A review of the FHA updated guidelines to the short refinance modification for struggling homeowners who are current but have lost value in their home.With the ever increasing rates of foreclosures and homeowners walking away from their homes, the government has announced a revision to the short refinance modification. Announced back in March 2009 the Home Affordable Modification Program has helped thousands of struggling home owners to stay in their home. However, there is still certain areas of the country that has seen such a devaluation of their property that these homeowners are choosing to walk away. Below are some of the basic requirements for this new short refinance modification.
Must be current on your mortgage
Have a non FHA government mortgage loan
Must be your primary residence
A minimum credit score of 500
First mortgage lien must be willing to write of 10% of mortgage principal reduction
Loan to value ratio should be no more than 97.75 %
2nd lien’s must be willing to agree to full and or partial write off
This new short refinance will only be available to those homeowners whose lenders are willing to participate and are in the targeted areas. IF you cannot keep your home and refinancing is not an option you may want to consider applying for a loan modification. In some cases, lender’s may reduce principal as part of the loan modification. However, it is very far and it is not a common practice with lenders, but you may get some assistance by exploring your options and knowing your rights.