The reason Leticia would inflate the value of her property is so she could take cash out in a refinance. If the value was only $546k and she took a cash-out refinance she would only be able to borrow $436k for an 80% loan-to-value refi with no mortgage insurance. In order for her to take a cash-out refi at $625k she would need to claim the value was $781k. That would increase the amount of cash back to the borrower by $189k. When I was in mortgage lending it was common for people to desire a certain amount of cash back when refinancing their homes, but they didn't have enough equity to do so.
If I had to guess based on my experience, I would say she wanted cash and wanted to eliminate the mortgage insurance on the loan and that is why they chose $781k as the property value for loan purposes.
The reason Leticia would inflate the value of her property is so she could take cash out in a refinance. If the value was only $546k and she took a cash-out refinance she would only be able to borrow $436k for an 80% loan-to-value refi with no mortgage insurance. In order for her to take a cash-out refi at $625k she would need to claim the value was $781k. That would increase the amount of cash back to the borrower by $189k. When I was in mortgage lending it was common for people to desire a certain amount of cash back when refinancing their homes, but they didn't have enough equity to do so. If I had to guess based on my experience,
I would say she wanted cash and wanted to eliminate the mortgage insurance on the loan and that is why they chose $781k as the property value for loan purposes.
The reason Leticia would inflate the value of her property is so she could take cash out in a refinance. If the value was only $546k and she took a cash-out refinance she would only be able to borrow $436k for an 80% loan-to-value refi with no mortgage insurance. In order for her to take a cash-out refi at $625k she would need to claim the value was $781k. That would increase the amount of cash back to the borrower by $189k. When I was in mortgage lending it was common for people to desire a certain amount of cash back when refinancing their homes, but they didn't have enough equity to do so. If I had to guess based on my experience,
I would say she wanted cash and wanted to eliminate the mortgage insurance on the loan and that is why they chose $781k as the property for loan purposes.