Question by rosesbloom7: What are the guidelines for FHA bailout for mortgages? What is forgiven after short sale or foreclosure?
Who are FHA lenders for the new program?
Best answer:
Answer by J. Philip Real Estate
That is an extremely broad question. I would go to the HUD and FHA websites to get started.
What do you think? Answer below!
. All FHA-approved lenders can participate. That is almost all of them in your city.
In some cases the forgiven amount after a short sale is the amount the bank “lost” on the eventual sale of the property. Same for a foreclosure.
The guidelines are that the current lender accept a payoff of 85% of the old loan. That amount is then loaned on the new FHA loan. The idea is to get rid of an adjustable rate and now have a fixed rate. Works best for people whose loan is going from 7% to 9% in a few weeks.
The “bail out” is not for foreclosures or short sales. It is a program to prevent both of these and make refinancing easier.
There is also a program to purchase foreclosures, to get them off of the market.