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jasummers76

Looking too refince ran into a issue.

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Hello,

 

I tried to do a FHA refi on a first mortgage that has never been late and a second with no payments in many many years.

 

Well the FHA now requires all mortgages on the property too have a on time 12 month history.

 

I am already in the process of my attorney working on a modification of the second defaulted loan.

 

But we want too have a back up. Any ideas of other refi loans that this wouldn't be a issue with?

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How much is the 2nd? 

 

Yes, it is relevant.

 

How much of the original mortgage has been paid down and over what period of time? 

 

Again, yes, it is relevant.

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The second defaulted is 55k the first has a 117k payoff paid on for 13 years original amount of the first was around 175k. amount property is worth 231k to 233k this information was based on  comps in the area when a local agent did a analysis.

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Have you explored whether you have avenues that were non-FHA that would allow you to combine the two amounts as one note given that the appraised valuation is less than the combined note would have been?  Where the two amounts are less than the appraised valuation, it does not make sense to keep two separate notes.  Your total would be less than 80% of the value, so the PMI issue should be out of the equation, which was one of the primary reasons a lot of people added the second mortgage...

 

Had it been less than the $55K, my other suggestion would have been to try and get a personal loan through your small local lender that would then pay off the second mortgage...however, as the situation is described, I am guessing such an option will not BE an option for you.

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What's your reason for refinancing?  Are you trying to pay off the 2nd entirely and get cashout?  

 

There are lenders that they call "non-QM" lenders - basically the new subprime, that might be able to help you.  

 

If you haven't made payments on a valid 2nd mortgage for several years I will be surprised if you can get a traditional lender to give you a conventional or FHA loan.

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