President Bush has been a long standing opposing figure against the housing bill that’s currently working its way through Congress. His reasoning here is sound: there are too many piggyback conditions being added to the bill, which is often the case with any legislation today. Yet, today, he announced that he would no longer fight this bill’s passage. In other words, he has put the VETO stamp down, at least for now.

The housing bill has merit: give homeowners who are struggling to keep up with their mortgages the ability to find new loans, with lower interest rates and payments, so they can get back on their feet. These new loans would come from federal programs. The housing bill would also provide support to the struggling mortgage giants Freddie Mac and Fannie Mae. These organizations are in dire need of additional funding and a cash infusion.

President Bush’s problem with the housing bill is noteworthy. There is an estimated $3.9 billion worth of provisions that would be aimed at providing lenders with additional financial support (that is not homeowners, but lenders) which Bush did not agree with.

In a telephone conference call with reporters today, the White House’s Press Secretary Dana Perino made this statement, as quoted by the Associated Press. “We believe this is not the time for a prolonged veto fight but we are confident the President would prevail in one.” Then, added, “The positive aspects of the bill are needed now to increase confidence and stability in the housing and financial markets. While we have concerns with other aspects of the bill, it is important that the new authorities are put in place promptly. And so President Bush will accept Secretary Paulson’s recommendations to sign the bill.”

So, what does this mean to those who are struggling with the current foreclosure market? If and when the bill passes through Congress and President Bush signs it into effect, it could mean additional protections and more loans available to keep homeowners out of the financial stresses they are currently in. The housing bill is designed to pump more opportunities into the system.

For those who are currently struggling with home loan, it also is important to get help as soon as possible. Do not wait for this bill to go into effect. Instead, seek out the help of an FHA loan specialist to offer you solutions. FHA loans are also readily available to those who need a new home loan.

FHA loans are one of the most talked about today…that was until Freddie Mac and Fannie Mae started getting all of the attention. Recent share prices as evidence, the two mortgage giants are struggling and in desperate need not only of additional capital, but also more management. Freddie Mac and Fannie Mae are the nation’s top lenders, who are government-backed providers of funds for backing mortgages. Without them, the nation’s mortgage industry would wobble even worse.

The problem with these providers is that they have not had much guidance or any amount of regulation. There is new legislation working its way through Congress that will provide some relief. James B. Lockhart III has been heading this agency for some time, and throughout that, time has been calling for help. The problem, as he has said is that the two agencies are not required to hold a lot of capital, as compared to larger banks. That’s about to change…or it may that is.

The legislation provides several changes to the Federal Housing Finance Agency, which will now regulate Freddie Mac, Fannie Mae and the Federal Home Loan Banks. First, a regulator will be put in place that has the ability to raise the capital requirements. The regulator also has the ability to hold back executive pay at these companies. If the companies should become insolvent, the housing bill offers specific procedures to place the companies into receivership status. Also important is the drop in the highest level of mortgage backing that Fannie Mae and Freddie Mac can loan or guarantee to $625, 500, which is down from $729,750, which is the temporary ceiling that was put in place.

In addition to this, the legislation also offers a provision for a portion of the profits to be put into a trust fund, which is then designed to provide financing for those who qualify as low income people.

What does this mean to you, the average homeowner? Currently, it doesn’t mean a whole lot, not until it goes through Congress and gets put on the books. It should mean that more regulations would be in place to prevent the collapse of these important lending bodies in the nation.

However, for now, it is up to you to find the best loan for you, which Freddie Mac and Fannie Mae may be. FHA loans are an opportunity to get into a home loan without a lot of risk, too.

There seems to be many people, politicians and government agencies getting into the mix of fixing bad mortgages. Detroit has a new program in place to help those who are struggling to make their payments. Detroit is a city filled with problems. Large industries such as the automotive industry have moved away because of lack of profits. The city was the poorest and most unstable in the country for several years. It is no wonder a program like this would be offered to those in the city looking for a silver lining.

One program created by the Federal Department of Housing and Urban Development (HUD) will allow borrowers who have FHA loans to get help. The program allows the mortgage lender to submit an insurance claim on the mortgage. Typically, the government insures FHA loans, so lenders are less likely to face default themselves. When the borrower begins to fall behind on their mortgage payment, the lender issues an insurance claim on that loan. HUD then moves the loan to a company for servicing and works directly with the home owner to restructure the loan to make it more affordable. This initiative went in place just this month. It is designed only for those whose loans are in arrears, not those that have failed.

Is this a good opportunity for investment? From the prospect of the home owner, it can be. I say “can” because it is not always a good option for all borrowers. The problem is, if the home owner simply cannot afford the loan payments, even at the refinanced rate, it won’t help them. Yet, for many of these people, the problem is that their rates have adjusted and that is what has caused the problem. In these situations, this new FHA program may be just what these individuals need.

Why is the city doing this? There is evidence that any one city will be hurt by just one foreclosure within a neighborhood. One foreclosure may significantly cause home property values to fall significantly. Therefore, it is in the best interest of any city to consider programs that offer this amount of support.

FHA loans are helpful here and you do not have to be in default to get help. If you are struggling to make your payments, contact an FHA representative as soon as possible to get help. What’s more, remember that programs like this are showing up around the country, in many of the cities hurt the most by foreclosures.

I know that in recent weeks I’ve made some harsh comments about Congress being involved in trying to fix the housing market with the bill they currently have in place. The fact is, the FHA programs are outstanding and they provide help to those that can afford to stay in their homes. I stand by the fact that many homeowners who are in trouble could potentially get help from the FHA currently. In addition, should the FHA take on these new responsibilities to help those who are struggling through this bill, chances are good it is a good move for them.

Yet, what is not okay is that Congress lawmakers and politicians of the worst kind (you know, those who are really just looking to move closers to the ballot box with this vote) are getting involved. That does not bode well with me.

Back to the point…though.

If the housing bill does go through, will it rescue homeowners who are in trouble for losing their home? It could, but it is not a for sure method of getting out of the financial difficulties you are in. For example, if you cannot afford the house payment you are making now, what is to say that you can afford it in the coming months?

Essentially, distressed borrowers would be able to get refinancing from their lenders who agree to work with them with these loans. The lenders are more encouraged to do so because these loans will be federally backed with taxpayer money. They will refinance into better termed 30-year mortgages if they are in their primary home. Lenders will need to agree to cut the loan balance to about 85 percent in order for the loan to be backed.

Is this the right opportunity for homeowners, then, who are struggling?

If you are worried about your current loan, get into an FHA loan right now. If you have an upside down mortgage, try working with your lender to revalue the loan. Some are willing to avoid the cost of foreclosure. Even if the bill passes both the Senate and the House, chances are good it will not stand up to the White House Veto. In addition, perhaps it is not the right solution.

Regardless of this, if you are unable to make your current home loan payments, there is risk that you will not be able to make them later, too. This program can only help those that can afford the loans, even with FHA backing.

A few weeks ago, we talked about Congress, the Bush Administration and the FHA and a bill that was being debated. Perhaps it is time for an update on where the legislation stands.

Congress believes it has the right, and the obligation, to pass laws that would allow and even require that some $300 billion worth of troubled loans would be turned over to the FHA to manage. There is little doubt that there are risks for everyone involved in such a turnover. Nevertheless, as much as people are talking about the risks this would place on consumers, the government and plenty of other people, there has been movement within Congress regarding the process.

The bill passed throughout the House. It is now on the floor of the Senate and being debated. The bill has been expanded to now include some 1.5 million loans; most of these loans are subprime, high-risk home loans.

While the FHA is an outstanding organization and provides a lifeline to those that need it, the debate centers around one fact: should Congress step in and force the FHA to take these substantially risky loans at the taxpayer’s expense. More so, just a few weeks back, FHA announced that last year, the 2007 fiscal year, say a loss of some $4.6 billion dollars. That is the largest and most severe drop the government agency has ever seen. Yet, more risk is in order here through even more loans that are high risk?

As with everything in Congress, the Senate did make some changes to the bill. They added what is being called a modernization. This will provide the FHA with the ability to lower the amount of a required down payment by the potential homeowner while still allowing the agency to nearly double the loan limits in place. The problem I see here is that this may put even more risk on the heads of taxpayers. Tens of billions of dollars worth of risky loans could be on the taxpayer’s head. Is that the right route to take?

There is a lot of speculation as to why the FHA struggled last year. Yet, looking forward, the goal of this agency is to provide a financially sound start for those who need it. In addition to this, you have to wonder if this will help to pull the country out of its housing situation. Can one agency be called on to do so much?

Another worrisome area of the Senate’s proposal is the fact that the FHA will be able to take loans from private banks that are funding them. The problem is that these are the highest risk subprime loans, which puts additional risk on the agency.

According to Brian Montgomery who is the current FHA commissioner, the bill would strap the agency considerably. After talking about the losses from last year, he noted that the FHA would be further in the red should the bill pass Congress and be signed into law. In fact, it is not just speculation. Many of the lenders who have funded these high-risk loans are now saying that they will take the “bailout” and hand over the loans to the FHA to manage.

Reports show that people are looking for answers to their home loan needs. For many people, FHA loans are the best type of loan to fund your home, and I highly recommend that anyone that may be struggling or otherwise looking for a good deal to contact FHA lenders to find out what solutions are available to them. There is no doubt this agency has every ability to help many.

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.

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.

We’re nearing the end of our First Annual “Best Real Estate Blog” Contest.  Sunday, June 1 marks the end of the voting.  We will be officially announcing the winners of the popular vote, editor’s choice, and random drawing awards next week.

I have yet to receive any entries for the Real Estate Blog World addition to our contest.  It’s disappointing but we understand you may be too busy to attend a conference or write your thoughts on FHA mortgages.  Keep in mind we will be giving away 3 passes in June so you still have the opportunity to win those!  All you have to do is write a post detailing your opinions on FHA mortgages and email it to me (brandon at fhamortgagecenter dot com) and you will automatically be entered for a free conference pass.  At this point, if you write anything you’re one of the winners–so go for it!

Thanks again for all of the support in our networking efforts and please contact us if you ever have any FHA mortgage questions/issues.