Refi with "Settled Less than Full" on credit

**olderbae** · 09-01-2011, 06:06 PM

I had a 80/20 interest only loan. 1st loan at 383,000 and 2nd at 96,500. I was underwater as the same amount as my 2nd.

My situation has changed now. I settled my 2nd loan of 96,500 for 12,500. The loan is now closed as paid in full. But my credit is reported as "Settled less than full". I have had no deliquencies. So now I have one loan at 383,000 which is where my value is. I maybe be at 105%, not sure but Zillow says the value is 390,000.

I am now trying to figure out if I have more options for refinancing. Do I have any options for refinancing?

**TomEason** · 09-02-2011, 11:52 PM

olderbae

Thanks for your post. You won't be able to refi without a government program. Your LTV is the challenge. You might Google for more info about Fed refi programs; I believe there is one available that will allow a refinancing with an LTV of as high as 125%. But I know nothing about the qualifying criteria on that program.

I wish you the best of luck.

**helpfixmyloan** · 03-10-2012, 10:01 PM

TomEason, what government program qualifies? I am in the same boat but my LTV is below 125% and I have settled my second. My issue is the lenders don't want to refinance a property that had a second that has settled. Will HARP 2.0 help me out?

thanks!

**TomEason** · 03-11-2012, 07:57 AM

Originally Posted by helpfixmyloan

TomEason, what government program qualifies? I am in the same boat but my LTV is below 125% and I have settled my second. My issue is the lenders don't want to refinance a property that had a second that has settled. Will HARP 2.0 help me out?

thanks!

Sorry, I don't know the answer. You might visit the MHA site, and/or conduct some research online, like Googling HARP 2.0.

**olderbae** · 03-13-2012, 06:05 PM

Originally Posted by helpfixmyloan

TomEason, what government program qualifies? I am in the same boat but my LTV is below 125% and I have settled my second. My issue is the lenders don't want to refinance a property that had a second that has settled. Will HARP 2.0 help me out?

thanks!

Helpfixmyloan, I think you and I are in the same boat. I have been researching around about the "settled" mark on our credit. Every mortgage broker has rejected to help. Although, I did find someone who thought it could be done with an FHA. Let me know if you find any new information. Thanks.

**helpfixmyloan** · 03-14-2012, 08:28 AM

I will let you know. Please do the same ;-)

**Erik Sandstrom** · 03-19-2012, 09:26 PM

You're eligible for HARP 2.0 under the same servicer program if your loan is Fannie Mae or Freddie Mac backed and purchased by them before May 31st of 2009, they have more lenient guidelines.

FHA could be an option (obviously must be owner occupied) my underwriting came back when I asked them regarding settled accounts "There is no specific guideline or seasoning requirement for settled 2nd mortgages however it will be reviewed on a case by case basis and will be dependant on the overall strength of the file."

**CalOkie** · 03-19-2012, 09:48 PM

Erik,
Very interesting info.... I'm hoping to settle my 2nd shortly while being current on both 1st and 2nd (I know it doesn't happen often but it is my best option..maybe). My 1st will still be underwater - however it is with BofA and I not owned by Freddie or Fannie. Are there any refi options for me?

**Erik Sandstrom** · 03-19-2012, 10:10 PM

The only option I know of at this time is a loan modification with your current lender to be honest. This could change, you never know in this industry.