What Happened to the Short Pay Re-Fi?

Don’t you just hate when companies (especially banks) announce a new product that will debut sometime in the far off future? Chevrolet did that a few years ago with the Volt electric car. They had a big splashy ad campaign about 3 years ago spotlighting this new car. Honestly, if  Chevy would have had any foresight about gas prices rising, then their stock value might be going up as well, as they would have been releasing the car three years ago instead of next month when it will finally hit the highways.

As if distressed homeowners didn’t have enough to contend with, we recently found out from a high level VP at B of A that the short pay re-fi won’t be happening for a while (if ever). Some B of A execs mentioned back in March that homeowners would be able to take advantage of the B of A short pay re-fi in mid-late September. Well, in September we asked, what happened to the short pay re-fi? Our contact said that the product was still under consideration due to “liability issues”.

We think that those liability issues might be the same or similar ones involving the loan mods as well. What banks would find investors who would agree to chop the principal and lower the rate? Apparently not many. Bank of America no, Wells Fargo said that they would not be doing them either.

Most of the short pay re-fi that we hear about would be classified as scams, with only a small percentage of legit ones occurring. Now only if we can get that Volt from the marketing pages into our garage.

Photo by Steve Jurvetson

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2 Comments

Filed under Loan Modifications, Mortgages

2 responses to “What Happened to the Short Pay Re-Fi?

  1. Nette

    I havent heard anything more on bofa accepting the fha short pay off, has anyone else? I was told that its a constant topic in meetings but no resolution yet. I have a perfect candidate for the loan who was originally a countrywide customer and now serviced by bofa. I go in circles with their departments. Im guessing they will not ever approve short pay off to be done through alternate lender but I was told that they might start considering bofa to bofa short pay refi as long as borrower fits all criteria. Does anyone have any new information or suggestions? Thank u

    • ladyrock

      Unfortunately, our contacts at B of A said that they are still evaluating the short pay re-fi but that they find too many inherent risks in the program. There may be some other programs that may benefit you but it depends on your income, value of your house, what state you live in, etc. Feel free to contact us with more details and we can see if we can help find a solution to your situation.

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