New FHA - Short Refi Program Now Offers Relief to Northern California Home Owners
Kathleen Pender of the SFGate.com reported in a recent article titled FHA to Offer Short Refis that the FHA is now offering certain borrowers who are current on their payments and owe more than their homes are worth refinancing into a new mortgage guaranteed by the, Federal Housing Administration (FHA) but only if the owner of their first mortgage agrees to reduce the principal balance by at least 10 percent. This is called the FHA short refi program. The benefits to this type of program is that instead of selling a home for less than the outstanding debt (a short sale), the homeowner refinances for less than the outstanding debt.
Most homeowners that I have met with report that many banks tell them that they "must be behind in their mortgage payments" before the banks will talk to them.
Since many homeowners are current with the mortgage payments, but are barely holding on, this program may prove to be very helpful.
Today's homeowners are faced with having to make large payments on loans where the properties are no longer worth the amount that is owed against their homes.
Often, homeowners are finding themselves paying much higher amounts than their new neighbors who have just moved in next door after purchasing their new home on a short sale or from a foreclosure sale. Existing homeowners are frustrated because they have in many cases put large down payments on homes and are paying twice as much for the same house as their neighbors. In many of these situations, homeowners are simply making the decision to walk away from their homes because it no longer makes any economic since to keep paying on these homes.
This new FHA - Short Refi Program may offer the help many homeowners have been waiting for.
Northern California Bankruptcy attorneys can help homeowners get relief with their second mortgages.
