East Valley Short Sale: New FHA short refinance unlikely to help you
East Valley Team member Dean Ouellette talks about how this great new government short refi program is unlikely to help many East Valley home owners.
So first the government gave us HAMP to help modify millions of loans, that was a complete failure. Then the gave us HAFA to make it easier to do short sales, again an utter failure. Now they are giving us a short refinance program to save the masses. My prediction, see HAMP/HAFA.
There are some main flaws with the new refinance program. The lender under the program will cut your remaining balance on your principle by 10% so you can refinance the mortgage. All you need to do is be current on your payments, be able to qualify for the new loan and have your home be underwater. Easy right? Sure until you dig deeper.
The problem is with the numbers. Let’s say you are LUCKY and only owe $220k on a home what is worth $175k. And if you are in Arizona you would be lucky not to owe more on this house. Now if your lender waives 10% your new balance is $200k. See the problem 200 > 175. Your loan-to-value ratio needs to be less than 97.75% which means the most you could refinance for is about $171k.
And almost everyone I talk to a short sale about is a lot more upside down than this. So it may help you if you live in Palymra Pa, but if you live in Chandler or Tempe or Gilbert or almost anywhere in the Phoenix area, this program is very unlikely to help you.
Another failed government program that will probably cost more to run than it will save homeowners money.
Who says you can't teach a rocket scientist new tricks. Since Kristin left her former profession for her new one she has built one of the fastest growing businesses in the East Valley. Kristin is known for her Youtube videos, make sure you check them out. 
After a long career in political consulting Dean transitioned to real estate and has not looked back. Dean is one of the sick ones who enjoys fighting with banks to get short sales approved and to help homeowners avoid foreclosure. Dean also loves making videos on the subject.
Hi, I’m in Florida. And I was just reading this. I think their criteria said banks have to write off 10% minimum or more. I bought for $200k, owe $165k, appraised for $50k So I really hope this program can help me, I’m still current but barely.
Dean, I saw your Youtube post regarding short refi starting 9/7/10. It was great.
I have a 360000. mortgage on a house that may be worth 250000. I pay my bill on time and have excellent credit with very little debt.
What are my options?
Thx for your time!!
Mike S
The guidelines say the lender must write off AT LEAST 10%.