UPDATE 2/29/12: Fewer than 400 FHA Short Refis were completed in fiscal year 2011. I wrote an update about the continued struggles of this program that you can find here.
UPDATE: 5 Major Lenders have announced that they are participating in this program.
UPDATE: On March 10, 2011, the House of Representatives voted to kill the FHA Short Refi Program. The bill is not expected to pass the Senate, and if it does, the president is expected to veto it.
UPDATE: On March 3, 2011, the House Financial Services Committee passed a bill that would end the FHA Short Refi Program. As the situation changes I will do my best to keep you up to date.
A few weeks back, the FHA rolled out its new Short Refi Program (click link for complete description of the program), designed to help refinance the mortgages of borrowers who are underwater on their homes. The FHA estimates that the program could help between 500,000 and 1.5 million borrowers. At the time the program was announced, I was skeptical that it would work, and I still am, chiefly for one reason: it requires the lender to voluntarily write off at least ten percent of the unpaid mortgage balance. The reluctance of lenders to participate in these programs is a clear pattern, which is why I continue to advocate for mortgage cramdown legislation.
Thus far, we have not seen government programs that require voluntary lender participation to be very effective. Well-intentioned programs like HAMP, HARP, and HAFA have all fell short of their goals. We still have a huge ongoing foreclosure problem in this country. I don’t want to lump the blame totally on lenders and government programs. Some borrowers who are in foreclosure are in untenable situations that are at least partly of their own causing, and are unlikely to be helped by any government program. By the same token many borrowers planned and purchased responsibly and are still having problems keeping their homes. A quarter of U.S. homeowners with mortgages are underwater on their properties, and many of these are in danger of foreclosure.
So far I have heard from a number of people who tried contacting their lender about the FHA Short Refi program. I have yet to hear from anyone who has had any success getting their mortgage modified under this program.
If you have attempted to utilize this program, I would like to hear from you. Is your lender participating? Did they say why or why not? Did you make any headway in getting your mortgage refinanced through this program? Let me know in the comments section below.
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CAS
September 22, 2010 @ 12:27 pm
I tried and my loan servicer (US Bank) says my loan owner (freddie mac) will not participate in the “fha short refi”. I’ve read that Freddie mac may participate at a later date, but I believe they are just saying that to string people along.
I should have qualified for hamp, since a reduction of income now makes my 3k a month mortgage eat up nearly 50% of my monthly pay, which is clearly more then the 31% required by hamp, but I was denied for hamp because they said I’m not in “imminent danger of default”. The fact that my 360k mortgage is 200k underwater should be enough of a case for imminent danger. Oddly Freddie Mac doesn’t consider a drop in income a valid reason for a mod. They have four reasons, death, divorce, separation, or medical bills. Then at the end of their letter they claim that they comply with the “fair lending act” and can not deny someone a loan based on age, race or marital status! WTF! Why do I have to be divorced to get a mod then? Sad thing is I actually would have been happy with the standard mod, of a 2% interest rate for 5 years, and then up 1% a year until your at todays rate. I would have still been underwater but my payment would have been cut nearly in half, and I would have had twice the amount going toward my principal then I do now at 6.875%. Less money for the bank of course. At this point I don’t care anymore. I will walk away next year. I’m in CA its no recourse and I have no 2nd to worry about. All of these programs are a joke and only help delay things for the banks so they can keep inflated books and pay their bonuses. After we walk we dont plan on ever buying again, we will rent and hold onto our money instead.
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Jeremy Reply:
December 12th, 2010 at 3:32 pm
If you haven’t missed any payment still. I can help you get that short refi. I have a different technique to get them to participate with FHA Short Refi program.
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Craig Reply:
December 18th, 2010 at 10:53 pm
So what can you do? I recently contacted someone, waiting to hear from them. I meet all the requirements for the short refi program.
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John Alvarez Reply:
January 16th, 2011 at 12:23 pm
Hi:
Which technique do you have to have banks to participate in the FHA Short Refinance Program? I am very interested. Please let us knom
Thanks
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Patty Reply:
May 2nd, 2011 at 7:47 pm
Jeremy, give me your contact info. I am interested in speaking with you about the FHA Short Refi. If you can help, I’m in!
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Rusty Reply:
March 8th, 2011 at 6:03 pm
I am doing FHA Short Refi’s call me for more info. It’s a process that I will explain to you.
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Sharon Reply:
May 17th, 2012 at 1:40 pm
Are you still doing FHA Short Refinance’s ?
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Rusty Reply:
May 3rd, 2011 at 6:21 pm
Call me – I can help you – Rusty Stearns Lending, Inc.
909 895-6905
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Nick Turner
September 22, 2010 @ 1:59 pm
I called my lender today (Bank of America) and I was told that Bank of America hasn’t decided whether they want to participate in the FHA Short Refi program, and they directed me to their Making Homes Affordable website.
I am the perfect customer for this FHA program and would love it if my lender would even consider it, but unfortunately they are not.
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Sandy Reply:
September 30th, 2010 at 10:45 am
Yep, same here. BoA said they are not participating. I’m perfect candidate for this program….
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Marybeth Reply:
October 1st, 2010 at 8:39 pm
Same here with BOA. I came to this site looking for a lender that participates. Sounds like all banks are leary of this program because they will be taking a big hit if so many qualify for mortgage reduction. It is the only fair thing to do for the underwater Mortgage holders and the economy but there is no incentive for the lenders. Maybe thats what they are holding out for.
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Kalyan2010 Reply:
October 28th, 2010 at 11:01 pm
I called bofA last week too and forget answering about whether they are participating or not in this program they were totally unaware of this program…. i got transferred from refi dept to loan modification dept to some other dept and then finally to the customer service who were clueless about this program and suggested i talk to HUD counsellor (no thanks !). i forwarded links about this program from hud website to this person asking her to enquire and get back to me…and as expected no reply. I even asked if i could talk to their supervisors or anyone in the company who can talk about this…and the answer is they cannot do it and said even the supervisor also would give the same answer….how lame… i cannot explain as to why the folks who work in these top financial instituitions and whose day job is this about mortgages give such lame answers. Talk about Bank of Opportunity
Matt Reply:
November 2nd, 2010 at 12:28 pm
Add one more for Bank of America.
I have written short refinances for my clients as I am in the mortgage business. (I didnt write 1 subprime or neg amortization mortgage)
I called about the short refi program and knew I needed to talk to loss mitigation to see about a short payoff before doing anything. After being transferred around for 2 hours I finally got to the right department and they said they didnt do short payoffs for refi’s. Only Shortsales.
So I called the refi department to see about the hasp loan. I do not qualify for that since my loan has lender paid MI.
I was then transferred back to the mod department who said they can not modify my loan since I qualify for the hasp loan. When I proceeded to tell them that they just told me I couldnt get that with my loan she didnt want to hear it and just kept repeating. “thats the only program you can qualify for.”
Bank of America, what a joke. Quick to take the government tarp funds (our tax dollars) when they needed it but not so quick to help out the people they borrowed from.
Finance with someone else if you are buying or refinancing!!!
jen Reply:
November 4th, 2010 at 10:16 pm
ditto, BOA, could not do HARP because of LPMI and would love to do a refi, but underwater. Particularly annoyed becouse BOA strung us along with “phase 2″ is just around the corner (meaning those with LPMI) until we were too far underwater…if i had enough $ i would pay just to get away from BOA. They are evil.
Matthew Reply:
November 17th, 2010 at 4:27 pm
Yes, I am one of the many responsible homeowners that is paying the price for not defaulting. Instead, my savings account is empty, but I am current on a house that is worth less than my loan and BOA says…NAH, we’re not participating…
The program is perfect for people like me, but the banks won’t help us because we are in no danger of defaulting according to their standards… As usual, they are worried about their books, not the welfare of their customers…
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Cate Pett
September 22, 2010 @ 2:27 pm
hardworking people willing to pay their debts if they could see some light at the end of the tunnel.
I don’t care about the principal reduction. I would be happy with a reduced interest rate (currently 6.75) that would lower my monthly obligation. That would be a win in my books.
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Doreen O'Kane Reply:
October 17th, 2010 at 4:50 pm
Cate,
I am 100% with you on that one!! That’s all I am looking for too. Re-write it for a lower FIXED rate and don’t charge me to do it. Or just charge nominally. No impact on my credit either. Chances of the bank getting paid are much more likely under those circumstances. I’m a single parent, been unemployed for over a year. I would not even qualify for the loan I already have and have ALWAYS payed on time. People like us are the ones that need help. Could not get a loan modification because I was unemployed. So who exactly were then intended for? It’s not rocket science.
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Lawrence
September 22, 2010 @ 3:06 pm
No one at Chase can verify whether they will or will not join the program. So far, they haven’t even heard of it. Call them yourself, PLEASE. The really crappy thing is, when WAMU went under Chase bought them out for 1% of their assets. That means they bought my half-million mortgage for about 5 grand — and they flat out refuse to modify my mortgage. With a new job that pays almost half of my old one, and with a house that is worth exactly half of what I paid for it, I’m probably going to just walk away.
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Eva
September 22, 2010 @ 3:29 pm
I contacted out lender today (Bank of America) and the first loan officer I spoke to said B of A was not paticipating in the FHA program but that I qualified for MHA and sent me to another officer. The second officer told me she doesn’t know anything about an FHA program and that we didn’t qualify for MHA unless we brought $30,000 to the closing. I just want to refinance at a lower rate, keep my home, and save some money each month…that’s all. Then, perhaps, I can put some money into my children’s educatuion….not now. THanks for nothing.
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Michael Kraus Reply:
September 22nd, 2010 at 3:46 pm
I appreciate everyone’s comments very much, please keep them coming. Nothing I am hearing has changed my mind about this program, but I would really like to see if we can find at least one borrower who has been able to use this program.
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Kelli Reply:
October 9th, 2010 at 10:51 pm
Hi,
I am fotunate in one aspect and that is my current lenders are eager and willing to allow a “short refi”. They are a small real estate investment partnership(just the two) who were the third lender to purchase my mortgage in the last 2 years. I am aware of the “Blanket” sales and purchases on mortgages where the buyer is paying anywhere from .40 to .80 on the dollar. MY lenders would be money ahead to work with me on a short refi rather than to pay all involved in a forclosure.
As of yesterday, I was faced with te fact that the mortgage lender I have been using for my refi SCAMMED ME.
He has ripped me off for $1,400.00 and as of last Monday, I was qualified, ready to go on this and e would be calling my current lenders on Tuesday to negociate the short pay balance. Once that was done, It would be done before the end of this month. He even spoke to my current lender at one point already. Since then all phone calls go unanswered. His voice mail is full and will except no more messages. In one day of investigating this guy, amungst many other complaints and reports filed very simular to my story, I found through an online news paper in his city that he was arrested a week ago for aggrevated Battery on a tenant that he was trying to evict. She was pregnant.
So now I am just days away from my mortgage payment doubling and I am back at ground zero searching for a lender. If you know of any, I am in need ASAP! If I make this happen, I will post my results.
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Jeremy Reply:
December 12th, 2010 at 3:46 pm
As a mortgage broker he should have never taken any fee from you to do this process. His fees would of been charged with the new loan and rolled into the new loan. The only fee my clients pay is the appraisal and they pay that to the appraiser directly.
Jeremy
Brian Chojnowski Reply:
October 28th, 2010 at 6:35 pm
I have not been able to find an article online verifying that anyone at all has been able to use this program. BoA has not made a statement say they refuse to participate, but they have had 3 months now to figure out a policy for it and have not done so. It sure feels like a “maybe it will go away if we just don’t say anything”.
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Renee
September 22, 2010 @ 4:08 pm
I too, like the others called Wells Fargo and told them I was interested in the FHA Short Refinance…the first rep I got said “let me transfer you to that department”. Once I got transferred I was asked my salary, a guesstimate of the value of my home, etc etc only to be told that Wells Fargo had no details on if and when they would roll out the program. I am current on my mortgage..meet the credit score and all I want is a fair chance to ever have equity in my house. They need to roll out this program before I roll out of my house. #losers
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John Reply:
October 21st, 2010 at 9:42 pm
I called Wells Fargo on October 18th to ask about the FHA Short Refinance program. It was almost comical. Nobody knew anything about the program. I was transfered 14 times and my call was mysteriously dropped twice. How is it that I know more about the program than people working for one of the world’s largest financial institutions?
I personally believe the only way that this program will succeed is if mass Media starts asking questions (like this website/blog has) regarding why the government spends tax payer money working on a program for months with the large banks and makes promises that it will help 1 million people and after the first month, not even 1 FHA short refinance has been approved.
Calls from individual borrowers will continue to go on deaf ears until the mass Media gets involved. Television, newspapers, internet, etc. Media pressure will get the banks and the Government to respond and take the borrower seriously.
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Blake Reply:
October 28th, 2010 at 12:10 pm
I couldn’t agree more. I also called Wells Fargo in September 2010 only to be told that they were going through “Everyone’s” loans to see who would qualify for this program and they would give me a call in a few weeks to let me know. It’s now almost the end of October and no call yet. They knew of the Short Refi Program when I called but said they were still setting up the guidelines. How is it that the general public know more about this program than one of the world’s largest (bliking) I mean banking instiutions. Why is the Federal Gov’t. not making this a mandatory program and forcing the banks to “Help” not continually screw over the people.
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Kelly Reply:
February 16th, 2011 at 11:55 pm
Wells Fargo is currently doing the Short refi programs on the Wachovia pick a pay loans that have been modified through Wachovia. The problem is that most people quit paying their credit bills and have derogatory credit and repeated history of default. The underwriting guidlines for this program outside of the writedown at close are all the same for all fha purchase or refi loans.
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Keith Reply:
March 10th, 2011 at 9:48 am
I have a home equity first underwater with Wells Fargo.Payments current.High credit score.how do I get a short refi?
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Carol
September 22, 2010 @ 5:03 pm
Bank of America has new website they direct you to: homeloanhelp.bankofamerica.com.
which tells you they are not participating at this time.
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Mark
September 22, 2010 @ 5:26 pm
I called my mortgage servicer Chase #u(k1n& Bank and they stated that they were not sure if they would participate in the program. I have a 6.625% interest rate and I am upside down by 100K! I applied for Mod twice but I make too much money. I guess the 3800 mortgage is nothing. Just wanted to refi so I could lower my interest rate. Credit score is 750+ and I offered to bring in 45k that I could access by borrowing against my retirement. The rep told me that the “investors” on what was a previous WAMU loan were not willing to play ball when you are current. I am about to pack up and leave. The investors will lose nearly 900K if I walk. Screw the banks like they are screwing us.
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Suraj
September 23, 2010 @ 12:02 am
I tried contacting my lender CitiMortgage several times in past couple of weeks. At first the consistent reply from the reps was the Citimortgage has not decided whether to implement FHA short refinance or not. After persistent efforts , one of the reps told me last Friday (09/17) that Citimortgage has taken a decision NOT to implement it. I guess other banks will follow suit. What I don’t understand is why Govt. has proposed such a program which is destined to be a failure. Who would be willing to write off 10% of the principal if the mortgage is being paid regularly.
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Mikey Reply:
September 23rd, 2010 at 6:58 pm
These programs don’t work for homeowners because they were never meant to. They are strictly designed to help the banks stretch out dumping their bad assets. Create false hope so we all don’t bail at once. The government only cares about the big banks, not you and me. After all, we didn’t pay for their reelection campaigns – Chase and BofA did. If we allow home defaults to trickle on endlessly, we’re in trouble. If we say ‘Adios’ and walk away en masse, the banks are in trouble! Time to quit paying, stay in your house for as long as possible, and send the banks and our corrupt government to financial hell!
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norma
September 23, 2010 @ 1:30 am
I wonder, If they say that help in the way by Sep 7, and today is Sep 23, and banks have not made a decision, since when have they been working on this new program? what are they waiting for??? maybe they will come up and say “not enough homeowners have applied” everything is a big lie……..
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Captain Barnacle
September 23, 2010 @ 1:09 pm
Wells Fargo told me that they are not yet participating in the program. This was about a week after it’s rollout.
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Gary
September 23, 2010 @ 1:23 pm
I got in touch with my lender GMAC to ask about this ‘short refi program’ I was told that we must apply for a refinance and after the refinance amount is determined, then the lender must go to the investor(s) for approval on taking less than the original mortgage amount.
The program is utterly ridiculous for two glaring reasons:
1) You must be current on your mortgage paymenst. Now if you are current, why would the lender reduce your principal ? Duh !
2) The program is voluntary. Banks have no incentives to help homeowners, and with very few exceptions the banks have not helped. Matter of fact, August saw 100,000 foreclosures. This was the highest monthly amount since RealtyTrac began tracking foreclosures in 2005.
Unfortunately, the short refi program is illusory. Another program met with deafening silence from the banks.
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Carol
September 24, 2010 @ 11:47 am
The investor excuse is a scam. who are the investors? It is you and I. The diced up loans are held by retirement funds, and multiple investors. They do not have a way to contact everyone that has invested in mortgages. The banks are one big collection agency, and making these decisions on their own, in their own best interests. I bet the people of the USA that have investments, that include these mortgages, would rather take the hit once,right now, and start moving down the road. But thats not how big collection agencies make their money. otherwise, I would say, why doesn’t President Obama have a nice meting with the investors, and “strongly” encourage them to take the loss now, and let the economy start moving.I agree with Mikey, let them all fail, move your savings to Credit Unions.
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Jason
September 24, 2010 @ 2:14 pm
I also got a stone wall from Wells Fargo, and that was only the first hurdle, since my loan is owned by Freddie Mac, which also is not participating. I’m not seeing any bank participation in this program yet. My house is at least $100 underwater, and I live in Nevada, where the signs of any recovery are years and years away.
What good is a program in which no lenders will participate?
Thanks for helping out the middle class, banks. The banks will have more to lose when those of us who sought help and didn’t get it just give up and walk away.
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Julia
September 27, 2010 @ 1:41 am
I’ve called BofA twice, both times the reps had no idea what I was talking about. Really??? It’s the business your in. Listen to the news. Read the paper.
As far as I’m concerned, this is one more attempt by the government to keep underwater homeowners hanging on. Every time they release a new program, there is a lag time of about 6 months before it’s implemented. Then there’s additional lag time before the banks acknowledge that they even know what the program is or if they will participate. It’s the ultimate dangling carrot.
Voluntary program after voluntary program. What a joke. There’s no help coming.
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George
September 27, 2010 @ 10:18 am
I called my mortgage company, CDA (Maryland department of housing and community development) and they said they are not participating and that they are not even talking about it anymore. If a state run program whos goal is not even to make a profit, isnt willing to participate then how does the federal government think they will get private banks to participate? I am the perfect candidate for the program and meet all the criteria. At this point I cant see how even one person will be helped by this program. The banks are not going to write off principal for people that are making their payments with no incentive. Its just a ridiculous concept. Im upside down by about $60k right now and I cant see how I will ever be about to move out of this house. I can make the payments no problem because I didnt over spend, but I want to move and I cant because I am stuck in this god forsaken house.
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bucky
September 27, 2010 @ 11:42 am
My credit union said they were not currently participating but would let me know if they ever do.
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Renee
September 27, 2010 @ 1:56 pm
I guess we need to wait until October 4th to call all of our lenders back. Looks like they have a deadline of October 3rd to participate or not
“To facilitate the refinancing of new FHA-insured loans under this program, the U.S. Department of Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens. To be eligible, servicers must execute a Servicer Participation Agreement (SPA) with Fannie Mae, in its capacity as financial agent for the United States, on or before October 3, 2010.”
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George Reply:
September 28th, 2010 at 1:02 am
I would like to know if even one lender has agreed to participate. Like we have all come to realize, there really is not incentive to help people that are still paying. It’s really a shame this program isn’t going to work. It would have changed my life and others so much. It breaks my heart to think that their was a program that existed but no lenders participated. I just want to be able to sell my house and move on with my family to a nicer house in a better area. I make way more money now than when I bought the house in 2006 and the mortgage is only around 10% of my income. Unfortunatley I can’t sell it for what I owe so I’m stuck indefinitely. Even a refi to the current rates would open up a lot more options for me. The responsible buyers really took the beating for the irresponsible ones that caused the housing prices to skyrocket and then plummet.
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Carol
September 28, 2010 @ 11:52 am
I believe they have until June 11, 2011 to participate. Most of the banks have signed a SPA, during the HAMP agreement program.
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Blorg
September 28, 2010 @ 2:48 pm
Lenders aren’t participating. Why should they? It’s voluntary and they just lose money. I called my lender (ING Direct) and they made it clear that they do not participate in any Federal programs.
They didn’t seem to mind taking a bailout, though. While they are a Dutch company, they took 10 billion dollars from the Dutch government
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RS
September 29, 2010 @ 2:08 pm
Same story. CitiMortgage is not participating. It is becoming very frustrating now.
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Rusty Reply:
March 8th, 2011 at 6:43 pm
Chase is participating – I am in the FHA Short Refi business – contact me for more info.
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RS Reply:
March 8th, 2011 at 9:29 pm
How is chase participation can help citimortgage customer?
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Dennis Hultz Reply:
March 18th, 2011 at 5:55 pm
is there a number that i can call to talk to soeone about a chase fha short refinace?
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Larry F Reply:
December 22nd, 2011 at 10:22 am
Can you provide me contact details for yourself and chase ?
I have a chase mortgage 100K under water and am interested in this program.
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ash
September 29, 2010 @ 6:22 pm
Below is exact quote cut out from my email back and forth to Chase. It is classic how they selectively appraise homes. They actually appraised my home over what I paid for it 3 years ago!!! They think we are stupid… EVERYTHING IS UNDERWATER..
Chase guy:
“Not a single bank has approved a loan through the FHA short refinance program, but Chase is the only bank that has taken applications. We have taken a total of 16 applications under the program as a test and the are currently in the process of being underwritten directly by HUD. I don’t understand how this would help your situation though, your home is not underwater form what I remember.”
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Dennis Hultz Reply:
March 18th, 2011 at 5:58 pm
mine is underwater, i am current have a high credit rating and..am purfect for this program, all the numbers fit …
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Cos
September 29, 2010 @ 7:24 pm
I also talked to BofA countless times about the short-refi and most of them have no idea what I was talking about. Keep on transfering me around with no answer other then they still evaluating the program. What a joke, I have nothing to do with the banking industry yet I know more about these programs then the people working at the bank. It’s a shame. We are just going to walk away most likly as I’m tired of dealing with BofA. I’ve been trying for over a year and every time is like talking to a robot. Just the relief of not dealing with them anymore will give me satisfaction, I had enough.
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Logan
September 30, 2010 @ 12:21 am
Little known fact, those who currently have an FHA or VA loan may be eligible for a No Appraisal, No Income Verification refinance. They won’t get 2%, but under 5% fixed or under 4% for 5yrs. I agree, nowhere near enough is being done to help, the bulk of the programs only marginally assist a small few, and the guidelines/restrictions are completely void of rationale. But the no appraisal option for current FHA loans really does help quite a few.
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Michael Kraus
September 30, 2010 @ 10:57 am
I just want to thank everyone for the insightful comments. It really helps to illuminate the shortcomings of these programs. Keep the comments coming, I intend to excerpt some of the better ones for an upcoming post.
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Colin
October 2, 2010 @ 7:35 am
I submitted an inquiry via Wells Fargo’s website and received this response on Oct. 1st:
“Thank you for considering Wells Fargo Home Mortgage for your financing needs.
We received your inquiry regarding the new FHA Short Refinance program. Wells Fargo Home Mortgage is still in the process of reviewing the details of this program. No decision has been made yet on whether this program will be offered and who will be eligible. We do not have a timeframe available.”
This was followed by phone numbers to speak with a mortgage consultant for refi questions or a counselor for payment problems.
My hope is that mortgage companies will take notice if we keep asking about the program. Ask your friends and family to call their lender!
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Fadel
October 2, 2010 @ 11:52 pm
I purchased my home in 2005 for 990K with a 7 year arm and 250K down payment. My home is now worth 500K. I have called my mortgage service Indymac or now Onewest numerous times to inquire about refinancing into a fixed mortgage to no avail. Earlier this year, the FHA short refi program gave me hope and I continued to make my payments on time. I have called Onewest a few times in the last couple of weeks to determine whether they are participating in the FHA short refi program. What’s amazing is that every customer service representative I spoke to have never heard of the program. Finally, I spoke to someone two days ago and they confirmed to me that they are not participating in the program. Of course, I do not quality for any other program because I have been current on my payments and I actually could afford my home. What a shame! This is starting to piss me off and I am now getting ready to walk away from my home. I think Obama borrowed the same finance idiots from Bush.
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needhelpincawithahmsi
October 3, 2010 @ 2:44 pm
Called AHMSI on Friday Oct 1st and they said they knew nothing about the new FHA Short Refinance program program and that they are not participating at this time.
AHMSI only allows you to contact CSR’s in India which makes calling them for anything very problematic.
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Gina Pogol
October 5, 2010 @ 6:55 pm
I too was skeptical about this program and wrote about the drawbacks in my FHALoanpros blog and also for HSH.com. I have yet to see a list of participating lenders (unlike HAMP) nor has there been any release of statistics showing the number of applicants and approvals for the program. My theory is that this and other programs are just examples of politicians trying to make it look like they are on our side while avoiding inconveniencing the folks they really work for — banks pushing mortgages and credit cards.
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Erica
October 7, 2010 @ 1:03 pm
An independent loan officer I’m working with has said that no banks are participating in the short re-fi program. She said that as with many of the other programs, it takes anywhere from 6 -12 months and lots of people to raise a stink about it before the banks begin to participate. What I don’t understand is this: The banks write down ~10% (in my case, ~60K) as a loss, but if I ‘strategically default’ or short sell my home, they stand to lose upwards of 200K. It makes no business sense to not participate in this program when the alternative to walk away is always there.
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Kelli Reply:
October 9th, 2010 at 11:02 pm
I am in agreement with you there. The cost for a lender to do one foreclosure averages $40,000 to $60,000. on top of the loss of the loan to value, you would think they would be pretty eager to work with homeowners on a short refi.
Maybe I’m just not smart enough to understand the world of business and financing. I’m just a simple girl. My current lenders are willing and eager, I just have to locate a new lender to finance me. No luck there yet.
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David
October 8, 2010 @ 2:27 pm
Spoke with Wells Fargo several time over the past three weeks about this program and during the latest call yesterday was told that they would not participate. The loan advisor went on to lecture me about being responsible and that I had signed a promise to pay. Now I don’t know about you folks, but I’m 65 and owned many homes over the years and have never missed a payment. I am current now even though I’m upside down by $80-100k. I really did not like being lectured by the very people who had a big hand in causing this mess to start with.
Many owners in my area are stopping their payments and some have lived that way in their house for over a year and then simply move out prior to eviction. One man had the nerve to telll me that the $40k he saved by doing this enabled him to buy another house in the same area.
Is this a great country or what. Those “players” who game the system and the banks who allowed this mess to start with are the winners. Those of us who pay our bills and keep this country afloat are once again the losers.
Maybe the earlier writer is correct in suggesting that we simply stop and see how it works out for the “hope and change” crowd.
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R Reply:
December 28th, 2010 at 4:59 pm
David: I fully agree with you. I am in the same boat as you are. I am current and I am upside down. I see many of my neighbors who walk out are benefitting while we who are responsible are losing our money.
Also, when I called Wells Fargo about FHA Short refi, one guy lectured me the same. I am sure he is one of those crooks who is gaming the system and benefits out of it. I think it is a strategy on the part of Wells fargo to intimidate people (who are current) not to bother calling about FHA Short refi.
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Zia Khan
October 10, 2010 @ 4:59 pm
I have a first and a second, both are Wells Fargo. Am underwater about 80 to 100K. I am current on both, meet all other requirements of the so called short refi program. Called WF on Friday to inquire about the short refi program. Was advised they are in the process of reviewing the requirements. Sounded like they will offer it. But maybe it is my desperation putting a positive spin on it! If no major lenders offer it, then HUD should fire the person who came up with the program in the first place as it is playing with people’s emotions who are vulnerable, people who have played by the rules and have not resorted to jingle mail—-at least not yet!
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jack
October 11, 2010 @ 4:02 pm
You would think it would be in the banks best intrest to lose less money with a short refi as apposed to a short sale or reo where they also have to pay 6% to a realator. The banks are in far worse shape than they let on. They are going to come looking for the American taxpayers to bail them out again. Write you congress/rep and tell them no more bailouts the banks are making this worst by giving people the run around. Tell your congress/rep to approve mortgage cramdown. The banks are lying and cooking the books so their execs keep getting huge bonuses. This is gonna be worse than enron.
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Donna Morton
October 13, 2010 @ 12:57 pm
Im a loan mod consultant & mtg broker in orlando – spent an hour on the phone trying to confirm w/boa – no one knows anything – they are indeed clueless; finally spoke to a supervisor that said they are not participating; got transferred to home retention dept re principal reduction – would need to call and apply verbally updating financials; just know if u decide to do this yourself having too much or too little money or expenses can disqualify you.
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Julian
October 16, 2010 @ 1:42 am
Let’s face it,Obama’s mortgage programs are a joke. I called my lender about the short refinance program and they had no idea what I was talking about – it probably didn’t help that I was probably talking to someone in India. But that’s another discussion.
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Susanna
October 21, 2010 @ 10:36 am
I emailed my loan officer at BofA about the shor refi program, twice and got no response. Long story short, she is a personal friend and has always answered my emails. I called Lending Tree to see what they had to say, the expert mortgage consultant didn’t even have the parameters of the qualifications right. I called a local mortgage broker, left a voicemail and got no response.
Their is no incentive for the lender to make these loans. There is no reason for a loan officer to take a package, spend any time on it, there are no lenders participating. If Fannie and Freddie are not participating, no lender is going to. They will only start to look at this if as they say “it makes sence”. They will only do this if and when the strategic default situation gets out of control. And it may.
The people looking at this short refi are the banks best customers. Look at all the responses above. High credit scores, making the payments on time. What happens if all of you decide “it makes sence” to walk away? Not only would we have the current foreclosure situation with borrowers unable to make their mortage payments, then we would have a new massive wave of borrowers able to make those payments, but no longer willing to. A showdown. Who wins? No one.
What is this program? Only there for the banks if the strategic defaults get out of control?
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Vicki
October 30, 2010 @ 10:11 am
I have a question and if anyone has an answer, I would welcome it: Isn’t the reason the lenders don’t participate in these voluntary programs because they are going to file a claim and collect from the private mortgage insurance if the loan defaults? I’ve read that some mortgage insurance companies are assisting borrowers in working out principal forgiveness because it is ultimately going to save them from a larger loss. How do you find out who the mortgage insurance is with and the amount – I’ve read it can be 20-50% of the loan amount? Seems the lenders, when they wrote the loans, were in a win-win.
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needhelpincawithahmsi
November 3, 2010 @ 4:31 pm
American Home Mortgage Servicing, Inc. also told me my investor was Fannie Mae…anyone know why Fannie Mae would not participate in the HUD FHA “Short Refinance” program?
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Amy
November 6, 2010 @ 6:18 pm
My neighbor just did a successful short refi with Wells Fargo. We’re stuck with BofA. Argh.
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aw Reply:
November 19th, 2010 at 11:04 am
Dovenmuelhe is servicing our mortgage, and they work for NH Housing. No one seems to know about this program because they don’t want to hear about it. It’s like charity, this program. Perhaps HUD should choose a few banks to do it, those that can afford to take on these refinances. They can rotate banks, like one year have other banks do it, that way they’re equally providing something to the public, if you know what I mean.
Amy, I’m wondering if you could get it refinanced with Wells Fargo, though being underwater makes it difficult if you are transferring.
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R Reply:
December 28th, 2010 at 5:07 pm
Amy:
My Mortgage is with Wells fargo. I am a perfect candidate for FHA Short refi. When i contacted Wells Fargo (as recent as last week), I was been told the bank has not decided if they will participate in this Short refi program. Would you please let me know what number or who to call in Wells Fargo to participate in this program. I would appreciate if you can get that information from your neighbor and pass it on to me. It would be a lot of help. Thanks.
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Janet Hopkind Reply:
January 11th, 2011 at 12:49 pm
Amy, My mortgage is also with Wells Fargo. They are still giving me the runaround. Would you please find out how your neighbor did it and what agent they used and phone # to call. It would be a Godsend. Thank you, Janet
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Janet Hopkins Reply:
January 28th, 2011 at 9:47 am
Amy How did your neighbor get Wells Fargo to participate? What Ph# for Wells Fargo did they use? Thanks, Janet
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Dee Thomas
November 17, 2010 @ 9:24 pm
I have Wamu/Chase, 80/20 they are so hard on their paying customers. I have tried for a refi twice and sent over 60 pages of faxes for a modification only to be turned down because I had a little ove $6,000.00 in a saving/retirement account. I was asking for help as I was using these funds to pay my mortgage. They said to call back when you have spent the money. Well I did but they didn’t,
I feel is enough of us who have worked hard to be current write to All the major news newtorks, and to the White House FHA we may be able to get past the constant run-around. We vote for people and never hold them accountable for their promises.
I would be willing to start a petition for all the mortgage holders who are registered voters to say they will withold their vote in the next Presidential Election, if we don’t get a bail out. Chase is not here to help anyone except themselves. I hear they were/are owned by The Rockefellers
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aw
November 19, 2010 @ 11:11 am
If we could walk away or pay late we would. My husband is scaring me and perhaps it’s the best way in keeping us responsible financially, but is it really true? He says that because he works for the government as an apprentice at a shipyard he cannot default on his loans. He would lose his job without questions or reasons. Scary don’t you think?
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Sara
November 22, 2010 @ 7:47 am
I am set to close tomorrow on an FHA short refi with GMAC. Home appraised for 110k less than I paid for it and I’m getting a 4.75% APR with PMI…I am THRILLED!
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Wayne Reply:
November 26th, 2010 at 4:41 pm
Sara, could you please provide some specifics to your circumstances and how you went about this successful Refi. It is always nice to hear that there is still hope for some of us who have not heard anything back from our lenders yet!! How did you approach GMAC? What department did you speak to? When did you start the process? You get the picture. Hopefully your insight will help others like me to feel thrilled like you. Thank you !!!
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CARMEN Reply:
November 30th, 2010 at 1:08 pm
Congratulation Sara,
Please share: Were there closing cost? How much interest rate? How long did the process take from filling the application to closing?
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Kris
November 30, 2010 @ 9:02 am
I have a close friend who also managed to do a short refi through GMAC. He called to inquire about a regular refi and they are the ones who offered this option, he wasn’t even looking for it. Must be nice huh? I have BoA so am screwed like many others.
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Isabelle Reply:
November 30th, 2010 at 12:54 pm
I just spent an hour on the phone with GMAC inquiring about a Short Refi. I was transferred ELEVEN times and all I was told is that I don’t qualify for a loan modification, which I wasn’t even inquiring about.
Then they told me my loan was secured by Fannie Mae so no Short Refi for me. Then I called Fannie Mae and they said the ARE participating.
I would love to know who your friend spoke to or worked with at GMAC. They may be the only competent person in the entire corporation.
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ollie Reply:
March 4th, 2011 at 10:42 am
I was told by a lender that you do not have to use your current lender to do a short refinance. You can use any lender that participates and is willing to take your current loan
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Anastasia
December 26, 2010 @ 3:44 pm
Been calling Wells Fargo since 9/8/10…continually get the runaround. Current on payment but interest rate is 6.125 and my condo is $40,000 underwater. Want the interest rate that other good borrowers are entitled. Without a rate reduction, seriously thinking of stopping payments but uncertain of the legal ramifications in NJ?? Can anyone give guidance??
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Danny
December 28, 2010 @ 12:23 pm
Did some current research on this excellent discussion…
Wells Fargo continues to state that they are unsure whether they will launching the program. I have been unable to ascertain whether there are pilot applications being taken. My next step is to identify a top performing FHA loan officer in a Wells Fargo mortgage branch.
Chase states does not participate either; same as WFHM above.
GMAC Mortgage does provide this loan option, but only to clients they service. Because my loan is serviced by WFHM, I am not eligible.
I have not discovered whether the FHA Sort Refi is available through a non-servicer… in other words, must I wait until my loan servicer offers the program? Is it theoretically possible for me to work with a loan officer from a different company that specializes in FHA Short Refi?
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Anastasia Reply:
December 28th, 2010 at 9:46 pm
Danny,
I have been unsuccessful in my attempts, so if and when you identify the elusive top performing FHA loan officer,
please reveal his/her identity.
Thanks!!
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Rusty Reply:
March 8th, 2011 at 6:40 pm
Anastasia,
I am in the FHA SHORT REFI business. If you contact me I will explain the process and help you out.
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Anastasia Reply:
March 9th, 2011 at 12:59 am
Rusty,
Please give me your email address.
Thank you!
robert benedetto Reply:
November 9th, 2011 at 1:58 pm
Can you assist with citi mortgage who says we dont qualify. Im current on all payments and underwater about 100,000 dollars?
Sharon Reply:
May 17th, 2012 at 1:46 pm
Rusty,
I have a mortgage with SPS who is saying they will except less but I can’t find a lender that will participate. Can you help?
Jon Cross Reply:
May 2nd, 2011 at 2:46 pm
Your loan servicer has to agree to it since they are the ones that would be lowering your balance. A loan officer from another company can do the refinance for you but your loan servicer has to agree to it.
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Joseph Blosch
January 15, 2011 @ 4:48 pm
My parents are going through this process. The bank added on a 300 dollar payment as some sort of penalty as of a few days ago. The bank, my parents, and the company handling it are still in negotiation. It almost seems like the bank is using the penalty as an intimidation factor.
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Beverly
January 27, 2011 @ 4:56 pm
I have been calling a mortgage broker with wells fargo since 9/8 and have gotten the run around…i have been a wachovia customer for over 25 yrs and wells fargo for 10 and he flat out stated “we are not praticipating” i have had my house on the market for 4 yrs and nothing…2 calls that’s it…i can’t lower the asking price because i need every penny to pay off the 1st and 2nd mtg the 2nd is only $17k and the first $186K..it would not be a great loss whatsoever to get rid of the 17K for me and to lower my interest rate ont he balance of 186K no great loss at all..yet they will not even consider it then tell me that i can refinance but at 95% or something and 7K in closing costs…and i’d have to get PMI at $70 or so per month…kind of pointless.i don’t understand this at all…i pay my bills, i need to sell my house for a reason that is very strange but .. i filed a complaint a yr ago March about a mental health facility in my town that the staff were abusing the residents and since then have had repeated threats to me and my daugther (14 months old) my son who is 21 worked there and based on his info and about 8 other employees some former some current i filed the complaint with the state ..well they gave the main office my full name and the main office told the manager at this facility my name which was then told to everyone…i’ve had the police contacted and everything until these two men who beat mentally handicapped people actually “harm” me or something then there is nothing i can do..i thought the best thing would be to sell this house…and when i heard of the short refi program i was so thrilled to possibly get the amt i owe lowered so i could sell..so this has been a very terrible thing for my family … i’m just a simple working person who tried to do the right thing and this is what i’m dealing with now i even explained to the man i’ve been speaking to at the bank how important it would be to just get out of this house and he just said sorry … can’t help you…this is what you get for paying your bills and being a good person you get screwed! Thank you OBAMA!
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argneka
February 9, 2011 @ 9:01 pm
Hi,
HSBC said we can. I just need a lender. Anyone have a recommendation? argneka@yahoo.com
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Rusty Reply:
March 8th, 2011 at 5:58 pm
I do – I am doing FHA Short Refi’s – contact me for more info
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Patty Reply:
May 2nd, 2011 at 7:44 pm
Rusty, give me your contact info. I am looking for someone to help me with this FHA Short Refi program. It looks like going directly to the lender is a waste of time.
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Rolo Tomasi
March 5, 2011 @ 5:41 pm
I don’t care if they write off 10%, I just want to be able to refinance to a better rate but impossible since I’m underwater. I’ve never missed a payment and can afford the monthly payment, so what’s the incentive for the bank to work with me?
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Rusty Reply:
March 8th, 2011 at 5:54 pm
The bank is being reimbursed by TARP Money – you can refi with most lenders except B of A
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Rolo Tomasi Reply:
March 9th, 2011 at 11:44 am
Just talked to my lender, HFC Beneficial, and was told that they are not refinancing or lending any money at this time.
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RexCraigo Reply:
February 2nd, 2012 at 2:19 pm
There’s none, that’s the point.
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Rusty
March 8, 2011 @ 4:06 pm
I am currently ramping up marketing directed at the FHA Short Refi’s. The challaenge has been to educate the current lenders of the program so they can participate. The bigger challange has been finding a lender to fund the “New FHA Loan”. There are a couple of big banks that have agreed to fund these FHA loans. What I would like to know is, who are the 23 lenders that have agreed to participate in the write-off. My understanding is that there is 14B in TARP money to compensate the lenders for the write-off. Sounds like a win win for the homeowner and the bank. But now the Rebublican’s in the Financial Services Committee wants to kill the program before it even gets traction. If the public knew about this program – it would take off like a rocket – I intend to educate the public about this before it goes away. And fund as many as I can. It’s a great program for the homeowner, and a legitimate loan product to MLO’s like me who have been starving too long.
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Renee Reply:
March 10th, 2011 at 3:01 pm
I have my mortgage with HSBC and I am interested in doing this. How do I contact you?
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Rusty Reply:
May 3rd, 2011 at 6:15 pm
Call me at 909 895-6905 Office – Rusty
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John Reply:
April 25th, 2012 at 11:15 pm
Rusty,
I am a prime mortgage banker in WA, OR & CA and would like to know if you have a good contact for a short pay specialist at Bank of America & Home Street Bank. Please call me at your convenience.
John
206.226.6685. – Office
Megan
March 15, 2011 @ 8:32 pm
I have my mortgage through Wells Fargo and was told today that they are not participating the the FHA short refinance program. Does anyone know what lenders are participating? Is it possible to refinance through another servicer?
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Patrick
April 22, 2011 @ 5:07 pm
Contacted Aurora Load Services and was told they are not participating.
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Mike
April 26, 2011 @ 1:14 pm
I have a bofa loan. How do I get a FHA short refinance? they tell me they dont know of it.
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Mike
April 26, 2011 @ 3:06 pm
how can I contact Rusty?
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Jane
May 23, 2011 @ 9:45 am
I’ve been called by wells fargo saying I qualify for the “3 Step program to lower my interest rate/monthly payment or both. I am NOT under water. but they would use the original value of my house.
Anyone know anything about this?
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Lizz
May 24, 2011 @ 1:15 am
I tried to use the program and was told that my mortage company United Bilt Homes does not do any type of Government refinancing or restructure programs.
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chris
June 2, 2011 @ 8:08 pm
Has anybody worked with FGMC?
I am serviced by Rushmore loan management is anybody with them?
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Matthew Nappi
June 5, 2011 @ 12:27 am
I’ve called Bank of America regarding their decision to participate in this program and after talking to 10 different people, I was told they are not yet participating…contrary to the media’s reports…
Does anyone know when they will truly be rolling out this program?
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David
June 24, 2011 @ 8:09 pm
Who is participating? Seems like nobody is.
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Pyang Reply:
October 4th, 2011 at 4:09 am
I tried to the short refi with Citibank and they agreed to settle my 2nd mortgage for 60% of the loan. Didn’t think that they would accept, but they did.
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Lisa
August 4, 2011 @ 3:52 pm
Contacted GMAC’s Loss Mitigation Dept. (877 928 4622) & stated they do not participate in the FHA Short Refinance Program.
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Michelle
October 6, 2011 @ 4:35 pm
Called BofA today and again they are not offering this program. That’s really too bad since it would be perfect for me. Guess I’m stuck where I’m at. By they way, it took 3 phone calls to figure out it was not an option at BofA.
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Stacy
October 25, 2011 @ 3:29 pm
I tried a HAMP through my lender (CENLAR which referred it to Bayview) – missed it by 2% they say. So they suggested a HARP. Went to the HARP web site, selected a lender that said they would do 125% refis – contacted them, they said only for current customers. For new customers, they’d only do 90%. So frustrated, seeing the homes selling for so cheap with such low rates. What a sham. People who need it cannot get access to this funding that is supposedly there. I’ll bet the banks are keeping it. Is there a higher authority overseeing the programs that we can report to???
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Jamie
October 26, 2011 @ 11:35 am
I just read up on this program and immediately called my bank (Bank of America) and the mortgage rep told me that they are NOT participating in this program nor does he know of any lenders that do participate. False hope as usual if you ask me.
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Felix
April 2, 2012 @ 12:28 am
Any update on this thread? I have a loan with WF, I meet all of the requirements but can’t get them to budge. Anyone with any new info. Mrserrano1@msn.com
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tony
April 4, 2012 @ 2:39 pm
my servicer is sps, they told me if i can find someone to refi they will except less so they will do the short refi but i cant find a lender to fund the refi. has anyone heard of this prudent fundings. the claim to be doing the short refi. it seems like a scam but no one posted anything bad about them. antcon37@aol.com
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Sharon Reply:
May 17th, 2012 at 1:41 pm
I have a mortgage with SPS too and they also told me that they will except less but I can’t find a lender either!!
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DS
April 20, 2012 @ 2:13 pm
Just got off the phone with Wells Fargo. They told me they are NOT participating in the FHA Short Refinance Program. I told them plainly that if they do not work with me to re-negotiate my loan I will be pursuing strategic foreclosure. They told me there was nothing they could do for me.
The property in question is a condo in Orlando, FL bought in 2006 for $250,000, now valued at ~$100,000 with ~$200,000 mortgage balance.
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Alex Arce Reply:
May 18th, 2012 at 1:24 am
I was on the phone with WF HM Corporate Refi Dept approx 2 weeks ago regarding their participation in the FHA Short Refi program. According to them, there maybe some changes in this Federal Government program in June 2012 allowing for greater participation by WF . I will be checking back with them in June to see if these changes have been implemented
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Corbin
May 13, 2012 @ 1:55 pm
BoA is the worst. I went to the office and specifically stated I only qualified for the FHA Short Refinance program and not those that had a 31% maximum mortgage to gross salary ratio. The BoA officer then told me they had numerous programs fitting my qualifications. Then I received a letter from BoA stating I did not qualify for the 31% MHA program(s).Hugh??? Next I checked whether BoA was a participant in the FHA Short Refinance program and discovered they were not volunteers. The question are (1) why did the BoA agent waste my time?, (2) Will BoA become a participant with the December 2012 deadline looming to end the program?, and (3) Who is served by the March 2012 settlement when one must be at least 60 days delinquent on their mortgages as of Jan. 31 to qualify? Those of us that are not delinquent, are underwater and have high interest rates are not being helped.
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Andrea
May 15, 2012 @ 9:08 pm
I have been trying to find out if we can get a short refinance but can’t find anyone who will give me an answer at b of a. My loan is serviced by B of A but owned by Wells Fargo. Who do I apply to? B of A told me they do short refi’s but that Wells Fargo doesn’t. Is there an agency or company that anyone has experience with that actually works to get through to the banks. We are non FHA and are current on our mortgage but have a high interest rate. We would be happy to just get our interest rate cut to today’s rates, but can’t as we are underwater. Any ideas on how to proceed or is it hopeless?
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