Five of the largest US lenders are signed up to participate in the FHA Short Refi program... but don't count on it helping you. While 50 MILLION dollars have been allocated to the program, a whopping 44 (yes, forty four) people have been helped. (Source: Housing Wire - see article here.
This falls under the category of "Things that make you go Hmmm...." Sort of.
Why aren't they actively participating? And, for that matter, why don't banks just adjust the loans that are in place rather than doing a short sale?
By and large, banks need cash, so if they are going to write down their "receivables" (aka - reduce the amount due to them) then in exchange they want cash, the highest amount they can get. Simply modifying the loan doesn't provide them with a lump sum of cash... so they it really isn't in their best interest.
This is yet another reason short sales are their preferred way to dispose of risky loans.
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Need help evaluating your options? Give me a call!
Vicky Chrisner
Keller Williams Realty
703-669-3142
