CNBC is talking about a short pay refi as we speak right now. They are talking with a homeowner who is on a 5 year fixed, and then adjustable rate. He put twenty percent down within the last two years and is still upside down on his loan.
His lender quoted him that it could hurt his credit by 150 points. His lender should not talk with him about how much it will hurt or not hurt his credit, as each person is affected differently, depending on each individual factor on his account.
This consumer could be hurt on his credit score as well as be asked by his lender to pay a promissory note for the deficiency balance, thereby possibly ending up with two loans owing for his home that he will have to pay.
CNBC
If you are considering a Short Pay Refi, educate yourself. About the Author: The above info regarding Greenwood IN was provided by: Heather Fitzgerald, who has over 15 years of experience in real estate, title insurance, and lending that can be put to work for you. Heather can be reached by phone at 317-885-8858. Thinking of selling your home or buing your next home? We can help you with this. I service the following areas: Greenwood IN, Indianapolis IN, Franklin IN, Whiteland IN, Mooresville IN, Martinsville IN, Avon IN, Carmel IN, Westfield IN and surrounding areas. Check more properties at no obligation: http://www.SmithFitgeraldTeam.com Copyright © 2009 By Heather Fitzgerald-Greenwood IN Real Estate----Short Pay Refi-All Rights Reserved. 
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Amazing how 20% down got eaten up in 2 years ?? I told Jeff to buy me a bank for my Birthday!!
Great info Heather
Sincerely,
Grace
It is scary what is going on for homeowners across the nation. I hope our nation gets back on track soon.
Hi Heather,
Good News is on the horizon for some if they are making the payments however just can't refinance because of they can't get the appraisal. Bank Of America called one of my clients unsolicited that had a Pay Option Loan( pick-a-pay loan or Libor Loan) to remove the negative aspect of the loan and to give them a fixed rate under 5% for a Jumbo Loan! The loan was restructured as an Interest Only Loan for 10 years.
Bank of America restructured the loan as an interest only loan for 10 years?
Did it put the payment to an affordable rate for them, where they could put the extra towards principals so they don't end up more updside down?
So many people here in the valley are so far upside down that sometimes it doesn't even matter. The sense of hopelessness runs pretty doggone deep here!
I just heard about this for the first time on Wednesday and I'm taking a class on it this Wednesday and really look forward to it as it really should help my clients.
I just heard about this today. Still not clear about how it really works.