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Originally Posted by Nietzsche13
How does that work?
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Not a lot of details yet. From what I understand, home owners with negative equity will be able to refinance their home at 90% of the current market value. The government insures the difference (i.e. – neg. equity) which translates to a write off for the bank. If the homeowner sells the property in the future, 50% of any proceeds are returned to FHA.
Clearly, this would allow people to salvage their home & credit and take advantage of a low, fixed (30 yr) interest rate.