If the bill Rep. Al Green proposed passes into law, borrowers looking to get an FHA mortgage may once again receive down payment assistance.

The bill, HR 600 — the FHA Seller-Financed Down Payment Reform Act of 2009 — would help borrowers who don’t have the money for a down payment become homeowners. Down payment assistance was outlawed last October, but Green’s proposed HR 600 would revise the requirements for the program. By creating this type of opportunity, the number of potential foreclosures would decrease and the failing housing market would be on the rise to recovery.

“Seller down payment assistance has helped more than one million Americans who are able to afford a monthly payment but do not have the down payment needed to become homeowners,” Green said in a Central Valley Business Times article. Down payment assistance would cost the federal government nothing over the next five years and actually save taxpayers money.

Nehemiah Corp of America, who pioneered the program, said that by reinstating down payment assistance, about 600,000 working-class people would receive aid for their home purchase next year alone, which would create $150 billion in home sales.

HR 600 has been referred to the House Committee on Financial Services, of which Green is a member, and is awaiting consideration. If committee members report the bill favorably, it will then move to be voted on by the House as a whole.

President-Elect Obama announced that he would appoint Shaun Donovan to head up Secretary of Housing and Urban Development, or HUD. HUD is an important part of the mortgage industry, indirectly. This department is responsible for the housing within the country. In this administration, during this economy, this new Secretary will need to find ways to jumpstart the housing market to help individuals find the homes they need.

In his radio address on December 13th, Mr. Obama said this about the housing market: “To end this economic crisis, we must end the mortgage crisis where it began.” He continued, “This all started when Americans took out mortgages they couldn’t afford. Some were reckless, aware of the risks they were accepting. But many were innocent, tricked by lenders out to make a quick buck.” Later, he added, “This is deeply troubling. It not only shakes the foundation of our economy, but the foundation of the American Dream.”

Later in his broadcast, he mentioned that one in ten homeowners face some level of stress in regards to their homeownership.

What This Means To You

Depending on who you are and what your circumstances are, there is hope available. While the new administration will likely put in place programs to continue to support the housing within the country, there are many programs already in place to help struggling homeowners. Those facing foreclosure or the risk of getting behind on their mortgage should take the time now to contact an FHA loan specialist. Determine what your options are, including programs like HOPE for Homeowners and easy refinancing options already in place.

What about those who are looking for a home to purchase? Are they safe to buy? Many of the predator lenders are gone. They have lost their funding since investors are no longer willing to gamble with high risk mortgages. It is safe to borrow money. Commercial lenders are actively seeking borrowers who are qualified to borrow. Interest rates are very low and FHA loans are readily available to help those who are able to make payments to get into homes.

While you may not be able to improve the economic crisis fully, you can improve your financial security by considering new loans now. Home prices are low. Home interest rates on loans are low. Programs are in place for refinancing quickly and affordably. Determine if you qualify for a home loan through an FHA specialist. You may be happy to learn there are so many options available.

FHA loans used to be highly avoided by home sellers. Those who were selling their homes often requested only conventional loans because they worried about the complexities of loan inspections. FHA loans are insured by the federal government. That means that the government wants to be sure the value and condition of the home are high enough to warrant the mortgage and that they are safe to live in. The good news is that FHA loan inspections are much less complex than they used to be. The bad news is that you still have to have one to get into a home with an FHA loan.

While that’s the case, don’t worry too much about what goes into the FHA loan inspections. Even with conventional loans, you’ll want a home inspection. You want to know what hidden problems there are with a home. More so, you want to be sure that what you are getting is really worth the price you are paying for it. Therefore, view FHA loan inspections as opportunities to learn about problems you may not have noticed.

What They Are Looking For

What are FHA loan inspectors looking for? Once you apply for an FHA loan and have an offer on the home, the next step is to have an approved home inspector (who is working for FHA, not you, not the lender and not the home seller) come to the home. They will walk around, checking various aspects of the home. Most inspections take only 30 minutes to an hour to complete. You may wish to be present so you can learn of any defects or problems first hand.

There are some problems that they may require repairs to be made on before they will agree to funding the loan. Some potential problems include:

· The home has a defective roof; leaking roofs will need to be replaced or repaired. Age is less likely to be a factor assuming the roof doesn’t have any signs of leaks.

· Chipping paint may be a problem, especially in an older home.

· Handrails may need to be installed on steep steps without them.

· Windows that are broken may be a problem, though sticking or cracks may not warrant replacement.

It’s important to note that the FHA loan inspector that comes to your home is not doing the job of a professional home inspector working for you. If there are problems with the home’s inspection, the repairs will need to be made before the loan can be funded. The home seller often does repairs, but in some cases, the home buyer can do them. Once complete, the loan will move along the financing process.

There are many ways to look at the current bill in Congress that would allow FHA to take on some of the most risky loans. While I have not been very positive about this situation, if it does happen, what should the average homeowner expect and what should you do to get help?

First, if you are in a situation and need help, do not wait for this bill to pass. Instead, call on FHA as soon as possible. Find out what solutions they may already have in place to help you out of your worrisome mortgage and into a safer one. Many homeowners who are struggling to make ends meet are seeing that they do not have to lose their homes to foreclosure. Instead, they can take advantage of the programs already in place through FHA to get into a more affordable loan.

Granted, not everyone qualifies right now for this opportunity. Let us say you do not qualify for an FHA loan right now. What do you do should Congress pass this bill?

The first step to take is to talk to your mortgage lender about the options they are giving you. Yes, you hate when they call and the pressure they put you under. One thing is for sure: if this bill goes through, you will need to put some pressure on your mortgage lender to put your loan into consideration for help from FHA.

If you do not get the help you need from your mortgage lender, the next best move for you to make is to contact FHA directly or through another lender offering FHA loans. Many lenders will be more at ease to pass off these loans onto the FHA especially if they are high risk. Therefore, it may be your opportunity to make your move.

There are a few things to avoid.

#1: Do your best to stay in the loan right now, making payments as much as possible. Do not assume that you can just forget about your monthly payment. You should be actively trying to make it.

#2: Do not ignore your current lender. Should the bill pass and your home be in foreclosure to far, you may be out of luck anyway. Therefore, work with your lender. They have more solutions now then they had in the past.

Mortgage help is available to many people currently. If you have not done so yet, find out if an FHA loan can help you. You may be shocked to find out it is just the right opportunity.

With the baby boom seniors entering retirement, many of them have been left with the inability to pay for their retirement years without working. Many people in this generation worked hard, but pensions were falling out of practice. The baby boomers are less likely to be able to afford full retirement at age 65 and of course, no one really knows about the future of Social Security, it seems.

So, as I look at the options available to the average baby boomer, one thing that astonishes me is that there aren’t more people interested in working through reverse mortgages. There is no doubt that this type of lending has its controversy, but for some homeowners it is one of the better ways to pay for retirement, especially when there are not many other options.

A reverse mortgage, which the FHA calls a Home Equity Conversion Mortgage, is a loan that is backwards, so to speak. After you reach retirement age, you are able to take out this mortgage on your home, which will pay YOU a monthly payment each month. The amount has a basis on the overall value of your home now and into the future as well as your life expectancy. When you pass away, your heirs have the ability to buy the home from the mortgage company (if they want to) through another loan or with cash, or the home will be sold to repay the mortgage.Now, many seniors find this an ideal choice, but you should know the costs and know where to get such loans. In terms of cost, there is interest to consider, which can be high in some situations. As for where to get the reverse mortgage, a good place to start is with the FHA. The Federal Housing Administration actually does insure the most common type of these loans (Home Equity Conversion Mortgages.) Most FHA backed loans are more affordable, but again you want to shop around.Other banks offer them as well. National banks and local banks are willing to work with seniors to get this type of help to them. You may also want to consider the options offered by Fannie Me, which is a reverse mortgage that gives you higher limits than the standard FHA reverse mortgage, in some situations.Tips On Making A Wise DecisionBecause the FHA or other reverse mortgage loans can be tricky, costly and can upset some heirs, it is important to consider this option for financing your retirement carefully. Here are some tips to do it right.

• Realize that you cannot get your home’s full value through the reverse mortgage. Rather, there are costs that come out of it. Find a quality calculator to help you determine the amount you are likely to get.
• Be careful with closing costs, they are often quite high.
• Do not get into a reverse mortgage too young. The older you are and the higher the value of your home is, the more money you will see monthly from the payout.

In addition, the reverse mortgage can be in use in various ways. You do not have to have a monthly payment, but can use it as a lump sum or even as a line of credit. Consider your options here closely. I recommend that you only use a reverse mortgage when you have to, but do not avoid using it if you need it. While your children may want you to give them the home after you are gone, the fact that you can use those funds for medications, for trips around the world, or for anything else you may need, can be much more valuable.

There are several key problems with California’s housing market. First, many of the homes here are overpriced and the inflated values are plummeting farther and farther down. If you own property in California, chances are good you are terrified of the outcome of such concerns. Now, without getting on a soapbox here, there is a lot of worry about the housing market throughout the country. The difference n California is that prices are so much higher than any other area and they are falling quite quickly.

Here is a closer look at the problem.

• Home prices continued to grow to some of the highest in the country, as demand for properties rose and it was easy to purchase an affordable loan
• Lenders were offering jumbo loans, which are loans that are thousands of dollars more than the standard home loan in any other part of the country.
• The housing market crisis hits when the Californian homebuyer is unable to pay his adjustable rate loan reset (blame it on whoever you want, but the bottom line is, it happened.)
• Houses start to foreclose because homeowners simply cannot afford the new monthly mortgage payments.
• Lenders are losing money hand over foot and in turn determine they will not be giving out any more risky loans, subprime loans came to a halt and for the first time in years, jumbo mortgages (which financed most of these large, Californian homes) are no longer available.
• House prices fall as the properties around them foreclose. Even people without risk of paying their mortgage are seeing their mortgages become upside down, where they owe more money on the home than it is worth.
• Selling a home in California is next to impossible because of the upside down mortgage

As you can see, this is a very serious situation and there is no easy answer as to how to fix it. FHA is trying to help. They are offering more help to struggling homeowners who need loans that are more affordable. They are also working with homeowners not yet defaulting that need to keep from doing so. The Bush Administration and FHA raised the allowable amount that FHA could insure homes in this pricey neighborhood for.

The risks are still there. California is suffering, but there is hope for many who contact lenders to inquire about possible FHA help.

I want the readers to know from the outset that my heart goes out to people that feel this is their only option. I can imagine they feel this way because they do not believe someone has reached out to them in a manner they can understand. Let me paint this picture and you tell me how you would feel.

You are working and everything is going along well at the job. Your wife has a good job, the children are in school and it appears that everything is peachy keen. Bills are being paid on time and you have never been late. You have no idea what is about to happen. One day you go into work and they tell you, they are having company wide layoffs and you have fallen into that category. Unfortunately the layoff is effective immediately. There is no discussing it and everyone has to leave within your department. As you are leaving, you contact your wife at work to share what happened because you are absolutely stunned at this news. She says you will discuss it more tonight. You are semi-reassured thinking she will have a plan.

Later on that evening as you begin discussing the household finances to include the mortgage payment, you discover within two months you be in a financial hole without that regular income. You will not be able to pay your mortgage nor other bills. So your first thought it to begin searching for employment. However when that two month period rolls around you have not gotten a job. Now you and your wife have some choices to make. Bills are piling up and you didn’t pay all your bills from the month before. You are receiving creditor phone calls and you do not even want to answer the phone. You begin using a one credit card to pay another and juggling your bills. The next month rolls around and you are receiving calls from your mortgage lender. Instead of answering the phone or even looking at your mail, you have chosen to take no action.

Right about three months and two days, you have decided to move out in the middle of the night. You have felt like you have no choice. You were upside down on your mortgage and have felt there was not an easy option. You returned the house keys to the lender and literally walked away. I have to tell you as I was reading an article on the internet about this, there was a company that started titled Youwalkaway.com to assist people. I have to tell you I will go and read about this as well.

Before you walk out of your home make sure that you talk to a competent and reliable person within the home ownership industry. You might be surprised especially if you find out that you lender has been attempting to contact you and has viable options that assist you in keeping your home. However, you have been too afraid to answer the phone because you do not want any more bad news. You might be surprised at what you hear on the other end of the phone.

Dr. 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

To many that is what goes through their mind when they hear FHA loans referenced. This article is written directly to loan officers. If you are a consumer, fine, this will give you some insight. If you are the owner of a mortgage company, please listen in – rather read on.

My first mortgage job was with a large regional bank. I had been an agent for many years, head of real estate acquisitions for a developer, never a loan officer. The bank I was hired on to work with had a startup division in partnership with a local real estate company. The market was on fire with refinancing and they were having trouble getting experienced loan officers. This was about 20 years ago. See, refi booms are not new to the economy.

Being a team of rookie loan officers our management decided to delay our use of FHA. They wanted us to keep to the simpler products. Sadly, business was too good for them to ever introduce us to FHA, other than to embed in my memory their excuse, FHA is too difficult for you to learn now. I eventually moved from being a banker to being a mortgage broker. As many brokers do, I built my own book of business and became fairly successful and independent. Still no FHA in my knowledge base, I assumed that I didn’t need it, and thought it much too difficult to bother with.

Fortunately, I sat next to an old sage (I say that lovingly now) who kept hammering on me about the benefits of FHA. After many weeks, I let him help me. A whole new world of customer service was opened up. I could perform the No Sub Prime Miracle for people. Mind you, I hated sub prime and rarely performed it on people. I felt it was like a lobotomy, only do it rare instances. I could help people who had credit problems and bankruptcies in a shorter time frame. I could help people that didn’t have a big down payment. I could prove the credit report was wrong and still do the loan.

Up until the opening of my own mortgage company I became the FHA king. Yes, that is what the office called me. I loved it. I could make more sales, be competitive with any other product, and look like a hero to my clients. Do you think I earned referrals and repeat business?

I remind you this is for loan officers with the rest of you listening in: I challenge you and promise you. I challenge you to only work for a company that can provide you FHA as a product. I promise you it will be the most rewarding part of your practice.

Brokers that tell you the audits are too expensive and the restrictions are too much are telling you half truths. There are painful and expensive audits and there are restrictions, but if they are serious about providing you the loan officer with the tools you need, FHA frankly has to be one of them.

My first employer, was taking the easy road. The volume was almost more than they were geared up for with simple conventional refinances. The learning process for FHA would have been a piece of cake and not that different from other things I have had to learn. They would have had to have extra effort on their part and put a load on the underwriter they hired, but it could have been done. It should have been done.
To you my loan officer friends, not having FHA is forgivable, was forgivable, as I have now raised the bar for you I hope you know is now unforgivable.

Larry Cragun