Request: Applicant owned primary residence and 2 rental properties. One of the rental properties fell into arrears and foreclosure proceedings were started. Request submitted to refinance the existing 1st mortgage AND some extra funds to further consolidate some other consumer debt.
Challenge:
- Purpose of the request is ALWAYS a challenge
- Additional cash out on top of the existing mortgage balance is rarely approved
- Stated income for main application where it was this income that caused the arrears
- Beacon for main application 552 with recent major derog credit and collections
- Subject property being an average rental duplex
Results:
- Agent submitted the deal to Plan B on a Thursday
- Plan B reviewed the situation to ensure the cause of the arrears had a cure in place. Plan B wont take on a foreclosure file until they are satisfied of what the cause and cure is
- Plan B accepted the file for processing the next day Friday
- Numerous lenders were approached for approval without success. 10 days of diligent shopping finally yielded an approval
- Plan B identified more security and income was required on the application to yield the best approval so a daughter was added to the application, a 2nd rental and the applicants primary residence was added to the blanket mortgage application for a 3 way interalia
- New mortgage was approved with an addition $90,000 of cash out to cover closing costs and consolidate more consumer debt
- The final mortgage was a 1st on the foreclosure property and 2nd over the other 2 properties
- Final LTV was 70% LTV
- Approval terms were very acceptable to the consumer and referring agent as payment fit into the budget and CURE plan
- Approved 1yr term @ 9.25% rate with 2% lender fee on a 30 year amortisation
- Referring agent received 100bps and a loyal happy client for life