FHA Says Lenders Lined Up for Short-Refi Program
FHA Says Lenders Lined Up for Short-Refi Program
FHA Says Lenders Lined Up for Short-Refi Program
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March 3, 2011 (Shirley Allen)
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Federal Housing Administration (FHA) Commissioner David Stevens testified before a House Financial Services panel, that is slated to vote on terminating the FHA Short-Refi and HAMP programs, twenty-three lenders had signed up to participate in the Short-Refi program designed to help underwater borrowers avoid foreclosure as of February 11.

Stevens also reported that two major lenders, Wells Fargo and Ally Financial, recently announced they were beginning pilot programs, selecting a few loans held in their portfolio.

The Short-Refi program is one of four programs that House Republicans are considering terminating, stating that government-backed loan modification/foreclosure prevention programs have “failed and are ineffective.” You can read the full report here.

The FHA launched the Short-Refi program September 7, 2010. To date, 245 FHA case numbers have been requested, and 44 loans have been endorsed.

Under the program, eligible borrowers can receive an FHA-insured loan if the lender or investor writes off the unpaid principal balance of the original first-lien by at least 10 percent.

To be eligible for the new loan, the homeowner must be underwater but still current on the mortgage, which cannot be already insured by the FHA. A credit score of 500 or better is required. The new refinanced loan must have a loan-to-value ratio of no more than 97.75 percent.

After receiving the new refinancing through the program, the borrower’s combined loan-to-value ratio on the re-subordinated mortgages cannot exceed 115 percent. The new FHA mortgage can only be used to refinance the unpaid principal balance on the first lien.

So far, loans approved under the program have had an average credit score of 711. The average write-off is $60,000, and the average balance on the new government guaranteed mortgage is $248,400 with a 91.4 percent LTV ratio.

“Although the number of loans endorsed to date is relatively low, the offering has only been available for a few months while systems and operational infrastructure must often be developed to utilize this option, in addition to the significant coordination required throughout the mortgage chain,” Stevens said.

Now that home values have nearly stabilized, “lenders can make more accurate calculations about the expected returns from principal reductions,” Stevens testified. He said lenders have “increasingly recognized that a principal write down can be an economically rational alternative to foreclosure to preserve value in their mortgage holdings.”

Tags: FHA, Short-Refi program, lenders, loan modification, foreclosure prevention, borrowers, refinanced loan, principal write down, mortgage holdings

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Helpful Tools
Mortgage
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Estimate your monthly mortgage payment
Auto Loan
Calculator

Determine how much car you can afford before buying
Learn About
Mortgage Loans

Learn about the different types of home loans
15 Year vs 30 Year
Loan Comparison

Compare 15 year and 30 year mortgage loans
Todays Mortgage
Rates

See today's mortgage rates. Shop, compare and save.

March 3, 2011 (Shirley Allen)
mortgage-loanmod-saved-image
Federal Housing Administration (FHA) Commissioner David Stevens testified before a House Financial Services panel, that is slated to vote on terminating the FHA Short-Refi and HAMP programs, twenty-three lenders had signed up to participate in the Short-Refi program designed to help underwater borrowers avoid foreclosure as of February 11.

Stevens also reported that two major lenders, Wells Fargo and Ally Financial, recently announced they were beginning pilot programs, selecting a few loans held in their portfolio.

The Short-Refi program is one of four programs that House Republicans are considering terminating, stating that government-backed loan modification/foreclosure prevention programs have “failed and are ineffective.” You can read the full report here.

The FHA launched the Short-Refi program September 7, 2010. To date, 245 FHA case numbers have been requested, and 44 loans have been endorsed.

Under the program, eligible borrowers can receive an FHA-insured loan if the lender or investor writes off the unpaid principal balance of the original first-lien by at least 10 percent.

To be eligible for the new loan, the homeowner must be underwater but still current on the mortgage, which cannot be already insured by the FHA. A credit score of 500 or better is required. The new refinanced loan must have a loan-to-value ratio of no more than 97.75 percent.

After receiving the new refinancing through the program, the borrower’s combined loan-to-value ratio on the re-subordinated mortgages cannot exceed 115 percent. The new FHA mortgage can only be used to refinance the unpaid principal balance on the first lien.

So far, loans approved under the program have had an average credit score of 711. The average write-off is $60,000, and the average balance on the new government guaranteed mortgage is $248,400 with a 91.4 percent LTV ratio.

“Although the number of loans endorsed to date is relatively low, the offering has only been available for a few months while systems and operational infrastructure must often be developed to utilize this option, in addition to the significant coordination required throughout the mortgage chain,” Stevens said.

Now that home values have nearly stabilized, “lenders can make more accurate calculations about the expected returns from principal reductions,” Stevens testified. He said lenders have “increasingly recognized that a principal write down can be an economically rational alternative to foreclosure to preserve value in their mortgage holdings.”

Tags: FHA, Short-Refi program, lenders, loan modification, foreclosure prevention, borrowers, refinanced loan, principal write down, mortgage holdings

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

March 3, 2011 (Shirley Allen)
mortgage-loanmod-saved-image
Federal Housing Administration (FHA) Commissioner David Stevens testified before a House Financial Services panel, that is slated to vote on terminating the FHA Short-Refi and HAMP programs, twenty-three lenders had signed up to participate in the Short-Refi program designed to help underwater borrowers avoid foreclosure as of February 11.

Stevens also reported that two major lenders, Wells Fargo and Ally Financial, recently announced they were beginning pilot programs, selecting a few loans held in their portfolio.

The Short-Refi program is one of four programs that House Republicans are considering terminating, stating that government-backed loan modification/foreclosure prevention programs have “failed and are ineffective.” You can read the full report here.

The FHA launched the Short-Refi program September 7, 2010. To date, 245 FHA case numbers have been requested, and 44 loans have been endorsed.

Under the program, eligible borrowers can receive an FHA-insured loan if the lender or investor writes off the unpaid principal balance of the original first-lien by at least 10 percent.

To be eligible for the new loan, the homeowner must be underwater but still current on the mortgage, which cannot be already insured by the FHA. A credit score of 500 or better is required. The new refinanced loan must have a loan-to-value ratio of no more than 97.75 percent.

After receiving the new refinancing through the program, the borrower’s combined loan-to-value ratio on the re-subordinated mortgages cannot exceed 115 percent. The new FHA mortgage can only be used to refinance the unpaid principal balance on the first lien.

So far, loans approved under the program have had an average credit score of 711. The average write-off is $60,000, and the average balance on the new government guaranteed mortgage is $248,400 with a 91.4 percent LTV ratio.

“Although the number of loans endorsed to date is relatively low, the offering has only been available for a few months while systems and operational infrastructure must often be developed to utilize this option, in addition to the significant coordination required throughout the mortgage chain,” Stevens said.

Now that home values have nearly stabilized, “lenders can make more accurate calculations about the expected returns from principal reductions,” Stevens testified. He said lenders have “increasingly recognized that a principal write down can be an economically rational alternative to foreclosure to preserve value in their mortgage holdings.”

Tags: FHA, Short-Refi program, lenders, loan modification, foreclosure prevention, borrowers, refinanced loan, principal write down, mortgage holdings

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.