The Federal Housing Administration (FHA) has revamped a little used program for refinancing underwater conventional loans, and extended its "short refinance" program until the end of 2014.

Lenders have completed only 840 short refis since FHA rolled out the program in August 2010. The main stumbling block has been the lack of a secondary market execution, according to Mark Stamm, who is advising MSI Mortgage Services III, Bloomington, Ill., on growing its FHA short refinance program.

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