Starting September 7, 2010, the Federal Housing Administration (FHA) will offer a new refinance program to qualifying underwater homeowners. To be able to participate in the program you must be current on your home loan, your credit score must be 500 or above, and the home must constitute your primary residence. Further, all lien holders related to the property must agree to the refinance and agree to write off at least ten percent (10%) of the unpaid principal balance. As most borrowers know, lenders are loathed to write off any of the principal regardless of the possible incentives. The program does, however, offer more incentives beyond new FHA-insured mortgages. The program contemplates certain incentives for any second lien holders to provide a full or partial extinguishment of the lien. HUD says interested homeowners should contact their lenders to determine if they are eligible and whether or not their lender agrees to write down a portion of the unpaid principal. Keep in mind that the present loan must be a non-FHA loan.
Tisha Black Chernine, Esq.
