Taking a page out of the government's playbook, Cincinnati-based American Homeowner Preservation LLC has rolled out its Cash for Clunker Mortgages program, which allows holders of nonperforming mortgages to trade them in for cash.
The Cash for Clunker Mortgages will pay competitive prices for nonperforming first mortgages, the company says. Nonperforming 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 chargeoffs, those secured by low-value homes and those owned by borrowers in bankruptcy or litigation.
In an effort to provide prompt dispositions of these assets, American Homeowner Preservation will furnish preliminary indicative bids within 48 hours. Once the 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, the company adds. Cash for Clunker Mortgages is open to all holders of nonperforming mortgages secured by single-family homes and two- to four-unit properties anywhere in the U.S. Both bulk pools and single assets are eligible, American Homeowner Preservation says.