FHA Short Refinance Questions

Based on the Mortgage Letter that was issued yesterday, it is up to your lien holders to offer you this program**** Participation in FHA's short 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. 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. 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 and a combined loan-to-value ratio no greater than 115 percent.***http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-190

FHA backs the loan. They don't lend. When a new program comes along it may take lenders several months to implement. I suggest waiting a least 30 days before you pose this question again. .... Happy funding, Rudi