refi -bad credit ?

Living in NC.

Is there any company that offers Refi loans or equity loans on Homes that are preforeclosure, no court date set yet?

For example, my credit score , perhaps 500. Foreclosure process started w/ NOD.

Home payoff is $175,000

Value somewhere around $210-215K

I put down $20K on the home when I close on it 1 yr ago.

Would like to pull out some cash, refi and keep the home.

Versus selling it.

any help appreciated.

How far behind on the payments are you? My question is how did you get so behind on payments? If you could not afford current payment how will you afford a new payment with a higher rate at a higher loan amount? With a score of 500 you could possibly get a rate term done and save the house, but I don’t think you will find alender that will go above 80-85% LTV. You are currently at 81% LTV.

Well. since I personally put up $20k in cash on this , it reduced things considerably.

I arranged a workout plan with them, send in the deposit for that in Feb. Approximately only 3 payments behind at that point. payment went from $1455 to $1750 after workout agreement. March, april I sent the NEW… higher monthly payment, for the workout, however noticed that they did not apply both of the payments to the account. Seems they held it until almost time for another payment. I researched the company and found similar complaints. At that point I decided to try to refinance. The balance shows the same.

Problem is, they had it as “in process” foreclosure on credit, although they stopped when the workout was prepared and paid. Now when I talk to them they want to go up on the payment again, because they feel they have that right.

I have not been served with a new notice of default and i work where i bring in approx $4500-5500 per month. My wife brings in an additional $3600 with her income. We have 2 cars we make payments on.

We got behind due to health issues and a major death in the family, requiring serious funding. We sent in docs proving income, hardship, and itemized our bills, and they said" hey you can afford an additional, 800-1000 per months, so lets see" then came the poop.

What I am looking for is someone that can do this loan, and in turn allow us to use some of the equity in the home to pay down some balances etc.

If push comes to shove, i can simply sell my home, im thinking, prior to losing it back to the bank.

It is in a new development , in which the Appreciation was just rated at 13% increase over last yr. There arent too many foreclosures on the comps, and homes in the area are selling around my suspected value, without my upgrades.

I have had nice offers already, but of course would like to stay in my home, that I built from the ground up last yr.

Thanks for responding and your input.

ok … good example and perfect timing.

Today in the mail I get a dispute letter and follow up from Equifax about the balance owed, and history of this loan.

They claim they verified the loan and pay history was updated.

Problem, the last payment date shows 10/06, shows monthly amount $1455 for the mortgage (only a 1st… no 1st/2nd), and verified items where updated as of 4/07.

Ok, what happen to that $3250 of payment made and why isnt it showing correctly.

The company is HOMECOMINGS!!

How far behind on the payments are you? My question is how did you get so behind on payments? If you could not afford current payment how will you afford a new payment with a higher rate at a higher loan amount?

Great point, Christopher! That is why there is such a high default rate on mortgages. People think that refinancing solves all their problems. It can be a temporary fix at best.

And I honestly feel, this response is the reason people give up hope, because they are critiqued for errors and hardships and are told there is no way out, when there are avenues.

If you read the entire situation, as well as the payment that was being paid, the workout payment, as well as the ability of paying almost $1000 more per month over the existing mortgage, why would a refi of a property appraised for over $40,000 in equity, merit a higher than the $1000 cushion?

And for the record, there are high default rates, because(some) brokers, agents, and lenders, are so concerned about making the sale and completing a deal, and care less about whether it defaults in a yr or so, so they sell a higher priced house under the umbrella of saying, " I know the rate is high, and the payment, but in a yr or so, you can refinance your loan, and pull out the positive equity and get a lower payment" Then the person says… ok, and gets in a situation and needs a bailout or has to sell their home. Worse case scenario, they foreclose.

That provides another reason as to why there are audits, and companies sanctioned, agents, brokers, banned, fined , and penalized with the Real Estate Commission.

and as you stated… “at best” it can be a temporary fix, referring to refinance,

The key word some people look for when they are in a problem situation is “FIX”

Rubbing in where ppl go wrong, doesnt “FIX”, it simply continues to contribute to the callous and adds to the problem, yet doesnt remove it, nor help their situation.


I did not mean to offend you with my questions. I was only asking because underwriters are going to ask the same questions. The days of non-prime lenders giving away money are gone. Honestly what it is going to look like to a lender is that you are losing your home at this point and not getting anything out of it before it goes. So you will refinance, pull cash-out and then default on the loan because if you could not afford it before you will not be able to afford it now. I am not suggesting that is your plan, but that is certainly how it could be perceived.

Now on to your issue. The reason that your full payments are not being applied is because the lender holds partial payments until you have enough for a full payment. They also subtract out late fees while you are making your catch-up payments. So it will take you a couple of months to get caught up. This is common among mortgage lenders for protection against people making partial payments for years and never reaching the magic 90 day late in which the mortgage acceleration kicks in.

Also, as I said in my original posting your credit score is low, and your current LTV is around 80%. I don’t know of any lender that will allow you to go above 85% with a 500 FICO, and after you roll in closing costs you will be at or near 85%. So getting cash-out is not very likely. You might however be able to save your home by utilizing a rate term refinance. Keep in mind though your payment is going to go up not down.

I would suggest that you finish out your payment plan. The payment is only $350 higher than your current payment, and you have already made a couple of payments. I would beg, borrow, or ebay a way to get that payment caught up. You said your current lender is Homecomings. Knowing what I know about them I would guess that you have a decent rate on your current home loan. Refinancing at this point is going to put you with a non-prime lender and the rate is going to be flat out ugly especially if you go with a 30 year fixed. Which you almost certainly have to do because if you go with a ARM and have more credit issues you will be in this same boat two years from now.

Thanks Christopher,

Not offended, that was a reply for the other person.

Found out today that my median credit score is 560.

As to partial payments, the $$ sent was for the workout payment amount. So if workout was $1750, that should have been applied I thought.

Am i to assume, that if they are showing that I owe $8, although I sent them $3250 in payments, since process was started, that , if I pay the $4,750, that catches me up?

Or what kind of company is HC? When I called their attorney, got a repayment voice message, no person yet, will keep trying.

Thanks for insight.

From what I know of homecomings, they are a decent company; I had to deal with them about some issues a few years ago and though it took a few phone calls, it was eventually handled to my satisfaction. I agree with christopher that cash out is unlikely and that your best bet may well be to stay with your current mortgage company and get caught up. It will cost you more to refi by the time you count closing costs, appraisal and the new payment and rate that you’re going to get. You would be much better served by making up the payments and getting back on track with Homecomings.

Exactly. Other than the confusion, found out today. House is not in Foreclosure.

And their attorney requested they reset the workout.

So disregard previous.

Still curious about the equity and how to pull out some cash.

I would contact a broker, have them pull your credit and look at your options. The increase in credit score was a big plus for you. It allowed you to go from an 80% LTV to a 90% LTV. With a 560 FICO your options change considererably. Your rate is still going to go up, but as you said you can off-set that rate increase by paying off other non-preferred debt at a much higher rate. For example I have a customer who is cashing out of his home about 50K. His rate is going up 1.25% which increase his payment $500 per month, but the combined debt that we are paying off is equal to a $1500 per month savings.