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I'm Working for a big international corporation and I'm back from a few years of relocation in the U.S. while I was in the states on a US payroll (I'm not an American citizen) I bought a property (which was my primary resident for a while). Now I'm back home and wanted to take advantage of the lower interest rates in the US to refinance my debt. I have an excellent credit score, don't have any other debts, never missed a payment, I'm still employed with the same employer that I have been working before and during my relocation to the US. I'm happy with a 75% LTV but my lender has refused my request to refinance because I don't have a current US income. I'm reasonably compensated and proven to never miss a payment even without a "US Income".

Can anybody suggests a research path ?

Thanks!

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The problem is you're probably running afoul of the underwriting standards of Fannie Mae / Freddie Mac, who gobble up most loans.

You probably want to look for a bank that caters to expats or a community bank/credit union that doesn't sell its loans. They have the flexibility to be more reasonable when it comes to underwriting. (Whether they exercise that flexibility is another matter)

That said, foreign income is a huge risk, because not only is the bank subject to the risk that you'll just stop paying and be beyond the reach of US Courts overseas, but they are also exposed to currency risk.

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  • This is all very helpful, I will look for my local expat serving bank. (I presume this is a local function). I'm still hopping that someone will come up with an American institution name that is more friendly to foreigners refinancing.
    – Falusberg
    Oct 17, 2010 at 18:18
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Think about this from the lenders perspective. What happens if you don't pay? If you are a US resident with US income, they can sue you in court, garnish your wages and tax returns, etc.

If you aren't in the US and don't have any income in the US, the US bank has little or no recourse against you other than trying to sue you in your home country, which even if possible, would likely be impractical.

It just adds risk that most banks wouldn't want to take. Your best bet would be to find a large international bank that has a presence in both the US and your home country.

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    If he doesn't pay, won't they just foreclose in the US system? Do banks ever garnish wages instead of just foreclosing? I am in agreement that they would be stricter about the value of the home to the loan, but it should be the same deal.
    – MrChrister
    Oct 12, 2010 at 19:30
  • @MrChrister - Yes, they could still foreclose on the house, but if selling the house doesn't cover the loan amount + costs (a very real possibility these days) they have no way to collect on the difference.
    – Eric Petroelje
    Oct 13, 2010 at 20:54
  • Of course, which is why it would be important for the bank to ensure the home they are loaning against is worth more than the loan. They would be stricter about how much to loan, but the loan is still backed by the asset. They aren't suing people in the US for the recourse amount for undervalued homes going into foreclosure.
    – MrChrister
    Oct 13, 2010 at 21:43
  • @MrChrister - I believe they do, but it depends on the state, and even in states where they can't, they still try: stevebeede.com/2009/04/…
    – Eric Petroelje
    Oct 14, 2010 at 18:37
  • @Eric: Interesting link! It is now defunct, so here is a copy from wayback: web.archive.org/web/20160420171313/http://stevebeede.com/2009/…
    – ntg
    Jun 11, 2018 at 8:09

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