January 24th, 2009 8:56 PM by Sam Kader
Piggyback mortgage was very popular in the real estate boom era to obtain 100% financing without paying mortgage insurance. The loan would be structured as 80/20 first and second mortgage respectively. The current market situations is conducive for refinancing provided if homeowners can provide 2 years solid employment history, 720 FICO score and at least 20% equity on the house. In general, most homeowners fail either one of the acid-test requirements. Compounded with lenders' tightening their underwriting guidelines, refinancing could be a challenge. This is an era of hope over fear.
Here are some tips on overcoming Refinancing Challenge:
Hope for Homeowners program which allows the Federal Housing Administration to insure a new mortgage IF the lender VOLUNTARILY writes down the mortgage principal to 90% of the new value of the home. The requirements are that the notes must have reset and that homeowners on the brink of foreclosure.
Homeowners could also apply for Loan Modification.
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