The FHA, a division of the Department of Housing and Urban Development, announced on August 1 that, beginning a month later on September 1, it will reduce the amount it allows for cash-out refinances from 85% of a home’s value or less to 80% or less.
Mortgage industry veteran Rick Sharga told MarketWatch that a "lot of the foreclosure activity in the last cycle was caused by people doing cash-out refis.”
