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California Homeowners Can Stop Foreclosure with Loan Modifications, Forensic Loan Audits and Negotiated Mortgage Loan Modification Terms.
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14 Sep 10 Underwater Mortgage Relief

Attention homeowners who are struggling with an underwater mortgage – - – good news may have arrived.  HUD recently announced a new mortgage relief program that targets distressed homeowners who are trying to refinance a mortgage but have been unable to qualify because of negative equity.  The Emergency Homeowner Loan Program was developed to assist borrowers who have been able to pay their mortgage on time, but unable to refinance because their mortgage is greater than their property value.

In the recent past, the Obama administration has attempted to help the struggling housing market but most of mortgage relief initiatives have failed. Refinancing underwater mortgage loans has certainly become a common challenge that thousands of homeowners appear to be ready to embrace.  This new FHA program which started last week is often referred to as the FHA short refinance because the 1st mortgage balance is written down to the present market value, thus “short refinance.“

This refinance relief program was created to help to borrowers with underwater mortgage liens refinance into reduced principal mortgage loans. The maximum amount allowed to be forgiven is 10%. To help facilitate the news refinances, the U.S. Treasury has pledged to offer incentives for existing second mortgage liens who agree to “full or partial extinguishments” of the liens.  So, this new FHA plan that is boasting to help 1.5 million homeowners has me a bit concerned.The major obstacles most borrowers are facing are that their present mortgage lender has to agree to write off at least 10% of the principal balance on the 1st mortgage lien.  Like some of the past loan modification and FHA Secure programs, this mortgage relief effort is voluntary in nature and requires the consent of both first and second mortgage lien holders.

The government has placed aside $14 billion in TARP funds to help support this new program. But the question of the foreclosure day is, “Will lenders and mortgage servicers cooperate?”  Qualifying for the Emergency Homeowner Loan Program or FHA short refinance may be difficult but the financial rewards are significant so we recommend that you attempt to get qualified.  Getting your mortgage balance reduced and your monthly payment lowered are two amazing feats worth striving for.

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