Topics In This Issue

• Federal Issues

• State Issues

• Courts

• Firm News

• Mortgages

• Banking

• Consumer Finance

• Securities

• Litigation

• Credit Cards

Excerpt from "Federal Issues"

HUD Announces New Refinancing Program for "Underwater" Borrowers. On August 6, the U.S. Department of Housing and Urban Development announced details regarding the Federal Housing Administration (FHA) Short Refinance option, which provides a refinancing opportunity for responsible homeowners who are in negative equity positions. Beginning on September 7, 2010, FHA will offer eligible non-FHA borrowers the opportunity to refinance into a new FHA-insured mortgage. In order for a borrower to be eligible, (i) the existing first lien holder must write off at least ten percent of the unpaid principal, (ii) the borrower must be current on the mortgage to be refinanced and occupy the subject property, (iii) the borrower must meet standard FHA underwriting requirements and re-subordinate existing subordinated mortgages on the property, and (iv) the refinanced FHA-insured first lien must have a loan-to-value ratio of no more than 97.75%.

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