With all this talk in the news and media about foreclosures lately and different programs to help those facing foreclosure, I began wondering about refinancing. So many times people refinance their loans and I thought someone is probably asking themselves this very question – can they refinance their FHA home loan? While they are thinking about this question to themselves and not asking a person, they begin to become anxious about their housing situation. Not knowing the answer to questions can lead one to a path of wrong decisions and stagnant path, not taking action which can be detrimental. Read the below information slowly and carefully because this could be the answer you are looking for.

An FHA streamline refinance is a mortgage refinance of an existing FHA loan with limited amount of documentation and qualifications which streamlines the process. I have to admit when I think back to the loan processing for purchasing a house or car, it takes up some time. Sitting there going through pages and pages of information, terms, and more making sure nothing is left out. I applaud the fact they have streamlined this process. These times made me feel as if I was enlisting in the military again. Now that you are aware of what a FHA streamline refinance is, let me share regarding the cost. This is always going to be important. There are many types of interest rate and fee combinations for FHA streamline refinance. Check with your lender for what the parameters are.

You know that I could not let you guys think that is all there was to this loan. Of course not, there are qualifications. You should not even be surprised because you have to qualify for most things today. Seems there are only two qualification requirements which are (1) must currently have a FHA loan; and (2) must be current on mortgage payments. I ask you if you were not current, why would you be applying for an additional loan? It does amaze me sometimes watching the news hearing what people are saying.

For those that were preparing to ask this question, is there a difference between a normal refinance and an FHA streamline refinance, the answer is a strong yes. The difference from what I surmised is qualifications and documents required to qualify for the loan. The benefit to me is streamlining. If this limits the amount of documents and qualifications, this could be the one for you. A big one before I forget is that with a typical refinance loan the loan cost will be higher than an FHA streamline. Oh another huge benefit to this is FHA does not require an appraisal for a FHA streamline. How many of you know the costs of an appraisal can sometimes get you? For that reason alone, you should be doing your homework and researching what you think is best.

The main concern I have is that you go to a loan officer and have not fully done your research on the type of loan you are seeking and then get turned down. You can never have too much knowledge. Take the time to research all types of loans and decide on what works best for you.

Taffy Wagner

More and more horror stories are coming out about this mortgage crisis. Like me, I am sure many of you are realizing it is getting worse before it gets better. This past week, I read a story that stated Washington Mutual would be closing offices and laying off 3,000 workers. Has anyone started thinking about all these employees that are being laid off? I can’t help but think about them because when you are laid off from a job, everything is now subject to your lack of receiving a paycheck – your mortgage, auto loan, auto insurance, groceries, etc. Some might have received a severance package that only lasts so long. Normally, a layoff is not something you plan for and people are caught unaware and end up in situations unprepared. I digress; let me return to the mortgage crisis.

Last week I briefly shared about the mortgage plan that was being unveiled. Remember, I made a comment about what happens to the people that are already delinquent, because they too need help! Hooray seems as if maybe someone out there in cyberspace or powers that be were thinking the same thing. I just read where the Senate passes bill addressing mortgage crisis. Before you begin doing cartwheels, do you realize the House passed a similar bill back in September? From what I can understand, the two chambers must now come to an agreement on the legislation before sending it to the White House for approval.

Let me share what this bill says that the senate has passed. This particular bill would allow the Federal Housing Administration to back refinanced loans for tens of thousands of borrowers who are delinquent on payments (okay, just for that statement alone I am doing cartwheels) because their mortgages are resetting to sharply higher rates from low initial “teaser” levels. I have always believed that when people are already delinquent, you need to help them see the light at the end of the tunnel and give them some hope to know that someone out there is concerned about what they are going through. Sure, you didn’t cause them to make the choices they made; however, how much better will it make a loan officer, mortgage company or even bank look to be a part of the solution. How many people will they tell that ABC Company helped me when I thought I was about to lose my house or when I had to make the choice between paying my mortgage or having Christmas for my family.

Do not think for one minute, that consumer that was facing these trials and tribulations would not tell everyone they know how ABC Company came to their aid. I personally would be shouting it from the rooftop telling everyone I knew. If I had a blog, I would be blogging about their help, customer service and everything. They potentially begin to receive so many referrals; they would not have to advertise. Will you be a part of the solution or aid the problem?

Taffy Wagner

A few blogs ago I shared with you about the FHA Secure loan. After doing some extensive reading this morning based on the unveiling of the new plan, I found that the FHASecure has already begun helping people. According to a press release that I read dated on December 4, 2007 it stated that tens of thousands of homeowners are refinancing their exotic subprime loans with HUD’s new government backed mortgage product. HUD Secretary Alphonso Jackson announced that more than 33,000 borrowers have already refinanced their subprime home loans with FHASecure. The FHASecure is a government-insured foreclosure avoidance initiative created in September.

I was very pleased to hear this because for each one of those individuals that are helped, that is going to change their lives forever. I can imagine some of those people thinking they would not get any help and there FHASecure was. The release shared that there was an additional 20,000 in the pipeline for approval this month bringing the total to more than 53,000 in a four month period. This says to me, that if one door does not open, continue to knock and the correct door will open. You will be able to get the appropriate help. You have to seek it though.

I don’t mean to get on a tangent here but I must share this discussion I was having with a friend. We were discussing how there is so much information out there to help people and in different cultures you are taught that you do not ask for help. How do you advance in life, business or education if you do not ask for help? No one can do it alone. I want to caution you and recommend that when you are seeking help, that you verify what people are telling you. Do not take their word for it, do your due diligence and background checks. Meaning research the information, talk to more than one person. When I get the same answer from two or three people then I know it can’t be wrong. Take your time and get the best solution for you and your family.

FHASecure could be an option for you. FHASecure enables homeowners who have a history of on-time mortgage payments under their original interest rates, but missed payments after their rates reset, to refinance into FHA’s mortgage insurance program. Families with high-cost mortgages and mortgages that are due to reset, but are still current on their loan, also continue to refinance through FHASecure.

The release continued to share that as a result of extensive nationwide consumer outreach, more subprime borrowers recognize they have a choice and are turning to FHA for assistance. FHA’s toll-free call center has received more than 137,000 calls over the past three months. Nearly 900 FHA-approved lenders around the country are participating in FHASecure by helping families refinance with home loans insured by FHA. Don’t prolong what could be your answer to a very stressful situation.

Taffy Wagner

As I was watching early morning news this morning and I do mean early, there is tons of talk about the unveiling of a mortgage relief plan to be revealed later today. What I have found interesting is the different views that I heard. One gentleman said is it really a relief plan or is it the usual we’ll step in and attempt to bail out. With all the news on foreclosures, everyone is waiting to see what is truly going to happen.

Before I share what the mortgage relief plan is supposed to be do I want to say the market seems really bad for homeowners right now. I remember briefly hearing that the Mortgage Bankers Association reporting that home foreclosures hit an all time high. I continue to drive through our neighborhood to see what homes are for sale now that were not for sale two weeks prior. I read a story in our local newspaper earlier this week where this family was choosing between celebrating Christmas (purchasing gifts) or paying their mortgage keeping their home out of foreclosure. The story went on to share that how in the 6 and ½ years they have watched their payment skyrocket 66% to $2,454 because of home equity loans for repairs, delinquent fees and an adjustable mortgage rate that has risen twice in the past six months. Unfortunately this is probably more of the norm right now than being uncommon.

Will this couple be one of those that can receive help from this mortgage plan? I don’t know. From what I could glean from my research of this plan, seems as if the initiative is designed to put a 5 year “freeze” on teaser rates for some who face default on their subprime mortgages. Everyone would not be eligible of course. Seems the ones who are eligible would be if they are current with their teaser-rate payments and cannot afford higher interest payments would be eligible. Those who have been delinquent, would not be eligible. Says they can work it out with their lender on a case by case basis. Now maybe it is me, but, as I was reading this information I was thinking, the ones who are delinquent need help as well. What could they possibly work out with the lender when they are already dealing from a position of being upside down on their payment. I remember when I was a person that was in debt and talked with someone to help me, I felt as if I had to take whatever they offered because I was already delinquent. I would not have ever thought to propose another option because I was late on the current bill. How many people are going to be helped by this and will they be able to remain current on paying their mortgage without the increase in rates? I sure hope that a lot of people will be helped and able to keep their homes. Stay tuned and watch the news later today when this plan will be unveiled.

Taffy Wagner

Enough of this renting, go out and buy a house.

Should you rent or own? Owning is my advice. I am sure that is your preference also. Don’t get discouraged if you are not there yet. But perhaps you should grow up instead of being discouraged.

Life has a way of sobering us up doesn’t it? The sub prime mortgage implosion took away options, where being patient is the new answer. Take note, patience is part of being an adult. All too few of us like being patient.

The past programs giving 100% loans if you had a 580 credit score was irresponsible. An industry with standards lost its way. So now you have to do business the old fashioned way: prove your income, have a credit score, maybe even put some money into the purchase. (Oh Shame)

Much of my career has been using FHA 3% down programs to purchase. This is probably your best option in the future. Back then I dealt with some who hadn’t grown up. Putting 3% down seemed impossible.

If you think you are mature enough to have someone loan you a few hundred thousand dollars be also mature enough to add some skin to the game.

When people said to me I can’t save 3% I wanted to send them to the corner for an hour. Of course you can. Sacrifice or time might be required.

The people who bought homes with a 580 score and 0 down were trading maturity for wanting their popsicle before lunch. Get your priorities straight. Are you a parent or a child? Act like it. Go save some money.

Pride might keep you from getting a second job. Fear might keep you from talking to a head hunter. Lazyness might play a role. Pride, fear, lazyness are qualities of the 12 grandchildren we have under 8 years old.

So the issue probably isn’t should you rent or own. The problem is are you a child really, instead of an adult.

Larry Cragun