The Federal Housing Administration is taking an extra step to make sure certain homeowners aren't locked out of a special refinancing program that President Obama unveiled on March 6.
In a note to lenders, FHA said it will cancel case numbers so that borrowers with refinancings in the works at the time of the President's announcement can still benefit from the special refi program that starts June 11.
Loans with case numbers dated before June 11 will be ineligible for the low-cost refinancings.
"Lenders may submit case number cancellation requests immediately," a March 30 FHA Notice says.
The special streamline refi program is designed to refinance existing FHA borrowers with loans originated before June 2009.
The agency rarely cancels case numbers. But it is hoping to reach a lot of FHA borrowers who have been reluctant to refinance for the past three years.
To this end, the agency has dramatically reduced its mortgage insurance premiums.
Starting June 11, premiums on streamline refinancings of FHA loans originated before June 2009 will be 1 basis point on the front end and 55 bps for the annual premium.
FHA just bumped up its upfront premium for other FHA borrowers to 175 bps and the annual rate to 125 bps.
