October 21, 2010 by 32 Comments

On September 7th, The FHA started its short refi program.  The program is designed to help underwater borrowers refinance their mortgages.  Typically, borrowers with negative home equity are unable to meet the loan-to-value ratios that lenders require to get a new mortgage.  Thus these underwater borrowers are precluded from refinancing their mortgages into today’s historically low rates.  According to the FHA, the program would potentially assist 500,000 to 1.5 million underwater borrowers refinance their mortgages (for complete details on the program, click here to read the FHA’s mortgagee letter).

On September 22, I posted a short blog asking our readers whether or not their lenders were participating in the FHA Short Refi program.  It has been one of the most read and most commented blogs I have posted.  Although it is by no means a scientific poll and it has an admittedly small sample size, the comments are pretty telling.  I have yet to hear from anyone who has been able to take advantage of the program.  Here are some sample comments:

  • “You would think it would be in the banks’ best interest to lose less money with a short refi as opposed to a short sale or REO where they also have to pay 6% to a realtor”.
  • “Spoke with Wells Fargo several times over the past three weeks about this program and during the latest call yesterday was told that they would not participate”.
  • “An indepedent loan officer I’m working with has said that no banks are participating in the short re-fi program”.
  • “I also talked to BofA countless times about the short-refi and most of them have no idea what I was talking about.  [They] keep on transferring me around with no answer other than they are still evaluating the program”.
  • “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”.
  • “I tried contacting my lender CitiMortgage several times in the past couple of weeks.  At first the consistent reply from the reps was that CitiMortgage has not decided whether to implement FHA short refinance or not.  After persistent efforts, one of the reps told me last Friday (9/17) that CitiMortgage has taken a decision NOT to implement it”.

These are just a few of the comments that I received.  Borrowers are extremely frustrated and angry, and frankly, I don’t blame them.  This program is entirely dependent upon the voluntary participation of lenders, which does not appear to be forthcoming.  The program was designed to help 500,000 to 1.5 million borrowers.  I have yet to hear from anyone who has been helped by it.  Possibly more lenders will participate down the road.  Possibly the program will be modified so there is more incentive for lenders to participate.  Possibly there are many people who are using short refi that aren’t vocal about it.  Maybe I’m just really far off base here (wouldn’t be the first time).

So I reiterate my original question: have you (or anyone you know) been able to utilize the FHA Short Refi program?  If you have (or have not) let me know in the comments section below.

Filed Under:
Tagged with: , , , , ,


  • s2kreno@yahoo.com' Gina Pogol says:

    Cannot find a list of participating lenders anywhere online (in marked contrast to the easy availability of information about HAMP participants). I do know that Fannie and Freddie are both passing. Just submitted a poll on Mortgage News Daily for lender employees and homeowners to see if anyone is actually willing to extinguish a performing loan 9remember that borrowers have to be current to qualify) and take a loss in the process. Don’t think so.

  • imdoingairpunches@gmail.com' George says:

    Maybe you could try contacting the agency that rolled out the program and ask them what lenders are currently participating (if any).

  • jmseas@yahoo.com' John says:

    Double NO for bank of america.

  • s2kreno@yahoo.com' Gina Pogol says:

    The agency that rolled out the program is HUD. Neither HUD nor MHA include any mention of the program in their reporting.

  • Kevinjohnson1979@gmail.com' Kevin says:

    I felt that my family situation would be the ideal candidate for the FHA short refinance. After it was announced last spring I eagerly awaited the announcement for it’s implementation. Sadly, after contacting SunTrust I was sent back and forth between loss mitigation and refinance an absurd number of times. None of the employees understand the program. Fed up with that process I decided to use the online form to contact SunTrust. I received a response stating that I did not qualify because my loan is not FHA backed already! I replied to the email I received to state that the program (which I sent them the link to) specifically states as one of the CRITERIA that current loans cannot be FHA already. In direct conflict with their lazy flippant reply. In response I received an email stating that I could not communicate via email for privacy reasons (although they can?) and I would need to submit another reply on the website. We saw how well that went, so I decided to take a break and try to start the process over again at a later time. It seems reasonable that the government could have mandated honest answers as to whether banks are participating or not. If the possibility is out there I don’t want to be complacent but if the answers is no why make me bang my head against the wall?

  • panteradragon@hotmail.com' Frustrated Home Owner says:

    Wells Fargo is definitely not participating last time I called them (~2 weeks ago)…They then directed me to another department to see what other options are available. Well, my Loan To Value (LTV) is above the 125% threshold for any other options, therefore they are not willing to help me at all! So the ones that are paying, are significantly underwater, and really need the help…are beyond help according to Wells Fargo…With no other option to help me, it’s as if they want me to walk. Given that I’m about 200% LTV here in Brevard County, FL…where thousands of jobs are disappearing with the Space Shuttle Program retiring, I’m royally screwed on my house/mortgage. If I walked like so many others, I could use that $ to get on top of all my student loans that helped me get 2 engineering degrees and an MBA. As the housing market around this area goes down even more (like it did during the Apollo Program transition), I expect to be a lot more underwater than I am now…

  • up4auction@msn.com' frus trated says:

    what a waste if time…. no bank is going to do this without a larger incentive

  • drdeleon1668@yahoo.com' frustrated & confused says:

    I just heard that the short refi program did not get any funding. How true is this?

  • juliaarea@gmail.com' Julia says:

    Just talked with Wells Fargo and they are reviewing my loan for the APOLLO Program, which begins with a 3 month payment pending approval for permanent modification. Does anyone have the specifications on this type program? Is it a short-refi or what?

  • jdelace@aol.com' What a joke! says:

    My lender doesn’t even know this program exists! The short refinance program was just a bunch of political rhetoric to make it seem that the government is actually attempting to fix this mess. There can’t be any substance to the program when it’s made to be voluntary to the banks. Let’s face it, politicians are in bed with the banks and will never do anything to hurt the banks.

  • lgmarie@hotmail.com' Another frustrated homeowner says:

    I qualify for the FHA short refinance program. My application to refinance has been stalled since last year because Citimortgage doesn’t participate in the program. (I cannot even refinance at a lower rate under a conventional refi because it would be throwing good money after bad, or under the HARP program for a lower rate because Freddie Mac declined the application because of the way the loan was bundled and sold…I have a conventional 30-year mortgage, so how a mortage is bundled and sold is not under my control and not my problem.)

    I call Citimortage periodically to see if they are now participating. Half the time, their mortgage consultants do not even know what this program is. I have to explain it to them. I called the FHA to ask if any lender has participated in their short refi program. They referred me to their Web site and gave me some run-of-the-mill (useless) information. I still don’t know if any lender has participated in the program. My loan is backed by Freddie Mac so the post by Jared Leichliter at Steltmen Wholesale above wouldn’t help. I am no economist, but it seems to be a no-brainer that the largest asset that a person has is typically their house (i.e, the equity in the house). If the housing market does not stabilize for those underwater in good standing, then consumer confidence will not improve, therefore consumer consumption will not increase,therefore businesses will not flourish and layoffs will continue to rise, therefore the economy will remain stagnant. Cause and effect. It’s not rocket science.

  • bonzail101@yahoo.com' Anonymous says:

    Everhome Mortgage has the same Apollo Program. They told me that I don’t meet the HARP guideline. My loan originated after January 2009. The Appollo program is the only one they could put me in. You have to complete the 3 month trial payment plan. Once completed, they re-evaluate your loan terms and apply a fix interest rate. They told me that they will push the 30 year term loan into a 40 year term with 5% interest. My loan is currently at 4.99%. Of course, there’s pros and cons. As of right now, I am not aggreeing to this term yet.

  • juliaarea@gmail.com' Julia says:

    Wells Fargo turned me down for Apollo. I am filing suit against them now. They won’t talk to me or tell me who owns the loan except to say the government backed investor would not modify. I would have taken a 40 year term at 5% if it was a fixed loan and been happy. This would get me smaller payments and through the difficult economy. Plus rates are now going up anyway. I wrapped one with GMAC/IMPAC in terms with a 2% first 2 years, 3% for 3 years and back to a 7% (my original) for the remaining with all back fees in loan. Not as good as yours but workable now. If yours is a house you think you can afford later and want to keep, it might work. If not, then maybe better to walk away and let them keep it. I know thats hard but sometimes it makes more sense than filing bankruptcy. One choice is to go to a specialized mortgage attorney who will file suit against your lender, particularly if you had one of those “funny” loans where someone did something questionable or bait switched at closing on terms, etc. Just a little food for thought. You still have options but the 5% at 40, if the notes work for your current circumstances might not be a bad deal. The thing that scares me is that people are now saying servicers are reniging on these deals, refusing to make them permanent. Many companies are doing the 3 months, getting the government ‘kickback’ to modify, and still dumping the loan! You need some assurance they will make it permanent. Our Government really isn’t policing the industry AT ALL!

  • aprilgator@yahoo.com' Aprilgator says:

    I completely qualify for this FHA short re-fi according to the criteria list. I had the same experience as the other responder with Suntrust. I have called them monthly since September when I first learned of this. I make too much for one type of relief, and my home is tooooooo underwater for the other type of relief. So this is the one I qualifiy for. I explained this to everyone I talked to at Suntrust. I keep getting passed around back and forth from the loss mitigation department and the refinance agents. No one knew what I was talking about and their knee-jerk response was that I didn’t qualify because my loan was not FHA. I had to explain it to them that the criteria WAS that the loan NOT be FHA. They were confused, every one of them. I have had to read the HUD Mortgagee letter from 08/06/2010 or tell them how to Google the FHA short re-fi program several times. It is extremely frustrating. These are supposed to be people who know about their own industry, but I seem to know more than they do. What do these people do at work every day??? The end result, after being passed around from supervisor to supervisor during every phone call, is that they don’t participate or don’t know if they ever will. So… since I’m so upside-down, I am looking at this house as basically a rental – I’ll never make up the difference and I don’t want to stay here forever. It was meant to be my “starter house.” I am not making any major repairs unless I have to in order to live there. No improvements. Eventually the bank will end up with the house when I walk away because they won’t do this program….. What a shame….

  • prinagreen@aol.com' sabrina says:

    We were just offered the APOLLO program with three trial payments. I am hoping that they don’t bail on us after the three months and say we can’t help you. We went through NACA and have been on trial payments since May 2010 with Citimortgage. Our loan was sold (LOSERFACES) when they modified our 2nd mortgage( 2% form 8.0) but bailed at what they say was “CLOSING”. Anyway, NAtionstar is the new lender. I hope this all works out after the trial period. We would take 40 yrs with tier terms. Hope they offer it. Good luck to all of you!

  • ellisbaggs01@msn.com' Comment says:

    My servicer is Greentree and my loan is owned by Fannie Mae. I have gone back and forth with both for awhile, mostly explaining the program and trying to find contacts that will let me have more than one phone call with them. The current status is that Greentree is willing to participate, but the Fannie Mae is not. What bothers me the most is that, as a government sponsered entity, Fannie Mae should be on board with all of the government’s programs. Let me know if anyone has anymore insight into Fannie Mae’s participation in the program. My next step is writing the Fannie Mae CEO along with my representatives.

  • kelskeys@yahoo.com' Kelli Swedenskey says:

    I too, qualify for a Short Refi, AND, my current lenders are on board. They have agreed too take $100,000.00 less than my mortgage balance of $325,000.00.
    I problem is finding a new lender to qualify me and fund my loan.
    My current lender has been more than patient with me. They extended my temporary modification for two months at a lesser monthly payment while I was to find someone to refinance my loan. I have yet to find a lender to qualify me and my modification ended last month (March. My payments went from $ 1,400.00 (modifiedd rate) to $2,688.00 this month and it is IMPOSSIBLE for me to pay.
    Why are Lenders SO leary of funding ‘Short Refi’s’ when they are federally insured through HUD and the FHA?
    If anyone knows of Lenders funding Short refi’s, please, please send me an email @ [email protected]

  • pb@gmail.com' paul says:

    A number of people have mentioned the Apollo Program. I was told by WF that I might qualify for that as it was a Fannie Mae program and I have a Fannie Mae loan. Well I called Fannie Mae and they have never heard of an Apollo program that they have. They said it is an FHA plan. Can anyone clarify?

  • lisa99_90048@yahoo.com' Lisa says:

    Contacted GMAC’s Loss Mitigation Dept. (877 928 4622) & stated they do not participate in the FHA Short Refinance Program.

  • cbindal@hotmail.com' Chirag says:

    Wells Fargo is not implementing this as of 8/5/11.

  • spencer0388@gmail.com' Spencer Kimball says:

    Can you provide me with any ideas as to better approach my lender to voluntarily agree to participate in the FHA short refinance program. An example of a persuasive cover letter documentation and additional language and incentive facts to persuade my lender to agree to participating on the FHA Short Refinance program please….Anything

  • Hey there, You have done an excellent job. I will definitely digg it and personally suggest to my friends. I’m sure they will be benefited from this web site.

  • Muriale7@aol.com' Ro says:

    I was wondering what the outcome was for Julia and the anonymous reply? I am in the same situation with Nationstar “nightmare” mortgage. They are so sneaky, they lie constantly, no one knows what they are doing and I have had over 6 people in 2 months handeling my acct. I am at the end of my ropes and want to give up…I can’t. I Have 4 children and a big dog-don’t fit in any apartments! They mail things that arrive the day they are due! nasty and un cooperative. I am worried that they will deny this Apollo Mod. and then what? did not receive anything in writing in regard to it or the Hamp, that we should have received, and no one there will tell me the requirements for it. Only that I have to pay 3 payments by 8/14 or I will go into forclosure! I was told, if I send less, they will send it back! What do I do next, I can’t get three payments in in 3 weeks! They say they don’t want my house, but they are doing everything to make us fail previous programs. Trying to get to a “real” mod lawyer. I can’t believe what they are getting away with. I guess I just want to hear something good and maybe some advice on what not to do.

  • chicagobarbie@yahoo.com' Anita says:

    I’m trying to refinance. My Loans are serviced by HSBC and owned by GMAC. GMAC tells me to contsct the servicer and HSBC give me the runa round. Modification tells me to call Lirigation Litagation tells me to call short sale and around I go in a circle chasing my tail. I plan to get help from a HUD authorized counsler in my county and see what happens. Maybe they will answer to her more directly. Will update when I break through the red tape..

  • chicagobarbie@yahoo.com' Anita says:

    Correction I meant to say Short Refinance my home is 100K under water as we speak. I will not give up just because they are giving me a hard time no matter what I will get it processed. will keep you posted as I find out any useful info.

  • lagrima@att.net' jose says:

    looking to refinance a FHA loan filed for BK two years ago is discharge also got loan modification from wells fargo last year loan is underwater 4.85% interest does anyone know a company please reply thanks

  • lagrima@att.net' jose says:

    looking to refinance a FHA loan filed for BK two years ago is discharge also got loan modification from wells fargo last year loan is underwater 4.85% interest does anyone know a company please reply wells fargo in not willing to help thanks

  • lopezfinancing@gmail.com' m. lopez says:

    I did short refi for client with a 1st and 2nd in 2009. The lender was First Franklin and Specialized Loan Servicing. You have to submit package with a Hardship and the approval to the short sale department. I’m working to see if I can get one done for a client right now with Greentree. Let’s see what happens.

  • maria_arambula@sbcglobal.net' Irene says:

    Please post if Greentree is successful.

  • tt@TT.com' Hate PNC says:

    PNC Bank will not help… they told me Im paying and in good standards with them. So why should they forgive any part of my loan and lose money on me.

  • gdstonefly@gmail.com' Dan says:

    Anyone have success with a FHA short refinance involving servicing by Citimortgage on the first mortgage and a Ocwen on the second mortgage?
    Both tell me they do not underwrite direct loans or will work with another lender involving reduced loan payoffs.
    I do not believe them.
    Anyone out there who has had success with this FHA program with these lenders?

  • ldblue14@gmail.com' Janet says:

    My mortgage is with Nationstar. They didn’t even know what I was talking about when I asked them about the FHA Short Refinance option. I kept getting transferred until I spoke to a gentleman and he said, “oh, you want us to take 10% of the principal”. “Well, I’m not sure that we do that.” He then gave me another number which, I got no response. Now that it’s been about a year since the last post on this subject, has anyone had any luck. I would specifically like to hear about Nationstar.

Leave a Reply

Your email address will not be published. Required fields are marked *