Ok all of you homeowners with great credit, no late payments, but with a loan you wish you didn’t have. Here is a strategy that might be just right for you: a “short refi”. A short refi allows a borrower to refinance out of their loan with the cooperation of their current lender, accepting a write-down on their loan balance and issuing a payoff demand that is slightly below current market values (regardless of your higher loan balance.) The process involves negotiation through a loan modification legal firm in order to obtain agreement from your current lender. Assuming the negotiation is successful, you may proceed to refinance through a traditional lender into a brand new loan with a lower balance and better terms. The reason many banks are now willing to negotiate a short payoff demand on your current mortgage is that the alternatives to them, which are either foreclosure or short-sale, are typically more costly to them and take more time. If they know they can be paid off faster with a more profitable result, then they may agree to the short refinance as acceptable loss mitigation strategy. This helps you the consumer, the bank as holder of a devalued asset, and the economy as a whole as it contributes to stemming the tide of foreclosures plaguing the market at this time. (Note: It is recommended that you consult with your tax advisors and attorneys to understand how this strategy may affect other areas of your financial picture.)