Those waiting to be rescued by the government from their mortgage woes may have to continue to wait.  A new mortgage rescue plan started today.  It is called the FHA Short Refinance and like so many of its predecessors, seems to have so many requirements and exclusions, it appears to be simply be more of the same.  Prior government efforts to assist troubled homeowners have roundly been considered failures.  The reason I continue to address each of these programs as they are announced is that while most people cannot expect to benefit, some will.  Yes, some percentage of those in trouble on their mortgage will find this program to be a solution.  There are two reasons that I continue to write about these programs as they are announced.  First, if by chance some of my readers do qualify, I want them to get this information as quickly as possible.  Secondly, for those that don’t qualify, I want them to realize that fact right away so they can make whatever tough choices that need to be made.

The FHA Short Refinance Will Not Work For You If…

• The property is not your primary residence.
• You are currently behind on your mortgage.  Unlike prior programs, this one is only for those that are making their payments on time.
• Your loan is held by Fannie Mae and Freddie Mac.
• Your bank is not willing to write off at least 10 percent of your negative (must agree to reduce the loan balance by at least 10% so that the new loan is no more than 97.75% of the home’s current value).
• You have a second mortgage (unless the second mortgage also goes along with a series of requirements including forgiving any amount that is required to meet the above loan to value ratio).
• You do not meet FHA standard underwriting guidelines.  This includes meeting all ratio, credit score, and income requirements.

Frustrated?  I am too.  I just wish that one of the programs would really help the masses, but that has not happened yet.

What To Do If You Want To Find Out More And Attempt To Qualify

Whether you can qualify or not will be almost entirely determined by your current mortgage company.  The first step would be to make a phone call to your mortgage company and ask them about this program by name.  They will likely have a stack of paperwork for you to complete.  Banks may be more motivated to work with you if you qualify for this new program.  This is because at the end of the process, your loan is moved off the books entirely.  The new loan from the FHA will pay off your existing loan, freeing up new money for the bank to lend.

Rumors Of Mortgage Debt Forgiveness

A rumor is circulating that the Obama Administration may announce yet another new program before the November elections.  The program may include the government forgiving the amount people owe in excess of their home’s value on Fannie Mae and Freddie Mac mortgages.  I don’t have anything on this to report today, but we are looking for any more information on this than the article that appeared in the Daily Caller.

We continue to see a great deal of interest in our own mortgage modification kit which is available for just $49.95.

Helping you make the most of God’s money!

James L. Paris
Editor-In-Chief ChristianMoney.com 
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