Janna Rankin Scharf, GRI, CLHMS, SFR - Coeur d'Alene Idaho Real Estate
Many homeowners are current on their mortgages, yet "underwater." If you are one of the masses who have seen your property value go below what you paid, while perhaps your adjustable rate monthly payments have gone up, here is something you should definitely check out! If you qualify, this could be the equivelent to WINNING THE LOTTERY!
Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain 'underwater' non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.
"We're throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined," said FHA Commissioner Stevens.
This means that as long as you don't already have an FHA loan, and can negotiate the equivalent of a short sale with your lender, with them agreeing to accept 90% of your mortgage as a payoff, FHA will essentially refinance your mortgage. Did I mention that interest rates this week hit ANOTHER RECORD LOW?
To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal to or greater than 500.
The property must be a primary residence. The existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.
I'm not sure yet how a homeowner will go about working through this process. It will be interesting, to say the least. I shudder to think of the hoops that we short sale agents go through, over the course of several frustrating months, to get an approval to a short sale offer. I also wonder about how anxious the existing mortgage holders will be to accept a short payoff from a borrower who is current on their payments.
But just as the successful buyers of short sales rejoice at their good fortune when all is said and done, I predict many underwater homeowners will be doing the Happy Dance! Whatever it takes to make it happen, it will have been WORTH IT!
I'll post updates as I get information from my lender contacts. Good luck!
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