Case Studies: How SUN Helped Two Families Refinance Out of Foreclosure

January 25th, 2024

While BlueHub SUN’s buy-back product may be more familiar to housing professionals, SUN also offers homeowners facing foreclosure the option to refinance into a new mortgage. Refinancing out of foreclosure is rare for homeowners with significant financial hardships. However, for homeowners with equity in their homes, SUN may be able to offer a new affordable mortgage to allow them to keep the property and avoid eviction. SUN’s refinance product does not have a shared appreciation mortgage because the homeowners pay their prior mortgage in full and without the reduction that leads to the shared appreciation requirement.

Two of the homeowners SUN helped are Lauren Taylor* and Kevin Russell*. Both had unique and complicated financial situations when they applied to SUN. SUN’s adaptive strategies to mortgage financing allowed it to overcome Taylor’s and Russell’s extenuating circumstances, give both a second chance to stay in their homes and increase their home’s equity. Here are their stories.

A Single Mother Works with SUN to Save her Home and Equity

Lauren Taylor, a 45-year-old single mother of three was not new to homeownership when she faced financial difficulties and a home equity line of credit (HELOC) balloon payment.

"I’ve been a homeowner since I was 24 years old, and I paid off my first home with the same credit union I financed this one with," Taylor recounted, emphasizing her longstanding responsible homeownership. Despite her careful planning, she found herself in a predicament after filing for bankruptcy, which hindered her ability to refinance. "My bankruptcy lawyer did not inform me that there would be a balloon payment I couldn’t refinance," she revealed, highlighting a critical oversight in her financial journey.

Faced with a daunting $48,000 balloon payment and unable to gather the funds while supporting her family on a limited income, Taylor was determined to keep her home. "With three kids, I have a lot of expenses, so it was impossible for me to come up with tens of thousands of dollars at one time," she explained, illustrating her challenging situation. Despite suggestions to sell her house, she resisted: " I didn’t want to be forced out of my home by the bank; I wanted to move voluntarily," Taylor insisted, prioritizing her children's stability and comfort.

In her search for refinancing options, Taylor discovered BlueHub SUN through a Google ad.

With just hours to spare, SUN was able to get Taylor refinanced with a loan of $55,000 that covered the full balloon payment she owed her credit union. It was the first mortgage refinancing deal SUN did in her state. “We closed the loan at 4:00 p.m. on June 30, 2022, and the title company hand-delivered the payment to my credit union that day. The auction was scheduled for the next morning at 10:00 a.m.,” she remembers.

"They allowed me to keep everything I’ve worked for," Taylor gratefully acknowledged, her story underscoring the importance of thorough financial advice and supportive lending practices.

Because her SUN loan is a standard mortgage refinance and does not include a reduction in her prior mortgage, she will keep all the equity in her home when she sells or refinances into a traditional mortgage. Her home equity is now over $100,000 because of SUN’s mortgage refinancing solution.

Single Father Partners with BlueHub SUN to Avoid Eviction and Rebuild Home Equity

Kevin Russell’s real estate agent told him to contact BlueHub SUN about his mortgage just 16 days before the foreclosure process started on his house. He was facing the loss of his home of 20 years after struggling since 2010 to pay his mortgage. “I lost my job that year and my mortgage had stayed unpaid because I didn’t have the money,” he explains.

When his unemployment payments ended, Russell supported himself and his children with commissioned work, mechanic work and odd jobs. “But it wasn’t enough to cover my monthly mortgage payment,” he says. So, his second lien holder foreclosed on that mortgage in 2017.

“A second mortgage lien holder foreclosing on him rather than the first is rather unusual, making his situation unique,” says Beattie, who worked with Russell on refinancing his real estate loan. That loan of $125,000 was much smaller than the primary mortgage of $236,000, but Russell stood to lose his home of 20 years because of that lien holder’s foreclosure action.

When Russell contacted SUN, he’d just started a full-time professional role with a higher salary and he was able to afford his entire mortgage payment. He was unable to get refinancing elsewhere.

“We weren’t sure we could refinance him,” says Beattie. “But he changed jobs after the foreclosure so his higher income made a refinance transaction possible. Russell also got a $35,000 gift from his brother that brought his debt-to-income ratio down to just below the qualifying level,” he explains.

Prior to contacting SUN, Russell negotiated a price of $107,000 for the second mortgage with the company that purchased his home at the foreclosure auction in May 2017. Now Russell needed financing to pay the investor and to pay back his first mortgage holder, which was still owed the balance of $236,000.

SUN closed on the refinance loan in July 2017, giving Russell a mortgage loan of $319,000. Russell’s monthly mortgage payment went down from $3,925 to $2,553 after refinancing with SUN.

“Russell’s story is remarkable because directly after closing on his SUN mortgage, he went from facing eviction and likely having to rent to immediately having $93,000 in equity, $35,000 of which was because his brother’s gift,” explains Beattie. “Our foreclosure relief program prevented the eviction of Russell, his children, and his tenant,” says Beattie. According to Zillow, as of January 2024, Russell’s home is worth $588,400.

SUN Finds Solutions

When job losses and related financial instability prevented Russell and Taylor from making their monthly mortgage payments, they found themselves facing foreclosure. Dedicated to acting with compassion toward its clients during difficult times, SUN committed to both understanding their distinct situations and applying innovative foreclosure prevention strategies to refinance their mortgages.

“Other lenders aren’t willing to take a chance on our clients. Yet after 14 years, SUN has proved that the vast majority of clients can and do pay their mortgage payments on time and in full. When given the opportunity to improve their financial situation, they take it,” says Beattie.

Both clients ended up with increased equity in their homes and reasonable monthly payments. SUN also helped them keep their homes in their families and stabilize their communities.

*The names of clients featured here have been changed to protect their privacy. But the specifics and timelines of events depicted are factual representations of their experiences working with SUN.

Related Blog Posts