Short Refi Fha

[sanjay1992]

I see this new program is getting launched and will be available in sep.
Would it be helpful for people who are underwater and unable to do loan modification or refinance.
The only issue which I guess is major one "lender should be able to forgive 10% of principal"
I am not sure whether wellsfargo will do this.
Is this option is going to be another useless or we can get benefit out of it.
I am currently in CA and property is 25% down and I owe almost 108% of todays market price.

[Evan Bedard]

Welcome and thank you for joining the community.

We will just have to wait and see how various lenders implement this program. If this program is anyhting like HAMP when it first came out it may be a long time before we start seeing results..

[Maurice Bedard]

It starts Sept. 7th.

Participation in FHA’s refinance program is voluntary and requires the consent of all lien holders. To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal to or greater than 500. The property must be the homeowner’s primary residence. And the borrower’s existing first lien holder must agree to write off at least 10% of their unpaid principal balance, bringing that borrower’s combined loan-to-value ratio to no greater than 115%.

In addition, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. Interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees the write down a portion of the unpaid principal.

The big thing here is voluntary. We all know what that means.....

Ref: FHA Launches Short Refi Opportunity for Underwater Homeowners | Loans - Credit - Debt - LoanSafe.org

[renink]

9/22 I haven't been able to qualify for Refinance or Loan Mod and was asked to keep calling back because Wells Fargo is currently in the "Review Process" as to whether they are going to participate.

[Maurice Bedard]

This will likely be the case for a few months. Anytime a new programs comes out it takes months to implement and months to see if it will work. One thing is for sure, please do not hold your breathe.