Comments on: Why can't subprime borrowers refinance, and get another subprime loan to avoid foreclosure.? http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure Todays Foreclosure News & Info Fri, 26 Nov 2010 15:55:08 +0000 hourly 1 By: foreclosurefish_com http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2276 foreclosurefish_com Mon, 29 Jun 2009 10:24:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2276 Once they start missing payments, their credit drops even further. Their low income won't allow them to qualify for a loan with a higher payment, since it will eat up too much of the income. As more foreclosures occur, credit will dry up as banks raise their lending standards. Property values will also decline, and homeowners will not be able to pull out equity they do not have. A lot of lenders have also gone out of business now, mostly in the subprime market. Too many loans defaulted and no one wanted to buy any more loans to collect payments on. Although, who would want to spend $100,000 to buy a loan and then collect $2,000 on it before it went into foreclosure?<br><b>References : </b><br> Once they start missing payments, their credit drops even further. Their low income won't allow them to qualify for a loan with a higher payment, since it will eat up too much of the income.

As more foreclosures occur, credit will dry up as banks raise their lending standards. Property values will also decline, and homeowners will not be able to pull out equity they do not have.

A lot of lenders have also gone out of business now, mostly in the subprime market. Too many loans defaulted and no one wanted to buy any more loans to collect payments on. Although, who would want to spend $100,000 to buy a loan and then collect $2,000 on it before it went into foreclosure?
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]]> By: Tom http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2275 Tom Mon, 29 Jun 2009 09:38:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2275 Sub prime lenders usually do not refinance homes out of foreclosure. From sub prime you would have to find a hard money lender. Typically Hard money lenders will not lend you more that 65% of the appriased value including closing cost and you can expect to pay between 10-12% interest only. Hope this helps<br><b>References : </b><br>http://www.fhamortgageprograms.com/ Sub prime lenders usually do not refinance homes out of foreclosure. From sub prime you would have to find a hard money lender. Typically Hard money lenders will not lend you more that 65% of the appriased value including closing cost and you can expect to pay between 10-12% interest only. Hope this helps
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http://www.fhamortgageprograms.com/

]]> By: Lyn K http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2274 Lyn K Mon, 29 Jun 2009 09:19:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2274 That would be nice! Unfortunately, lenders have criteria which prevent them from taking on subprime loans which have gone into default from other subprime lenders. Sometimes, it is possible for one subprime lender to refinance another if their lending criteria permits this. Also, subprime loans usually have restricted LTV ratios (Loan To Value) ratios and when people default on payments and eat into their equity, their LTV increases and their options to refinance decrease as the costs in paying out the existing subrime loan and entering a new one would result in their LTV being way over the lender's criteria LTV limits for a subprime loan not in default! Hope this clarifies your question :)<br><b>References : </b><br> That would be nice!

Unfortunately, lenders have criteria which prevent them from taking on subprime loans which have gone into default from other subprime lenders.

Sometimes, it is possible for one subprime lender to refinance another if their lending criteria permits this.

Also, subprime loans usually have restricted LTV ratios (Loan To Value) ratios and when people default on payments and eat into their equity, their LTV increases and their options to refinance decrease as the costs in paying out the existing subrime loan and entering a new one would result in their LTV being way over the lender's criteria LTV limits for a subprime loan not in default!

Hope this clarifies your question :)
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]]> By: godged http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2273 godged Mon, 29 Jun 2009 08:50:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2273 They owe more than the home is worth, because they are behind they probably went from subprime to unloanable in credit score and if the lendees failed to meet their commitments once, who would want to let them try again?<br><b>References : </b><br>Oregon Realtor They owe more than the home is worth, because they are behind they probably went from subprime to unloanable in credit score and if the lendees failed to meet their commitments once, who would want to let them try again?
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Oregon Realtor

]]> By: Anthony http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2272 Anthony Mon, 29 Jun 2009 08:42:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2272 Lenders have not stopped making subprime loans, but they have tightened the guidelines to make it harder to get loans with minimal documentation as you could before. If you have equity and a history of paying your mortgage on time (100%), and you can verify your income (and it is enough to qualify for your payments), you may be able to refinance. If you got a sub prime loan and paid your mortgage on time for 12 months, your credit should have improved which would increase the likelihood of better terms. That is how sub prime financing was supposed to work - it got you in a property until you could get your credit or other issues straightened out to afford a conventional loan.<br><b>References : </b><br>http://www.atozlender.com Lenders have not stopped making subprime loans, but they have tightened the guidelines to make it harder to get loans with minimal documentation as you could before.

If you have equity and a history of paying your mortgage on time (100%), and you can verify your income (and it is enough to qualify for your payments), you may be able to refinance.

If you got a sub prime loan and paid your mortgage on time for 12 months, your credit should have improved which would increase the likelihood of better terms. That is how sub prime financing was supposed to work – it got you in a property until you could get your credit or other issues straightened out to afford a conventional loan.
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http://www.atozlender.com

]]> By: Gregorio http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2271 Gregorio Mon, 29 Jun 2009 08:16:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2271 The first answer is almost correct. Yes, they usually owe more than the property is worth but lenders have NOT stopped doing subprime loans. Subprime is anything below a 620 FICO. That's a HUGE section of the population. Estimates have it that 10% to 25% of subprime mortgages will end in foreclosure. Let's turn that around for a second. 75% to 90% will pay on time and wil not default. What do you think would happen if lenders stopped lending to that 75 to 90% that actually could afford their houses? If you want to see a real estate crash, just stop all subprime mortgages. The media has everyone using "buzz words" that they don't truly understand. FHA loans by defeninition are subprime, and they are not going anywhere. Fix the real problem. Overinflated home values, greedy lenders, (not the middle men, the large banks that fund these) and most of all the greedy want everything now borrowers.<br><b>References : </b><br> The first answer is almost correct. Yes, they usually owe more than the property is worth but lenders have NOT stopped doing subprime loans. Subprime is anything below a 620 FICO. That's a HUGE section of the population. Estimates have it that 10% to 25% of subprime mortgages will end in foreclosure. Let's turn that around for a second. 75% to 90% will pay on time and wil not default. What do you think would happen if lenders stopped lending to that 75 to 90% that actually could afford their houses? If you want to see a real estate crash, just stop all subprime mortgages.

The media has everyone using "buzz words" that they don't truly understand. FHA loans by defeninition are subprime, and they are not going anywhere. Fix the real problem. Overinflated home values, greedy lenders, (not the middle men, the large banks that fund these) and most of all the greedy want everything now borrowers.
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]]> By: Spock (rhp) http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2270 Spock (rhp) Mon, 29 Jun 2009 07:58:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2270 there is no lender willing to step up and lend the money. seems the lenders have discovered the reason subprime was invented -- poor credit for good reasons. With non-payment rates jumping, who wants more of what turned out to be a bad decision? *** worse, to the extent that subprime and no-documentation loans fueled buying by folk who otherwise wouldn't have bought at all, prices were bid up. This happened near everywhere in the booming sunbelt areas -- Sacramento, SoCal, Phoenix, Las Vegas, all over Florida. Without the continued buying pressure of similar folk getting risky loans to keep prices up, they are now falling. So if you were a lender and you KNEW the prices were falling and this borrower had bought near the top, had near nothing in the house, and couldn't make full payments at a reasonable risk-sdjusted interest rate [8 % ??], would you do a re-fi that takes some other lender off the hook??<br><b>References : </b><br>no way. You'd insist on 20% equity to conservative valuation and proven ability to make payments at 8% interest. most of the subprime borrows don't have either of these criteria. Most will lose the house. That isn't really terrible for them as most have near nothing in the house anyway. They just have to find another place to live while they repair their credit. It is called renting. there is no lender willing to step up and lend the money.

seems the lenders have discovered the reason subprime was invented — poor credit for good reasons. With non-payment rates jumping, who wants more of what turned out to be a bad decision?

***
worse, to the extent that subprime and no-documentation loans fueled buying by folk who otherwise wouldn't have bought at all, prices were bid up. This happened near everywhere in the booming sunbelt areas — Sacramento, SoCal, Phoenix, Las Vegas, all over Florida.

Without the continued buying pressure of similar folk getting risky loans to keep prices up, they are now falling.

So if you were a lender and you KNEW the prices were falling and this borrower had bought near the top, had near nothing in the house, and couldn't make full payments at a reasonable risk-sdjusted interest rate [8 % ??], would you do a re-fi that takes some other lender off the hook??
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no way. You'd insist on 20% equity to conservative valuation and proven ability to make payments at 8% interest.

most of the subprime borrows don't have either of these criteria. Most will lose the house. That isn't really terrible for them as most have near nothing in the house anyway. They just have to find another place to live while they repair their credit. It is called renting.

]]> By: spkmyer http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2269 spkmyer Mon, 29 Jun 2009 07:30:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2269 There are now stricter rules on subprime borrowers being approved, as well as what someone else already mentioned if you owe more then your house is worth you are SOL. If your in that situation one of the best things to do is talk with your mortgage company they may work with you. They don't want you to default that is bad for both parties.<br><b>References : </b><br> There are now stricter rules on subprime borrowers being approved, as well as what someone else already mentioned if you owe more then your house is worth you are SOL. If your in that situation one of the best things to do is talk with your mortgage company they may work with you. They don't want you to default that is bad for both parties.
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]]> By: Akbar B http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2268 Akbar B Mon, 29 Jun 2009 07:02:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2268 That's the reason why they are called subprime loans because they never get paid half the time. Would you throw away good money after bad?<br><b>References : </b><br> That's the reason why they are called subprime loans because they never get paid half the time. Would you throw away good money after bad?
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]]> By: koehlerdogtraining http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure/comment-page-1#comment-2267 koehlerdogtraining Mon, 29 Jun 2009 06:32:59 +0000 http://www.bestforeclosurenews.com/avoid-foreclosure/why-cant-subprime-borrowers-refinance-and-get-another-subprime-loan-to-avoid-foreclosure#comment-2267 Refinance against what equity? TA-<br><b>References : </b><br> Refinance against what equity?

TA-
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