The FHA is removing streamlined refinanced loans from the lender's "compare ratio," according to a White House fact sheet on the President's plan to increase refinancings and help struggling homeowners.
"This will open the program up to many more families with FHA-insured loans," the White House said.
FHA borrowers that are current on their government insured mortgage are allowed to refinance under the existing streamline program without a new appraisal, credit report or documentation normally required in a refinancing.
"However, some borrowers who have been eligible for low-cost refinancing though this program are being denied by lenders reticent to make loans that may compromise their status as FHA-lenders. To resolve this issue, FHA is removing these loans from the compare ratio," the fact sheet says.
As part of the President's plan, the Rural Housing Service is adopting a new streamline refinancing program too. To be eligible, a borrower with an RHS-guaranteed single-family loan only has to demonstrate "that he or she has been current on their loan."
