A Kansas thrift has teamed up with Bankers Portfolio to refinance underwater mortgages where investors have agreed to take principal writedowns that meet requirements of a Federal Housing Administration program.
North American Savings Bank in Overland Park said it will refinance loans through the FHA's Hope for Homeowners program and the newly launched Short Refinance Program.
"By offering these programs we are able to assist borrowers that are either current or behind on their payments while maximizing the payoffs for existing mortgage holders," said NASB senior vice president Bruce Thielen.
Bankers Portfolio in Irvine, Calif., works with mortgage holders to identify loans with borrowers that could qualify for a H4H refinancing. The company said it has investors lined up to purchase the new FHA-insured loans after they close.
"It's an important solution for the owners of the mortgage who don't want to modify the loan and hold on to the loan for the long term," said Joel Harrison, director of business development at Bankers Portfolio.
Congress created the FHA H4H program in 2008, but to date just 216 loans have been refinanced through the initiative. Another 154 H4H applications are pending.
Its supporters believe H4H may finally get up to speed just before it is set to expire at the end of September 2011. Harrison, for one, is hoping Congress will extend the program but at this point that seems unlikely. The House of Representatives has already voted to kill the FHA short refi program.
Meanwhile, the federal mortgage insurer has approved 64 short refinancings with 89 applications pending. The FHA launched the short refi program in October. It is designed to refinance underwater borrowers who are current on their mortgage.
