[Nomarac]

Anyone have experience with achieving principal reductions for homeowners?

[877YouKeep]

also know as Recast, is taking a lump sum payment and putting down on an existing loan. The loan is reamortized with the rate staying the same and payments are reduced. The program is available on fixed rate mortgage programs only. There are no closing cost. A loan has to have a recast feature.

[Nomarac]

A firm I am competing with to earn a mortgage brokers's referral business from is achieving principal reductions for clients. Not recast.... they are getting the lender or servicer to reduce the principal. I was skeptical but the broker I am trying to court away from the competing firm has already had several successful referral clients for which a principal reduction was successfully negotiated by this firm. In order to get him to go with my firm exclusively I need to be able to offer this service as well.

Anyone on this forum have experience with this?

[877YouKeep]

Are you dealing with large chunks of money put down on a mortgage? Are you sure you are asking the correct question. There are specific types of mortgages that offer the program and they are simple.

[Nomarac]

This firm is negotiating the loan balance down on behalf of homeowners. I would be skeptical except that a mortgage broker friend of mine has referred clients to them and they have successfully achieved a principle reduction for the homeowners and then my friend was able to do a refinance for the homeowner.

It isn't a loan mod or anything like that. It is a temporary balance reduction for payoff by a certain date. ( I have actually done it myself in the past.) Just wondering if anyone else is doing them now and what their recent experience has been.

[877YouKeep]

Great question and I will follow up tomorrow with answers from lenders. The reason I am not familiar is we work with homeowners to stop foreclosure and not brokers. Again, I will follow up.

[877YouKeep]

The actuality is that the principal is not reduced, the past due interest is written off and the rate is dropped to a manageable payment for homeowners.

So for instance you have a payment of $1,800.00 and you are 10 months past due, not including attorney fees and possible escrow advances a homeowner is now $18,000.00 past due. We can write off the past due balance and drop the rate on a loan modification or refinance. We have actually done about 6 this month. This is not guaranteed at this point it is all lender specific and it seems that most are done on asset loans.

[FosterCA]

This is the kind of stuff we can really learn from. Many thanks to NOMARAC and 877YouKeep.