FHA Short Refinance Program Has Resulted in Only 15 Refinances

The FHA Short Refinance program, made available to loan servicers in June 2010 but formally launched in October, has resulted in just 15 refinances as of December 31, according to Congressional testimony from the Special Inspector General, Neil M. Barofsky.

A short refinance is a transaction in which a mortgage lender agrees to pay off a borrower’s existing mortgage and replace it with new a loan with a reduced balance in order to prevent foreclosure.

In a quarterly report to Congress, Barofsky slammed efforts made by the Treasury to halt foreclosures and improve the housing outlook.

Meanwhile, RealtyTrac expects foreclosure filings to surpass the three million mark in 2011, increasing 20 percent from the 2.9 million seen last year.

The Treasury also wasn’t able to produce any numbers tied to HAMP’s Principal Reduction Alternative program, which was also formally launched in October to help underwater homeowners.