anyone help with refi options or advice to get from under them and my life savings back? Please help! :help

Well, you will not qualify for a wholesale conventional cash out refinance. Possibly a just a refi of the existing $80k though. You may also want to consider local banks. What city/state do you live in?

Worse case would be that you need to refi with another HML that gives you 1-2 years (cash out possible) or list for sale priced to sell quick.

gg.

Sorry to hear about your troubles with the HML. The no seasoning cash-out is still available, but the cost would be astronomical with a 637; however it might not take much work to get your score to jump a few points. I would suggest taking a look at the credit score while you are working on the loan itself. Do not wait any longer to get started with the refinance. If you wait for your score to come up you could run into problems during UW and then the HML will come and take the house. Hope this helps.

gg - I am sorry you are going through this. It seems you still have a good deal in your hands. Sell the house for less than it is worth ($110 or $120k), pay the HML and put the difference in your pocket. You will not make as much money as you originally planned, but at least you will come out ahead. If the house is 99% complete you shouldn’t have a problem doing this.

I wish you luck!

I am in Virginia. I don’t think waiting for the credit score to jump is a good idea either. I will still have the debt to income ratio issue. I will try to sell but in this market, that is risky. I have check into other commercial loans, 12 month term with cash out but it is interest only at 12% and 6% fee to get it. Just was checking all my options before I decide. I think it was a good deal as well. Just got tangled up with a real bummer for a lender. Anything else anyone can suggest, I would be grateful.

gg - I don’t have any other suggestion to offer. However I wanted to leave you with a word of encouragement. You are probably in good shape as it seems that after all is said and done you will still be able to make money from this deal. Keep your eyes on the ball - don’t let this experience demotivate you.

Keep us posted. Have a good evening!

gg228, Why is it too risky to sell it? Put it up for sale while you’re trying to get the financing straightened out. You only need ONE buyer for the house. How do you know you won’t sell the house until you try. Don’t put results before effort. Good luck.