A short refinance is specific to the United States where mortgage law allows such transactions.
A short refinance can take place when the borrower's loan balance is more than the property's worth.
It is very common for homeowners to be misinformed by real estate professionals not familiar with Federal Housing Administration (FHA) guidelines that a short sale or short refinance is no different than a foreclosure; this is untrue, according to United States Department of Housing and Urban Development (HUD).
HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.
These guidelines were developed to help borrowers with negative equity and who defaulted on their loans through no fault of their own.
These programs were developed to help responsible homeowners, such as those who continually made their payments on time, to avoid foreclosure.