The Federal Housing Administration recently launched an initiative to help underwater homeowners who are facing difficulty when it comes to paying their mortgage or simply suffering due to an underwater mortgage situation. Refinancing opportunities for underwater homeowners are limited at best but through this new FHA short refinancing option, homeowners may be able to gain a more affordable mortgage payment and see a reduction in their mortgage principal as well.
The benefits from this Federal Housing Administration short refinancing program can offer underwater homeowners an opportunity to refinance with an FHA-backed home loan and see a reduction in their mortgage principal from their primary mortgage servicer. While this program can greatly help underwater homeowners who have been struggling with their payments, but are still current and trying to stay afloat, there are those who believe this program may be lackluster at best.
Doubt for the success of this program seems to be pointed directly at mortgage lenders who will have to work with homeowners and the FHA so that they may lower mortgage principal amounts. Lowering mortgage principles has been something that a variety of home loan servicers have been hesitant to do, so those who argue this FHA short refinancing program will be unhelpful cite the fact that it will be unlikely that primary or secondary mortgage lenders will be willing to take a loss on the principle of underwater homes.
However, there have been some mortgage lenders who have worked with homeowners in order to offer principal reductions and, under this FHA short refinancing initiative, it’s hoped that more underwater homeowners will find a solution to their mortgage predicament. Understandably, homeowners who owe more on their home than their home is worth are in a difficult situation but if this short refinancing program is able to succeed, homeowners who have seen drastic drops in their property value may be able to at least find a more affordable monthly mortgage payment solution and avoid possible foreclosure in the future.