|
|
|
|
|
|
|
|
|
 An overview of the FHA Short Refinacing loan process
Make no mistake, there's a lot involved in getting a Short Refinancing mortgage loan and it is NOT a fast process. You wouldn't be here on our website if you could fill out a one-page loan application and get the help you need. What we do is most of the heavy lifting for you, we have streamlined the on-line application and will lead you through the entire loan process.
There are a few main steps involved for distressed homeowners to pursure participation in the Short Refinancing program. You'll see that we've made your part in them as easy as possible, and we do all the work! That's what we're here for
We are an authorized and Licensed FHA Lender ready to help you. Please complete a loan application here:
Click Here to APPLY TODAY!
| Step one: APPLY TODAY to discuss how to qualify and your eligibilty for the Short Refinancing Program |
|
This is a function of a couple things.
- APPLY TODAY!
- Pay for your Credit Report
- Complete and return additional forms
- Send us your documents via email, fax or mail
We need to determine if the Short Refinancing program is a feasible and effective option for mitigating losses and will assess the your eligibility for the program as follows:
- The existing mortgage(s) was originated on or before January 1, 2008;
-
Existing mortgage payment(s) as of March 1, 2008 exceeds 31 percent of the borrowers gross monthly income;
-
You did not intentionally default, do not have an ownership interest in other residential real estate and has not been convicted of fraud in the last 10 years under Federal and state law; and
-
You did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced.
We'll also help you guide you through different scenarios by asking a few simple questions. Based on standard lender guidelines, and given your unique credit and employment history, income and debt, we'll get you a good idea of how you could expect to benefit most from the H4H program.
Consumer considerations:
The lender will disclose to the homeowner the benefits of the program:
The lender will also disclose to the homeowner the costs of the program:
-
3 percent upfront mortgage insurance premium and a 1.5 percent annual premium,
-
-
Prohibition against new junior liens against the property unless they are directly related to property maintenance. |
| Step two: Negotiations Between Borrower(s) and Lien Holder(s) |
If the lender refinancing the loan does not hold the senior mortgage lien, it will need to secure an agreement from the existing lien holder to waive all prepayment penalties and default fees on the existing loan and accept the loan proceeds from the H4H loan as payment in full. The loan amount (including the 3 percent UFMIP) for the new H4H loan cannot exceed 90 percent of the current appraised value of the property.
The lender will engage existing subordinate mortgage lien holders to extinguish all subordinate liens on the subject property. To entice subordinate lien holders to participate in the negotiation process and release their liens, FHA has the authority to share its future appreciation entitlement with them.
|
| Step three: Originating a Short Refinance Mortgage |
We will qualify you for the new Short Refinanced mortgage using the guidelines established under the terms of the program’s unique statutory requirements, ensuring you have the capacity to make the new payment on the refinanced mortgage in a timely manner.
During underwriting of the loan, we will calculate the future appreciation interest amount for each subordinate lien holder in accordance with instructions provided by FHA.
At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD’s appreciation share.
Following funding of the loan we will record – in addition to the typical security instrument and note for the first mortgage – a shared equity note and mortgage (SEM) and a shared appreciation note and mortgage (SAM). These mortgages will be serviced by FHA.
We will also submit the new mortgage for insurance to FHA, certifying that it has been originated, underwritten and closed in accordance with the FHA guidelines.
|
| Step four: your loan is funded |
We will work together with the Lender to designate an escrow/title company to handle the funding of your loan once it's approved. We'll coordinate with the escrow company to make sure all the papers your lender will need are in order, and you'll sign everything at the escrow/title company's office.
|
|
|
|
|
 |
|