HUD has issued Mortgagee Letter 2012-5, which announces enhancements to FHA’s Refinance of Borrowers in Negative Equity Positions Program, which was previously published in Mortgagee Letter 2010-23. Program enhancements include a short refinance trial payment plan, first lien holders’ option to extinguish 2nd lien debt, and an increase of the allowable housing debt-to-income ratio. This Mortgagee Letter also extends the expiration date of the Program to December 31, 2014. The enhancements are effective for loans with case numbers issued on or after March 13, 2012, and which close on or before December 31, 2014. To read this Mortgagee Letter in its entirety, click here.
