Generally, a short sale occurs when the bank permits the homeowner to sell the home for less than the amount owed on the related mortgage. But have you heard of the Federal Housing Authority's (FHA) "Short Refinance" program? This program is designed to help homeowners stay in their homes by refinancing into a more affordable, more stable FHA-insured mortgage.
It may be worth the phone-call to determine if your current mortgage lender participates in the FHA Short Refinance Program.
General Eligibility Requirements Include:
- Your current loan is not owned or or guaranteed by FHA, VA, or USDA.
- You owe more than your home is worth.
- You are current on your mortgage payments.
- You occupy the home as your primary residence.
- Your monthly debt is 50% or less of your gross monthly income.
- You have not been convicted of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction in the last ten years.
If your lender participates in the FHA Short Refinance, your first mortgage must be reduced to no more than 97.75 percent of the current value of your home.
Short Refinance for Second Mortgages - if your first mortgage lender agrees to participate in the FHA Short Refinance, you may be eligible to have your second mortgage reduced or eliminated through the FHA Second Lien Program (FHA2LP). Both mortgages must be on the same owner-occupied property.
Again, you must contact your mortgage lender - and if the second mortgage lender agrees to participate, the total amount of your mortgage debt after the refinance cannot be greater than 115% of your home's present value. Other eligibility criteria may apply.
Homeowners should call their mortgage lender or visit http://www.makinghomeaffordable.gov/Pages/default.aspx
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Posted by Wendy Bernard/The Bernard Law Group
(203)805-4521 www.bernardlawgrp.com
Disclaimer: This blog is provided for informational purposes and is not intended as legal advice. No attorney-client relationship is formed by the reading of this blog. The Bernard Law Group is not affiliated with, nor endorsed by the agencies indicated in this blog. This is not intended as advertising and The Bernard Law Group does not wish to represent anyone desiring representation based upon viewing this blog in any state where this blog fails to comply with all laws and ethical rules of that state. Links in the blog are provided as a convenience to you, and the presence of such a link does not imply a responsibility for the linked site or an endorsement of the linked site, its operator, or its contents.
