California Home Loan Provider Offers No Payments For a Year
How would you like not to make any mortgage payments for a year?
Crazy as it sounds, one California mortgage loan provider is making that a possibility for borrowers. Mortgage Payment Deferral, Inc., has just come out with a mortgage program - called 12 Month Deferral or 12MoDef - allowing homeowners to defer 3-36 months of payments.
Moreover, this new product can be applied to any type of traditional mortgage loan or home equity loan refinancing program.
The company says it created the program with the idea that a year without home loan payments could give someone financial freedom and stability for a better future. Especially in California, many residents are making big job changes, starting families or struggling with a new business venture.
A year without the stress of a staggeringly high California mortgage bill allows people to reassess their financial situation and regain control of their life again, the lender believes.
It’s been three years in the making. Banks, lawyers and title companies that the idea was impossible and that Mortgage Payment Deferral were basically wasting its time. But the company persisted.
12MoDef works by setting aside some equity of a home into a trust account for the benefit of the owner. Each month, a trustee ensures that the mortgage payment is made to the correct mortgage lender. The owner receives a monthly statement which combines their current mortgage statement and trust account statement.
During the deferral period, the homeowner keeps more of their income each month, is guaranteed on-time mortgage payments, and earns an aggressive rate of interest on the money in the trust account. At the end of the deferral period, the trust is closed; the borrower is given all of the earned money earned during the interest accrual period and resumes making mortgage payments.
The company will be offering 12MoDef to selected mortgage brokers and banks on a nationwide basis in 2007. Now, the only lender licensed to offer the 12MoDef product is Harbinger Mortgage Solutions, a mortgage broker located in Northern California.