September 22, 2010 by 143 Comments


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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  •' Rusty says:

    Call me – I can help you – Rusty Stearns Lending, Inc.
    909 895-6905

  •' Jane says:

    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?

  •' Lizz says:

    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.

  •' chris says:

    Has anybody worked with FGMC?
    I am serviced by Rushmore loan management is anybody with them?

  •' Matthew Nappi says:

    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?

  •' David says:

    Who is participating? Seems like nobody is.

  •' Lisa says:

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

  •' Pyang says:

    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.

  •' Michelle says:

    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.

  •' Stacy says:

    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???

  •' Jamie says:

    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.

  •' robert benedetto says:

    Can you assist with citi mortgage who says we dont qualify. Im current on all payments and underwater about 100,000 dollars?

  •' Larry F says:

    Can you provide me contact details for yourself and chase ?
    I have a chase mortgage 100K under water and am interested in this program.

  •' RexCraigo says:

    There’s none, that’s the point.

  •' Felix says:

    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. [email protected]

  •' tony says:

    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. [email protected]

  •' DS says:

    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.

  •' John says:


    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.

    206.226.6685. – Office

  •' Corbin says:

    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.

  •' Andrea says:

    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?

  •' Sharon says:

    Are you still doing FHA Short Refinance’s ?

  •' Sharon says:

    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!!

  •' Sharon says:


    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?

  •' Alex Arce says:

    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

  •' Laurie says:

    I live in Omaha NE and am upside down in my mortgage. I have a 9.75 rate on a balance of 114,000. I believe the house to be worth about 90,000. My current mortgage company is US bank and they agreed to refinance for 7% on a 15 year loan, or 3.25 on an 30. How do I get a Short Refinance at a much lower interest rate? It’s really hard to find good information online. There is soooo much information I am overwhelmed. What is happening in June to the FHI program? And should I wait for this before doing anything?

  •' Laurie says:

    That’s 7.25 on a 30 year. Sorry.

  •' CJ says:

    Is this site just a tally of non-fha loan owners who are attempting to refi but then informed by lender of nonparticipation. If it is . . . please add me to this list. Just got off phone with Citigroup . . . they were clueless.

    Is there an alternate plan in the making???

  • I’m very interested on knowing which banks are participating in the FHA short refinance program because BOFA is not participating & we are the perfect customer for this program and would love it if my lender would even consider it, but unfortunately they are not. We are homeowners of a towmhome and a unit in our community was sold recently for $210K when we purchased it 2.5 years ago at $310K. Our LTV is 138%. Never missed a mortg pymt and BOFA is lame talk about the bank of NO opportunites.

  •' trel says:

    I am currently working with Prudent funding on my FHA Short Refi. Just received a verbal approval from WF…but have not received the official approval yet.

  •' Tim says:

    Does PHH bank do short pay refi’s? Internally with them, they will only do the HARP 125% Refi…but I’m much further upside down than that

  •' Ron says:

    Has anyone had success with the FHA Short Refinance through America’s Servicing Company (a subsidiary of Wells Fargo)? A post above stated that the possibility of Wells Fargo participating after June 2012 was likely. My mortgage was refinanced in February of 2011, but is severely underwater ($100,000+) and the ridiculous rate is 8.125%. If anyone can answer my question above that would be terrific, or if anyone knows of any other potential solutions it would be greatly appreciated.

  •' autum says:

    I called US Bank who is not my lender. Said they do not participate. Also called Fay Financial someone here mentioned, who also does not. GMAC also said they do not, but perhaps next year, but not sure exactly.

  •' autum says:

    So I called one of HUD counselors because according to the government’s website I would be more successful at obtaining a refinance program if get in touch with a HUD counselor. I was told that I would need to sign up first and after I told him my situation he could not tell me the specific program before signing up. I said no thanks. I’d rather not go through submitting all the paperwork and later find out I don’t qualify for any of the programs. I’m sure they’ll get paid for every application they take in.

  •' autum says:

    Ok folks I just heard back from Wells Fargo, who is not my lender, but I was told that they participate in the FHA Short Refinance for current customers only, don’t quote me on that, so you’ll have to check it out yourself. The guy told me because it’s a pilot program they cannot offer to others.

  •' James says:

    Also, have United Bilt Homes….did you find a good refinance program? Looking to do the same very soon. Thanks!

  •' michael bergeron says:

    Hello .I just heard about this fha short program.I qualify and furthermore my home will never recover due to foreclosures and a dcling neighborhood value.I am 50 k underwater.I called my mortgage company PNC .they told me that they do not offer the program and the customer srvice rep stated no company in their right mind would go for this program .I don’t understand why.tbey know that home values have taken quite a hit along with rising gas prices milk any consumer product.and the unemployment rates are crazy.if thes homes were bought at current value the mortgage companies would still be happy making a proffit.I beleive eveyone should pay what the home is companies are the reason wall street fell and gas went up.complete ripoffs .that do not care one bit about the american people but their own pockets.something needs to happen.maybe a law on mortgage be fair.

  •' TonyToniTone says:

    I called a HUD counselor and was given a local company to work with. I submitted a mountain of paperwork to them to try and get them to encourage Citimortgage to provide me with an FHA short refinance. When I called Citimortgage directly they said they don’t participate in the program. I just submitted this paperwork last week to the HUD approved agency, so we will see if it was fruitful. If they can actually make it happen it would definitely be worth the $40,000 in principal reduction I would realize from having a reasonable LTV ratio. I’ll post my progress when it becomes clear if this will help or not.

  •' TonyToniTone says:

    I just heard back from the HUD approved agency. After submitting a mountain of paperwork that was about an inch high, I was told that Citimortgage doesn’t participate in the FHA short refinance. My only option to refinance would be to pay down the loan $50,000. So it really wasn’t any help at all. You probably made the right decision to not bother working with them.

  •' Mark says:

    Is anyone having success with WF short Refi?

  •' Anne Rollins says:

    I have unfortunately had a run of bad luck one thing after another and I am behind on my mortgage payments. I am a single mom trying to raise 2 boys with no help from anyone not even receiving child support. I am totally lost and not sure where to turn. I do not have family that can help me. My hands are truly tied and desperately need help. I do not want to be homeless with my kids and as I stated before I do not have family that I can turn to for help or even to go and stay with.. I do not understand why they do not let you have the option of lower your payments by looking at your income change??? lost confused and crying out for help…

  •' Edu says:

    Would you please provide any update on this program. Is Suntrust participating in it?

  •' Heather M says:

    After reading some of the comments above, I can tell you that “some” banks are participating in the FHA Short Refinance Program. I negotiate these for my clients and the best bank to deal with so far is, Chase!!! The reason I am writing a comment on this site is to express my extreme frustration with CitiMortgage. I was working on a FHA Short Refinance with them for 5 (LONG) months. I spoke to one incompetent person after another and today after 5 months, I am told, there is nothing that can be done. The kicker is that during these past 5 months I was told that they participate in the program and they requested documentation after documentation, to only find out it was a waste of time. I am just curious if anyone else has dealt with the same problem as me with Citi? I also wanted to see if anyone has any insight on how to deal with Citi to get these done. I feel like they do participate in this program from several things I have read online, however, it seems that Citi only hires idiots who know nothing about mortgages. I just don’t get it! Any help would be great!!

  •' Lee says:

    Go to the HUD website for lenders that do the Short Refi.. Capital City Bank is one of them..mostly the smaller mortgage companies.

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