In a recent story reported by the Tri City Herald out of Washington, FHA loans are set to move forward at a much faster rate. In their report issued on June 25th, there is evidence that the number of home buyers looking for secure loans through FHA is increasing. This is the same sentiment happening in many cities around the country.

Lenders offering conventional loans are making it more difficult every day for the first time home buyer to get into a home. Those without high credit scores or a significant down payment are finding it difficult, if not impossible to get into the American Dream scenario of homeownership. This has crippled many opportunities for potential home buyers across the country. If you cannot prove yourself through a first time home loan, how will you ever get into a home at all?

FHA has the goal of helping those without significant histories of credit worthiness. They provide insurance to help mortgage lenders accept the less than ideal credit score or the low down payment. First time home buyers are turning in record number to the FHA loans because they are the only opportunities available to them.

Yet, is using an FHA loan a bad thing? Even those who would otherwise be able to get into a conventional loan should be thinking about the benefits of FHA. This includes a lower interest rate, more security, lower down payments as well as the simple fact that lenders are willing to loan with FHA insurance backing the loan.

In the report issued by the Tri City Herald, it shows this through the numbers. From October of 2007 through May of 2008, some 722 FHA backed loans were put in place. That is more than a twelve month space from October of 2006 through September of 2007 (that time period say just 683 loans in a significantly longer period of time.)

The same scenario is playing out in many areas of the country. The fact is, first time home buyers often need this type of loan to get started on the home ownership path. Yet, many other home buyers that would qualify for conventional loans are still seeking out FHA loans because there is less risk and worry.

Are you ready to move forward with a home purchase? If so, find out if you qualify for FHA loans. It could mean the difference between getting into a home or not, but more than likely it means more security.

The number of FHA loan applications see through FHA loan specialists is growing…surprisingly. In fact, for some bankers, that is all they are seeing happen. Why are so many people looking into these loans? There are several reasons and it all comes down to the overwhelming benefits of FHA loans. The number of FHA loans secured in the first quarter of 20008 when up 126 percent compared to the same quarter last year. Make no mistake, these loans are only a fraction of the market share, but they are growing faster than any other type of loans out there.

Reduced Restrictions Push Numbers Up

One of the key benefits of FHA loans is the reduced down payment. This, along with the lessened credit score requirements seem to be helping. That is what people want to know. They can pay less for a loan with lower interest rates because FHA loans offer lower interest rates to borrowers with a bit more risk. They also do not have to have a large down payment, which has harmed many people in the past.

In addition to this, the government approved an increase in the amount of money that can be borrowed through FHA loans, which has drastically helped many of the country’s more lucrative investors in locations such as California where a home is double what it is elsewhere in the country. The increase moved the maximum allowed to be financed through FHA up to $729,750, nearly doubling it.

If you are currently struggling with your loan, FHA refinancing is also quite lucrative since many of the same benefits are in place. For those homeowners who took advantage of the lower adjustable rate loans a few years back and are now facing adjustments in those rates, refinancing into an FHA loan can help them stay in their home.

It is helping many people. Consider this. As reported by Chron.com, Wells Fargo spent some time working to train real estate agents on the benefits of FHA loans. To do this, they welcomed agents to movie theaters around the country, where they broadcast live training sessions. Their goal: teach agents about FHA loans in the hopes that these agents would in turn promote the idea to their interested clients. In doing so, the company saw an increase of 342 percent over 2007 in volume of loans serviced.

It’s Effects On You

FHA is an option for many borrowers. If you find yourself facing lenders who turn you away because your debts are higher than others are or because your credit score isn’t as high as it could be, these loans can work for you.

I highly advise anyone that is considering applying for a new home loan or are considering refinancing a current loan to look into FHA loans. They are not for everyone, of course, but they do offer benefits where other loans are often holding you back.

Consider the current real estate market. You have the goal of owning property. You have the goal of buying a home. You do not have a credit score that is stellar, but you have a job and are making decent money. You do not have a down payment. Although you could do very well in a home loan, some lenders will tell you no shutting the door on your dream home while just a year ago they would have been welcoming you in. That is harsh, but it is today’s reality. If this happens to you, FHA loans are more flexible and ideal for some borrowers. Do not sign on the dotted line until you have considered all options.

As for the FHA numbers being up, that is a sign that people need this organization to keep them buying homes.

The FHA is out there to help. This week, the second phase of the direct mail campaign the agency has in place will roll out. That means that some 675,000 people who are considered at risk for losing their home will get help from the agency, or at least the offer of help.

The agency will mail out thousands of letters this week to those who are going through foreclosure as well as those who are at risk for doing so, to offer help. The agency has used this method to get people back on track for their loans, and help them to avoid foreclosure. The FHA is offering a method that allows these homeowners to get into better mortgages that are safer to the homeowner (and the lender) as well as helps them to get out of the higher costing mortgages they are currently facing.

A few months ago, the organization provided the same type of help to some 280,000 people. In that batch, from February, was just the first round. They plan to help at least 850,000 homeowners by September of 2008. The letters are part of the organization’s public awareness campaign, which stresses that homeowners have options beyond foreclosure.

There has been quite a bit of talk about foreclosure being the only solution for many struggling homeowners. While many people have selected to cut their losses and run, this is highly risky. Not only do they lose any investment into their homes they have made over the last few years, but they also put themselves in a situation where they may not be able to purchase a home for some time through damaged credit and financial struggle. This FHA program is alerting those homeowners best positioned to stay in their home through new loans.

In a statement about the letters going out, the HUD Secretary Steve Preston had this to say, “This letter might be the most important piece of mail many of these families will receive this year. This information could not only help save their current home, it could help provide them with long-term financial security. This outreach campaign will ensure families are aware of the safe mortgage alternative offered by FHA.”

Who Gets The Help?

The letters being sent by the FHA are a small fraction of the help available, but those receiving the letters should take advantage of them quickly. They are headed out to those who have already faced or are currently facing their first reset of the adjustable rate mortgage they have.

If you are one of the many that will receive this letter, act on it. FHA loans are highly desirable because they are backed by the federal government, are more affordable and they are safe, unlike many of the high risk loans out there that many homeowners are struggling with currently.

At the same time, if you are unable to get the help you need, or are facing a reset of your mortgage interest rate soon, you can still get help, even if you do not receive one of these loans. The FHA is available to anyone in the United States, though there are loan requirements.

If you are interested in finding out if you qualify for FHA loans, take the first step. While the organization cannot help all borrowers, it can help those that are struggling, those getting into loans, and even some of the higher loan amounts (the FHA has been approved to lend to those homes with values up to $729,750 through the end of the year at least.)

For those that get a letter from the FHA, do not make the mistake of tossing it out. It will be the most important letter you receive.

Throughout this year, the evidence that the housing industry was suffering has been everywhere. Every time you turn around there seems to be another position on the table. A new solution, a new opportunity, a new way to fix the problem…these have all surfaced. Yet, with each one of these new situations there comes the “what if” situations.

On June 9th, the Federal Housing Administration Commissioner Brian Montgomery made a very interesting statement to the National Press Club. He said that there was his agencies just could not handle any more bad loans, which is one offer or opportunity on the table being discussed. He said, “This is a worrisome idea,” CNN reported, “FHA is designed to help stabilize the economy, operating within management, low risk loans. It’s not designed to become the federal lender of last resort, a mega agency to subsidized bad loans.”

These remarks are meant to table the discussion happening in Congress currently. There is legislation on the table that would have FHA backing up an estimated $300 billion worth of worrisome mortgages. This translates into about 2 million loans.

What is your stance? Should the government really back up these troubled loans? Are you one of the people who are struggling and would like that helping hand from the government?

The concerns go much further….

Montgomery went on to list various reasons why this type of scenario would be troublesome, saying that it would weaken the FHA situation badly. In his own words, Montgomery said his agency has been, “hobbled by low loan limits and higher down payment requirements.” He continued adding that his agency, “was priced out of some housing markets.”

Credit and FHA Standards

One aspect of this entire situation that is new is the way FHA is currently looking at their potential borrowers. For the first time in the agency’s 74 years, it is now pricing loans according to the risk level the borrower possesses, which could be risky for some of today’s FHA borrowers.

Doing this is often believed to be worrisome. It implies that those that have high FICO scores would get the lower rate, while those who are more at risk with a lower FICO score would be a higher rate. What is unique about this is that many people jump in here and claim that this would actually hurt the industry, after all, are not the people who need the most help being charged the most?

According to Montgomery, that is not the case. In fact, he said, “Contrary to conventional wisdom, FHA families with lower incomes have higher FICO scores.” He says, “These are hard working American families who live within their means and pay their bills.”

This would imply, then, that FHA is helping those with lower incomes to get into the homes they want because they are better credit risks than those with a bit more income and lower FICO scores.

What About You?

What situation are you in with your FHA loan? Are you hoping that the government offers more programs to help you get out of the loan or into one that is better protected? As a homeowner, you can wait around until the government makes decisions, or you can put the future of your home in your own hands. Various FHA loan programs could be beneficial to you are already available. Many people will qualify for help under the current program offered, which means that you could save your home loan even if you are currently facing trouble now.

I highly recommend that you invest the time into finding an FHA solution for yourself, instead of letting the government battle it out.

There is a lot of controversy among the American people today about the housing crisis. Walk into any coffee shop or join any financially related blog or forum online and you will quickly find that there are people that are very angry with the foreclosure mess. With the government trying to help so many lenders who have fallen into difficulties with their home mortgages, and FHA guarantees being made for some of the more controversial loans ever, there is a lot to be concerned about.

Some people believe there should be no handouts to those borrowers who took on too much of a home, or did not keep up to date with their mortgages for other reasons. Others believe that extending a helping hand to those in need right now will strengthen the overall housing market and therefore help keep everyone’s house values from plummeting even further. Still others believe this type of correction has been long coming.

Regardless of this, there are plenty of victims out there of loan fraud. It was especially prevalent during the last few years when brokers, everyone, and their brother it seems were contacting home loan holders and encouraging them to refinance. Lower interest rates, better terms, or the ever important “lower monthly payment” are just some of the sales pitches. To the uneducated or those that simply did not know better, these loans seemed like good opportunities and so they refinanced. They got into adjustable rate mortgages they could not pay once they reset.

Avoiding Loan Fraud

No matter whose fault it is or was there are definitely those preying on them. The good news is there are several things you can do to keep yourself from making the wrong decisions about your loan in the future.

• Look into local homeownership education courses, which are available to you through HUD or other approved agencies.
• Find a trusted real estate agent not trying to sell to you but able to help you really understand all of your options. References from other satisfied customers are always beneficial.
• Always have a home inspector that is working for you do your appraisals. Even if the lender has a professional do the work, have an independent organization help you as well. You want to know the true worth of the property
• Do not fall for false statements: the lender has to be as thorough with the information as you ask them to be. Every single piece of paper that is given to you must have your signature only if you fully understand it. Have an attorney, working for you, by your side.

Mortgage fraud and loan fraud are running rampant. Do not put yourself at risk. Be educated and avoid the pitfalls that may come down the line.

In the recent news is a lot of information about the subprime markets, the worries about foreclosure, but if you are current on your mortgage or have less than perfect credit and want to buy a home, where does that leave you?

I admit, the news of late especially with Congress trying to pass a bill to help move the housing market along is interesting and it has consumed some of the headlines. However, let us not forget that we are moving into the largest house buying time of the year: spring and summer. People move much more often in the summer months mainly because the weather is nice and the kids are out of school. If you are considering it, you may be consumed with worry about your less than perfect credit.

The housing market “crash” and the “credit crunch” are worrying plenty of people who want to be in a home. Some are staying in rental opportunities longer now than they would have just a few years ago. That may not be necessary. In fact, there are some outstanding opportunities for people to get into homes right now.

Avoid Subprime

With the fall of the subprime lenders, you will find it more difficult than ever to find a lender willing to loan to someone that has a low credit score. Rightly, so some people with credit scores that are too low will not be able to find any type of lending opportunity even from the FHA. Yet others, who will fall somewhere in the middle may find a lender.

FHA is able to help those with spotty credit scores to get into a home. They offer loans that do help consumers working on improving their credit, with proven income and employment. There is no doubt that you may pay a bit more for a loan this way through some lenders, yet the FHA programs do offer help to those looking for a way to prove themselves.

You will need to prove yourself to the Federal Housing Administration, though. To have approval for an FHA loan, you will need to provide details of your income, back records, paycheck stubs and anything else that can prove that you are a viable applicant. The FHA is not in the business to secure too risky loans, and these checks help to insure that is the case.

Is This New?

You may believe that this is something new that the FHA programs are doing. That is not the case. In fact, the FHA has a strong history of stepping up to the plate whenever there is a housing scare in which lenders are no longer willing to provide as flexible of loans as they used to.

An example of this happened in a recession during the 1980’s when many of the Texan housing markets fell drastically because of the oil situations there. While lenders reigned in their lending abilities or willingness, the FHA stepped right in to help stabilize the industry. In fact, the very foundation of the FHA is that of helping to establish home ownership in the United States (it was created during the Great Depression to help people buy homes.)

I highly recommend if you are in a situation where you have a good income history and can afford a mortgage, but are worried about shaky lenders, to use the FHA to help you get the home you want. You do not have to wait for a better market, especially when a number of opportunities like low priced homes are available. While the FHA cannot help everyone searching for a home with bad credit, it is able to help many that need and deserve an opportunity.

I was shocked to hear that a public service announcement was in use as a way of letting people know that it is illegal to discriminate against others who want to borrow money to buy a home. Really, this is 2008 and perhaps it is a bit naive to think that this is something that is finished. The fact is, the law is clear. You should not be discriminated against for any reason, especially your race, your religion, your familial status, your national original, your color or a disability.
What Is That About?

HUD announced that it was putting in place a public service announcement that would begin airing throughout the country on television as well as radio. The goal is to educate minorities of their right to own a home. According to the official press release out of the U. S. Department of Housing and Urban Development, the service announcement will feel Denis Haysbert, who you may know better as President Palmer on the television show “24.”

Here’s how the public service announcement will play out, according to the press release, “The PSA shows Haysbert, sitting in a café, drawing his dream home on a napkin and explaining that it is illegal to discriminate in lending because of someone’s race, color, national origin, religion, sex, familial status, or disability. The PSA ends with the tagline “HUD - One Call. Many Answers,” and encourages people to call HUD’s fair housing hotline, 1 (800) 669-9777, or log onto HUD’s Web site, www.hud.gov/fairhousing, if they believe they have experienced lending discrimination. “

Discrimination in Lending

If you feel that you have been discriminated against, now is the ideal time to step up. Even more so, if you feel that your lender is not doing enough to help you get into the right mortgage for you, I urge you to take action. FHA is an ideal program for those that are low income but able to make home mortgage payments. It is also an ideal way to get out of those subprime loans.

According to the press release, African Americans and Hispanics receive less information regarding the loan terms as well as often charged a higher fee. They are often told not to apply for the loan. Legally, it is unlawful to do these things. If they are happening to you, the Fair Housing Assistance Program can help you. You can contact them at 800 669-9777.

If you are struggling with a lender, give them a call. Alternatively, contact a lender that is willing to work with you. While there is discrimination out there, it does not come from all lenders.