Archive for June, 2008

FHA Q & A: Facing Foreclosure

Monday, June 30th, 2008

I was recently contacted by a couple asking for advice on their housing situation. Due to the recent market conditions, their house has greatly depreciated in value and their payments have become too much to handle. They are currently trying to work with their lender, but are still concerned about losing their home. What should they do?

I have a few major pieces of advice. First, contact a housing counselor immediately. Through the HOPE NOW program, housing counselors can help you figure out your options and, hopefully, avoid foreclosure. Plus, the counselors are available free of charge, so you’d be crazy not to take advantage of it. Distressed borrowers can call HOPE NOW directly at 1-888-995-HOPE (4673) to get started on the process.

Additionally, you need to stay on top of your lender. Lenders like Countrywide are already notorious for their poor customer service and are also working with many other borrowers in your exact situation. Don’t count on them to take care of things without a little pressure. Also, don’t be afraid to negotiate. When you lose your home, they lose money; so they should be willing to make concessions to keep you in your home.

Lastly, don’t count on pending legislation or litigation to save you. Although states like Illinois are pressing for restitution from Countrywide, no one should wait on a decision like that (which could take years) to be helped out with current mortgage problems.

Basically, take things into your own hands and be persistent.

The Many Benefits of FHA

Monday, June 16th, 2008

Although I primarily write about the standard FHA Home Loan, the FHA has a number of programs for helping out homeowners. One that I haven’t mentioned in awhile is the Reverse Mortgage. An article in yesterday’s Seattle P-I talked about the benefits of reverse mortgages and who they benefit most. Plus, the article details new changes that may allow more seniors to take out reverse mortgages:

Pending legislation may spur more senior homeowners to consider reverse mortgages. Those who have enough equity in their homes can qualify for loans of as much as $362,790 backed by the Federal Housing Administration. A housing bill in Congress includes a proposal to raise the payout to as much as $550,000 and eliminate the current limit of 275,000 reverse mortgages that the Department of Housing and Urban Development can insure.

As with any loan product, reverse mortgages aren’t for everyone; but if the circumstances are right, an FHA Reverse Mortgage could be a great choice for many Americans.

FHASecure: What Is It And Is It Good For You?

Monday, June 9th, 2008

As I went through a list of fabulously interesting topics to write about, I realized that FHASecure has been in the news.  FHASecure is a program put in place by the Bush Administration in August of 2007.  The program has a design to help struggling homeowners to get help in refinancing their mortgages so that they could get out of the hands of foreclosure.

The Bush Administration released information on the program last week.  They said some 200,000 homeowners have been able to refinance since the program’s startup and during that time, many of the subprime loans people could not afford refinanced into affordable home loans.  The program is not for everyone; in fact it is designed only for those that are at the bottom of the line, have subprime loans and need to refinance quickly to stay in their homes.

The FHA announced that it actually has refinanced 100,000 of those loans in the past three months (February through April.)  Struggling homeowners right now can still get this type of help.  The FHA is likely to help another 500,000 homeowners this year alone to help get out of subprime loans and into loans they keep them in their homes.

Getting Help

If you are one of the many struggling homeowners, I encourage you to reach out to the FHA representatives who have it in their ability to help many in struggling positions.  There is some controversy over who qualifies for the FHASecure program.  Originally, the program had a design to help those who were already delinquent in their subprime mortgages and were struggling with the resets of those loans.  However, some believe there has been a shift in that many of those qualifying for FHASecure are those that are trying to avoid programs and that want to get into the lower costing loan.

Some officials from HUD and the FHASecure program have said that this is a good thing in that these borrowers receiving help are a better credit risk than those already behind.

The Bush Administration announced some changes as of May 7th in the hopes of avoiding even more worry of the changing focus of the program.  The guidelines have expanded so that they now include more borrowers who are delinquent which have had a mortgage reset recently and have missed their payments due to it.

Other requirements also have had introduction in the way of late payments on record.  Those homeowners with a Loan to Value ratio that is 90 percent or less will be able to have a 90-day late payment on their record prior to the rate reset and can still qualify for FHASecure.  In the past, this wasn’t clearly outlined.  Additionally, all borrowers behind on their mortgage payments and that have reset adjustable rate mortgages and have a 60 day late payment on their record are also still able to qualify.

What To Do

If you are struggling with your subprime loan, for any reason, or believe you will be struggling for it in the short term, the FHASecure program may be able to help you.  Talk to lenders to find out what can be done to keep you from falling behind.  While the government is working to include more homeowners that are on the verge of missing payments and entering foreclosure, they are still heavily working to improve the situation for those that have already had resets of their loans.

Of course, FHASecure has a long way to go, and it most definitely can be helpful to some.  For other homebuyers, it may be possible to refinance into a standard new FHA loan through a standard lender.

FHA Loan Holders Get Relief From Destruction

Friday, June 6th, 2008

In recent weeks, there has been a lot of destruction.  Much of the south and central portions of the country have been ripped apart by devastating tornados.  Floods, hurricanes, earthquakes and terrifying thunderstorms have left a path of destruction across much of the country.  Homeowners are barely able to find shelter and yet many are fearful of what will happen to their home’s mortgage.

For many people who have FHA insured loans, there is some relief available.  According to the guidelines of most FHA loans, the lenders are not able to press you for payment in such circumstances.  They cannot file for foreclosure on your home until a fully 90 days has past.  This gives you time to get things back into place, at least financially speaking, or to find another option.

If your home had damage or destruction, this type of FHA loan backing can be quite helpful (perhaps yet, another reason to consider FHA loans over other types whenever you qualify.)  Now, not all thunderstorms will qualify for this type of help.  It is meant to be in use in only a handful of the worst situations.  Areas that the President has declared to be a disaster area are those that will qualify for this relief.

In addition to this, if your place of employment has been damaged or destroyed at the hands of such weather occurrences or manmade events (like wildfire for example) you too may qualify for such protections even if your home hasn’t been damaged at all.

The FHA insurance on your home is there to help protect you from losing your home, but you still need to talk with your lenders and get into the necessary programs.  Because most lenders are more than willing to keep a good paying customer in their current mortgage, they are likely to have some solution for you.  This can drastically help them save you as a customer and the FHA programs are there to help provide reassurance.

If you believe you may qualify for this type of backing, contact your lender today.  Find out if your particular situation qualifies.  You can also contact your local HUD offices to learn more about the help that is available to you here.  Chances are, there is protection available o you through your FHA loan.