Loan Modification

FHA Short Refinance: No surprises here

By Gina Pogol

Well, even after extensive inquiry, I never did find a list of lenders participating in the FHA short refinance program, although I did get an avalanche of inquiries from beleaguered homeowners. The demand for the programs in obviously there, but how about the supply?

The latest in a series of government-sponsored attempts to right the mortgage ship is proving even less effective than I had anticipated.

If you are the government and you pretty much own Freddie Mac and Fannie Mae, and you can’t get THEM to sign on (perhaps someone should stop their allowance?!) the chances of any other lender turning performing loans into losses out of the goodness of its  heart seems unlikely.

HUD released its September FHA Outlook and the numbers speak for themselves (but this is my blog post so I will add my two cents anyway). Remember, the government estimated that 1.1 million homeowners would be eligible for this program.

“With respect to the refinance applications, 94,351 were prior FHA mortgages and 51,663 involved conventional seeking FHA insurance. It should be noted that the refinance total included 20 H4H applications as well as 14 applications under the new Short Refinance program.”

Kind of like trying to bail out the Titanic with a teaspoon.

And if that wasn’t bad enough….

HUD doesn’t say that any of these applications were approved.

Stay tuned.

Full post as published by FHA Mortgage Guide on October 31, 2010 (boomark / email).