The BurkeyLoan® is a residential mortgage loan program. It was developed by the Company to solve the growing problem of negative equity by providing a tangible solution for a homeowner seeking to refinance or to modify an existing mortgage with a balance greater than the current value of the home.
The signature feature of a BurkeyLoan® is the seamless combination of up to three separate components or loans. Structurally, it is similar to a first and second mortgage. However, the BurkeyLoan® differs in that it offers a cooperative lien priority as well as a single monthly payment.
The BurkeyLoan® has two primary components, the Burkey Core Value Mortgage™ and the Burkey Tier Equity Mortgage™. The third loan component, used when the homeowner has negative equity, is the Burkey Future Appreciation Mortgage™.
The BurkeyLoan® Components
BurkeyLoan® Core Value Mortgage™ (BCVM) is an assumable, fixed rate, interest only loan that stays with the house until the mortgage is paid. The BCVM financing maximum is 50% loan-to-value (LTV) of the home's current value; it maintains first lien priority and has provisions allowing second lien lenders to protect their positions. Although it has a long-term fixed rate, the loan has an inflation feature allowing homeowner periodic resets of the loan amount and rate.
BurkeyLoan® Tier Equity Mortgage™ (BTEM) is a traditional fully amortizing loan with both a fixed rate and a fixed term. The loan is in a second lien position and can be as much as 50% of the home's current value. The BTEM is added on top of the BCVM and can represent between 51% and 100% LTV of the homes current value. The BTEM is not assumable and resets are only available through refinancing.
BurkeyLoan® Future Appreciation Mortgage™ (BFAM). This component represents the negative equity amounts above 100% of the home’s current value. The loan is interest only and the homeowner has three options: 100%, 50% or 0% participation in the home’s equity appreciation. The level of participation determines the amount of monthly interest to be paid.
The BurkeyLoan® is available from banks and financial institutions nationwide that participate in the BurkeyLoan Mortgage Program™.