FHA ‘Short-Refi Program’ debt relief for underwater homeowners

[bearishgurl]

It’s apparently designed to prevent “walkaways” in cases where the borrower is still current on the mortgage.

http://firsttuesdayjournal.com/fha-%E2%80%98short-refi-program%E2%80%99-debt-relief-for-underwater-homeowners/

. . . the refinancing is contingent on the existing mortgage lender agreeing to a minimum 10% discount (principal reduction) on the payoff. Worse, the program calls only for voluntary lender participation, which is not going to happen when the owner is current on payments — essentially creating a “Catch-22.”

Here are the refinancing conditions:

* the homeowner’s mortgage balance exceeds the current value of their home (negative equity);
* the homeowner is current on their mortgage payments;
* the property securing the mortgage is the homeowner’s primary residence;
* the homeowner has a Fair Isaac Corporation (FICO) score of at least 500;
* the homeowner’s total payments on all monthly obligations do not exceed 50% of their gross monthly income;
* the refinanced loan is not an FHA-insured loan;
* the homeowner meets standard FHA underwriting requirements;
* the refinanced amount is within FHA limits for the county where the property is located;
* the lender agrees to reduce the principal balance on payoff by at least 10%; and
* the lender of any second mortgage agrees to subordinate to the new FHA-insured loan.

Loan servicers on the paid-off mortgage are paid $500 on payoff by the refinance. The paid-off lender receives six to 21 cents for every dollar discounted from the principal balance. This incentive money comes from the Troubled Asset Relief Program (TARP).

The FHA is hoping lenders will net more from reducing the principal for underwater homeowners than by the alternative of foreclosure.

first tuesday take: This program, as with every other government program providing some type of mortgage relief during this recession, was dead on arrival for California negative equity homeowners . . .

(emphasis added)

Is this just another time-wasting tactic and the ultimate in stupidity . . . or what??

[Coronita]

“what” 🙂

[Coronita]

“what” 🙂

[Coronita]

“what” 🙂

[Coronita]

“what” 🙂

[Coronita]

“what” 🙂

[jpinpb]

I have an attorney that I deal w/through work. She had bought a house in Escondido at peak for 420k. I remember when she bought it. Her dad was ill and she wanted to be close to work and him. She was excited about getting it. I said nothing. I just kept thinking in my head that the bubble was going for far too long.

Saw her the other day. She filled me in on her housing situation. Neighbor across the street sold their place in pristine, upgraded condition for 325k. Hers is not in nearly as good condition and even needs a new roof. She figures she’s upside down minimum 120k.

Here’s her deal. Her adjustable rate fell, so her payments are less. She has plenty of money to pay for it. She doesn’t want to. Her dad passed away and she wants to move to a better school district for her kid and she doesn’t see values going up in that area any time soon.

She’s not interested in any programs. She’s contemplating walking. Business decision.

All these programs just kick the can. I haven’t heard that any of these programs have been a great success. Sure, there’s a handful it’s helped. But for the most part, IMO, it’s done nothing more than extend and pretend.

From what I’m seeing and hearing, people aren’t interested in keeping a depreciating asset. Some people only bought w/the intent to flip and make more money so for them, there is no question they’re walking.

[jpinpb]

I have an attorney that I deal w/through work. She had bought a house in Escondido at peak for 420k. I remember when she bought it. Her dad was ill and she wanted to be close to work and him. She was excited about getting it. I said nothing. I just kept thinking in my head that the bubble was going for far too long.

Saw her the other day. She filled me in on her housing situation. Neighbor across the street sold their place in pristine, upgraded condition for 325k. Hers is not in nearly as good condition and even needs a new roof. She figures she’s upside down minimum 120k.

Here’s her deal. Her adjustable rate fell, so her payments are less. She has plenty of money to pay for it. She doesn’t want to. Her dad passed away and she wants to move to a better school district for her kid and she doesn’t see values going up in that area any time soon.

She’s not interested in any programs. She’s contemplating walking. Business decision.

All these programs just kick the can. I haven’t heard that any of these programs have been a great success. Sure, there’s a handful it’s helped. But for the most part, IMO, it’s done nothing more than extend and pretend.

From what I’m seeing and hearing, people aren’t interested in keeping a depreciating asset. Some people only bought w/the intent to flip and make more money so for them, there is no question they’re walking.

[jpinpb]

I have an attorney that I deal w/through work. She had bought a house in Escondido at peak for 420k. I remember when she bought it. Her dad was ill and she wanted to be close to work and him. She was excited about getting it. I said nothing. I just kept thinking in my head that the bubble was going for far too long.

Saw her the other day. She filled me in on her housing situation. Neighbor across the street sold their place in pristine, upgraded condition for 325k. Hers is not in nearly as good condition and even needs a new roof. She figures she’s upside down minimum 120k.

Here’s her deal. Her adjustable rate fell, so her payments are less. She has plenty of money to pay for it. She doesn’t want to. Her dad passed away and she wants to move to a better school district for her kid and she doesn’t see values going up in that area any time soon.

She’s not interested in any programs. She’s contemplating walking. Business decision.

All these programs just kick the can. I haven’t heard that any of these programs have been a great success. Sure, there’s a handful it’s helped. But for the most part, IMO, it’s done nothing more than extend and pretend.

From what I’m seeing and hearing, people aren’t interested in keeping a depreciating asset. Some people only bought w/the intent to flip and make more money so for them, there is no question they’re walking.

[jpinpb]

I have an attorney that I deal w/through work. She had bought a house in Escondido at peak for 420k. I remember when she bought it. Her dad was ill and she wanted to be close to work and him. She was excited about getting it. I said nothing. I just kept thinking in my head that the bubble was going for far too long.

Saw her the other day. She filled me in on her housing situation. Neighbor across the street sold their place in pristine, upgraded condition for 325k. Hers is not in nearly as good condition and even needs a new roof. She figures she’s upside down minimum 120k.

Here’s her deal. Her adjustable rate fell, so her payments are less. She has plenty of money to pay for it. She doesn’t want to. Her dad passed away and she wants to move to a better school district for her kid and she doesn’t see values going up in that area any time soon.

She’s not interested in any programs. She’s contemplating walking. Business decision.

All these programs just kick the can. I haven’t heard that any of these programs have been a great success. Sure, there’s a handful it’s helped. But for the most part, IMO, it’s done nothing more than extend and pretend.

From what I’m seeing and hearing, people aren’t interested in keeping a depreciating asset. Some people only bought w/the intent to flip and make more money so for them, there is no question they’re walking.

[jpinpb]

I have an attorney that I deal w/through work. She had bought a house in Escondido at peak for 420k. I remember when she bought it. Her dad was ill and she wanted to be close to work and him. She was excited about getting it. I said nothing. I just kept thinking in my head that the bubble was going for far too long.

Saw her the other day. She filled me in on her housing situation. Neighbor across the street sold their place in pristine, upgraded condition for 325k. Hers is not in nearly as good condition and even needs a new roof. She figures she’s upside down minimum 120k.

Here’s her deal. Her adjustable rate fell, so her payments are less. She has plenty of money to pay for it. She doesn’t want to. Her dad passed away and she wants to move to a better school district for her kid and she doesn’t see values going up in that area any time soon.

She’s not interested in any programs. She’s contemplating walking. Business decision.

All these programs just kick the can. I haven’t heard that any of these programs have been a great success. Sure, there’s a handful it’s helped. But for the most part, IMO, it’s done nothing more than extend and pretend.

From what I’m seeing and hearing, people aren’t interested in keeping a depreciating asset. Some people only bought w/the intent to flip and make more money so for them, there is no question they’re walking.

[jficquette]

I am serious when I say this. They need to bring back the no doc loans but require 20-25% down.

Rinse repeat.

John

[jficquette]

I am serious when I say this. They need to bring back the no doc loans but require 20-25% down.

Rinse repeat.

John

[jficquette]

I am serious when I say this. They need to bring back the no doc loans but require 20-25% down.

Rinse repeat.

John

[jficquette]

I am serious when I say this. They need to bring back the no doc loans but require 20-25% down.

Rinse repeat.

John

[Author]

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