This opportunity applies to homeowners who owe more than their home is worth (they are underwater). Starting September 7th, 2010, homeowners who are current on their payments and their lender agrees to write off at least ten percent of their unpaid balance of their first mortgage, will be able to qualify for a new FHA insured mortgage. You cannot qualify if you are a current FHA borrower.
This program was first announced in March of 2010 and is aimed at helping 3-4 million homeowners through the end of 2012. The homeowner must still qualify for their new loan under the standard FHA underwriting requirements and have a credit score at or above 500. The home must also be the primary residence. As stated above the lien holder on the first mortgage must agree to write off at least 10% of the unpaid principle and the LTV (loan-to-value) ratio cannot be greater than 115%.
Upon refinancing with an FHA-insured first mortgage the LTV cannot be more than 97.75%.
The U.S. Department of Treasury is offering incentives to existing second lien holders who will fully and or partially disolve the loan.
If this sounds like a possible opportunity for you please contact your lender to see if you are elgible!