FHA has decided to introduce a short refinance program to help the struggling homeowners. This program has been specially designed for those individuals who are going through home mortgage problems. Glance through the article to gather information on FHA short refinance program. FHA Short refinance – A new hope for the struggling homeowners- Obama administration has introduced FHA short refinance program to assist the individuals who are finding it difficult to make payments on their home mortgage loans. The goal of this program is to help the homeowners who have been severely affected by the downturn in the housing market but are somehow current on their home loan payments.

Still, many of them who are actually aware about the program do not have the idea on how to successfully proceed under it. The result is that there are too many myths than realities. The very first and strong myth is that mortgage refinancing program will help house flippers and speculators to make their big chunk. However, this is not true anyways. On the contrary if the homeowner wants to become successful in the loan modification process, it is very important for the homeowner to live in the home for which he/she wishes to get the mortgage modified. The clear purpose of federal mortgage refinancing program is to help the struggling homeowners to come out easily from the mortgage lending and not help the investors by any means.

Understanding the basics of HAMP Loan Modification is a necessity especially if the applicants are looking to meet the criteria set for qualifying for the loan. Basics include the terms and conditions and methods of applying for the home affordable refinance program. Different banks and lending institutions will have differing requirements for qualification. It is very important to look around and be aware about the basics and other requirements before applying for the HAMP Loan Modification.

The property should be the primary residence of the homeowner. In short, the homeowner should be living in the home. Homeowners need to have a decent credit score. Homeowners need to have minimum 500 credit score to be eligible for the short refinance program. Apart from that, homeowners will have to fulfill the general FHA underwriting guidelines. The loan-to-value ratio must be below 97.5%. If the homeowners have 2 mortgages, then the overall loan-to-value ration should be less than 115%.

A letter of hardship sent to the lending institution may also work in your favour as it will clarify your financial stature including your income and expenses, monthly mortgage payment.
The residence of the owner should be the primary residence and the first mortgage loan should be dated prior to 1st January, 2009.
The unpaid principal amount of the mortgage must be less than or not more than $ 729, 750.
If your previous mortgage loan has been modified one cannot qualify for such loan modification programs again.

Learn more about Obama Mortgage Relief Plan Qualifications.

Pennsylvania Obama Refinance To 125% Announced

Today, it was announced by HUD Secretary Shaun Donovan that people who owed more than 105% of what their home was worth could now refinance up to 125% of the home’s value. This is great news to many homeowners in Pennsylvania because now they can refinance up to 125% of the homes value where the prior limit under the Obama Refinance Plan was 105%. The change from 105% to 125% in the Making Home Affordable plan is just another step that the Obama administration is taking to help prevent foreclosures across America.

Both right here in Pennsylvania as well as all over the US, there will now be thousands of people who currently owe more than 105% of their home’s value take advantage of lower rates while they are available. Now, people all across Pennsylvania will be rushing to refinance while rates are low.

According to the story reported in CNN:

“The president’s Making Home Affordable plan is already helping far more than any previous foreclosure initiative and with today’s announcement we will extend its reach still further,” said Donovan.

A story at Bloomberg said:

A drop in values has left about 20.4 million of the U.S.’s 93 million houses, condos and co-ops with mortgages higher than the properties are worth as of March 31, Seattle-based real estate data service Zillow.com said in a report May 6.

What This Means For Homeowners In Pennsylvania

While it is difficult to tell exactly how many people in Pennsylvania will benefit from this change, there are surely many people right here in Pennsylvania who will now be able to refinance, where prior to today’s announcement they were locked out. The best way to find out if you qualify under the new Obama refinance rules is to contact your local loan officer in Pennsylvania and ask them – or contact us for more information.