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Cash-Out Refinace Texas Chapter 13 Buyout
Does anyone know what non-qm lender can do a Cash-Out Refinance in Texas to buy out Chapter 13 Bankruptcy? The borrower has a VA loan now and would like to do a VA cash-out Refinance, but Texas has those crazy rules: you cannot do cash-output Refinance on government loans. Thank you.
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2 Replies
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I have yet to find a non-qm lender that will do this loan in an active Chapter 13. ACRA and Deephaven seem to entertain it, but I do not have high hopes. A6 laws make cash out fairly problematic in Texas. The few times I have done this type of loan I have had the borrower properly get the BK dismissed, and then did the cash out at Oaktree.
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Thank you, Michelle. Spoke with Tony G. from ACRA and he said they can do a cash-out refinance to buy out the Chapter 13 Bankruptcy. The client had a loan modification with Penny Mac three or four months ago but I think the borrower got screwed. Loan modification was done because Texas jacked up property taxes 300% so his mortgage payment went from $1,700 per month to $2,500 per month. Tony said he can work with that. As of Texas A6 law, it can be done with lender paid comp vs borrower paid because A6 Texas law limits the fees and costs to 2.0%. I think Penny Mac did not act best on the borrowers’ behalf on the modification because his rate was 3.25% and now after the modification is 7.5% on a VA loan on a 30 year fixed rate and no discount on the loan balance. Michelle, do you know the waiting period for a VA loan after a loan modification? I know HUD requires a one year waiting period after a loan modification on an FHA loan.