Borrowers can expect to benefit from Enhanced Relief Refinance through lower monthly payments, lower interest rates or shorter amortization terms
, or they can move from adjustable-rate mortgages to fixed-rate mortgages.
Return: The effective coupon available to the excess proceeds once identical coupon and amortization terms are applied to market proceeds (or A-note portion of the modified loan).
Initially, servicers provided relief via expansion of amortization term--on average, the amortization term was approximately 3 percent longer for modified loans overall.
Two of the most significant are longer amortization terms
and shorter redemption provisions.
Only private banking was able to structure the deal with the amortization terms
we wanted," he says.
The loan value (capacity) is then determined by taking the same historical net operating income, the projected interest rate, amortization terms
and the target debt service coverage to calculate the present value of expected earnings.
Wall Street financing available through Cambridge also offer longer amortization terms
and a cash-out option that usually is not available with conventional loans.
Spreads continue to shrink while loan-to-value (LTV) ratios and amortization terms
moved somewhat in favor of the borrower.
generally range from 20 to 25 years, with sporadic instances of 30-year schedules.