www.lasvegasmtg.com Report: Major Banks approve FHA Short refinances! Oh Really?
by John Le Francois
www.lasvegasmtg.com Report: Major Banks approve FHA Short refinances! Oh Really? This was the the big news from the banking industry giants, Bank of America, Citi, Wells Fargo, GMAC, JP Morgan Chase and 24 other banks that they are NOW on board to use the FHA Short Refinance Loan Program.
The timing of this announcement is extremely suspect since the House of Representatives are giving the Big Banks a get out of jail pass again with the vote to repeal funding for the FHA Short Refinance Loan Program. Without the government funding of the program no FHA Short Refinance Loan Program will be available for the Big Banks to offer borrowers as an alternative way out of the foreclosure and short sale options they have available now.
The FHA Short Refinance Loan Program was available starting in September 2010 with $8 billion in government funding to help home owners get out from underwater home that had high interest rate loans but could not refinance due to the values of their homes. Since the BIG Banks had to decrease the principle by at least 10% or to market value none of the BIG Banks would even consider this as an alternative to foreclosure. It has been reported that only 44 loan since the FHA Short Refinance Loan Program inception has been completed.
So what has happened in the last six months that has changed the BIG Banks minds? It is easy to say you support a program that does not exist. If only those "rascally" politicians had notde-funded the FHA Short Refinance Loan Program before the Big Banks had a chance to embrace it! "Oh well, we tried, but our hands are tied now." This will be the Big Banks new marketing campaign to show they are trying to do the right thing. The Big Banks will try to use this repeal of the FHA Short Refinance Loan Program as why they need less government intervention in the banking industry.
With all the negative publicity about the Big Banks with Foreclosures, Robo Signing, Predatory Lending Practices. Loan Modifications, faulty trust deeds it is no wonder that someone is trying to use the FHA Short Refinance Loan Program as a way to spit shine the image. Who know who will buy it?