American Homeowner Preservation unveils Cash for Clunker Mortgages program

American Homeowner Preservation unveils Cash for Clunker Mortgages program

October 19, 2009

The Cash for Clunker Cars program ended on Aug. 24, but another stimulus program has recently been established. Administered by American Homeowner Preservation LLC, the Cash for Clunker Mortgages program has been launched and it will enable holders of non-performing mortgages to trade them in for cash. Holders of non-performing first mortgages are losing money each month as holding costs accrue and property values deteriorate. In an effort to allow lenders and servicers to focus their efforts on the loans more likely to qualify for the Home Affordable Mortgage Program (HAMP), Cash for Clunker Mortgages will pay competitive prices for non-performing first mortgages. Non-performing loans, particularly those in bankruptcy or other litigation, demand a disproportionate amount of time and effort to service. Thus, loans eligible for Cash for Clunker Mortgages include charge-offs, those secured by low-value homes and those owned by borrowers in bankruptcy or litigation, all of which are high maintenance for the servicing industry.
In an effort to provide prompt dispositions of these assets, Preliminary Indicative Bids will be furnished within 48-hours. Once the Preliminary Indicative Bid is approved by the seller, due diligence will be completed on the mortgages. Funding typically occurs within three to four weeks of receiving summary loan data. Cash for Clunker Mortgages is open to all holders of non-performing mortgages secured by single family homes and two- to four-unit properties anywhere in the United States. Furthermore, both bulk pools and single assets are eligible.
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