Topics In This Issue

• Federal Issues

• State Issues

• Courts

• Firm News

• Mortgages

• Litigation

• Credit Cards

Excerpt from "Federal Issues"

HUD Now Providing FHA Short Refinance Option. On September 7, the U.S. Department of Housing and Urban Development (HUD) began providing an additional refinancing option for "underwater" borrowers, i.e., homeowners who owe more on their mortgage loan than the value of their property. Originally announced in March (as reported in InfoBytes, March 26, 2010), this enhancement to the Federal Housing Administration (FHA) refinance program will offer certain underwater borrowers the opportunity to qualify for an FHA-insured mortgage. To qualify, (i) the borrower must be underwater, (ii) the borrower must be current on the existing mortgage, (iii) the borrower must qualify under FHA underwriting requirements, (iv) the property must be the borrower’s primary residence, (v) the lienholder must consent and agree to write off at least ten percent of the unpaid principal balance of the first mortgage, (vi) the existing lien must not be an FHA-insured loan, and (vii) the refinanced FHA-insured loan must have a loan-to-value ratio of no more than 97.75 percent and a combined loan-to-value ratio no greater than 115 percent.

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