News from the National Association of Realtors®

Wed 8/11/2010 4:57 PM

FHA launches refi program for underwater borrowers

The Federal Housing Administration (FHA) last week provided details on its “FHA Short Refinance” program that will enable lenders to provide additional refinancing options to underwater homeowners.  Beginning Sept. 7, the FHA is offering eligible underwater non-FHA borrowers the opportunity to qualify for a new FHA-insured mortgage.

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 greater than or equal to 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 percent of their unpaid principal balance, bringing that borrower's combined loan-to-value ratio to no greater than 115 percent.

Additionally, 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.

Fannie Mae offers online resource to educate struggling homeowners

Fannie Mae recently announced the launch of KnowYourOptions.com, a new consumer education Web site outlining the choices available to homeowners struggling to meet their mortgage obligations.  The online resource, which offers information in both English and Spanish, provides guidance on how borrowers can contact and work with their mortgage servicer to find solutions.
 
Key features of KnowYourOptions.com include:

• Interactive Options Finder to help homeowners identify options that might be right for their situation;
• Calculators to help borrowers understand how many of the options work, including refinance, repayment, forbearance, and modification;
• Videos featuring real homeowners discussing how they received help and housing counselors providing advice;
• A virtual assistant to walk homeowners through key areas of the site; and
• Next steps and helpful forms, including a financial checklist and contact log to help borrowers be prepared when contacting their mortgage company or housing counselor.

Fannie Mae plans to implement a comprehensive marketing outreach campaign to raise awareness about the site and also intends to use the site as a vehicle to roll out new options for borrowers that are currently being developed.

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Send mail to hal.cutler@verizon.net with questions or comments about this web site. Surfside-Anacapa Real Estate is independently Owned and Operated. Harold "Hal" Cutler is licensed by the California Department of Real Estate #01138681.  Information contained herein is deemed reliable, but not guaranteed.  References to size or square footage is taken from public records but is not verified. If your property is listed with a Broker, this site is not intended as a solicitation of  the listing.  Property offered is subject to prior sale.  Consult a qualified specialist for legal or tax issues.
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Last modified: August 16, 2010 14:05