refi possible for underwater home?

varinia · Joined: 29 Apr 2010 Posts: 1

I'm not the one trying to get one, but my landlady claims that she's in the middle of refinancing. I believe that she's being misled by a mortgage broker, as I don't think there's a mortgage company out there that would do this, but I would love to hear if maybe I'm wrong:

She bought in 2006 as owner occupant. Was offered a 4 year job contract in Southern California (home is in Northern California). Current mortgage is 80/20 total about 980K. Same homes all around are presently selling for low to mid 500's.

She's been gone for 2 years and I've been renting 1.5 years. I'm paying $ 2495/month in rent, which is far from covering her mortgage, but that's market rent.

The house NOD has been filed on March 17th and owner claims she's refinancing. While I do believe that she's honest, I just can't imagine that there's a possibility to refinance in an honest way. As investment property? Owner-occupied would not be honest.

Would love to hear what you think.

Thank you