The Washington Post had an article the other day about the rise of FHA Loans in the DC area and across the country. It’s a great piece that covers the many benefits of FHA Loans that include:

It’s a great article with the personal stories of borrowers have been helped. One particularly interesting (and encouraging) tidbit is that FHA Loans were up 126% for the first quarter from last year.

AmeriDream, Inc. issued a statement today that had one sentence in particular that bothered me. From a press release defending Down Payment Assistance:

“In addition to jeopardizing homeownership opportunities for qualified low to moderate income homebuyers, the Administration’s position does not comport with the facts…”

The above remark was made by the organization’s president, Ann Ashburn. The word I take issue was is “qualified.” To qualify for an FHA Loan, a potential borrower must be able to put down at least 3% on their new home. If a borrower does not have enough cash-at-hand to make the down payment, he or she is not a qualified borrower. So, technically, AmeriDream assists non-qualified borrowers. If FHA reform passes there could be a down payment as low as 0%. In that case, people who could not put money down would qualify and AmeriDream would have no customers.

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 7^th 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. 

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.

First of all, thanks to everyone who voted or entered a blog in the contest.  It was a definite success and was a great way to connect with other professionals in the real estate industry.  We look forward to running it again next year.  Without any further ado, the winners are below!

We used a random number generator and the lucky winner of the $500 participation prize is Peter Toner and his San Diego Real Estate blog.

For editor’s choice, the prize goes to Rich Rosa of the Massachusetts Home Buyer Guide. We really like Rich’s mix of analytical market related posts and local interest pieces.

The popular vote winner is NJ Real Estate Report.  This was a tight race between first and second but as of Sunday, June 1 at 12:00 A.M. NJ was in the lead.  James, the author of NJREreport.com, has graciously asked us to send his $500 prize to the Newark Chapter of Habitat for Humanity.

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.

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.

We all know the importance of being informed before taking out any loan, and as more and more people take out FHA Loans it’s critical to understand your obligations before starting the process. A simple way to do this is by using a mortgage calculator. One of these such tools can be found at the Mortgage Loan Place website. You plug in your information and the calculator provides an estimate of the loan amount you could be approved for and your monthly payments. The information to be plugged in includes:

The Calculator already has the Loan Term (30) and Interest Rate (6) plugged in, but these can be changed to fit your plans. Tools like this one are a great way of understanding what you can expect before starting the FHA lending process.

Wait just a minute. As I am catching up on all the various news in the home ownership arena, I had to read this story to see if it was going to tell me anything new that I did not know. Well of course it did. Title was Foreclosures Hit an All Time High. Well you better believe this is an all time high. Look at the subtitle below:

Over 900,000 borrowers are losing their homes, up 71% from a year ago, and a record number of home owners are behind on their payments. Stop the press – 900,000 borrowers. Before long that number will be over a million. Up 71% from a year ago wow! WOW! So how many of those people are getting help. Have any of these people tried to go into a FHA Loan of some sort? Remember there is the FHA Secure or any other FHA product.

There are clearly more people fighting the FORECLOSURE battle than initially suspected. I would even go so far as to say probably everyone knows at least one person that is facing foreclosure and that person knows someone. We have all heard of six degrees of separation which I continue to find out that is true and somewhat maybe even less than that.

Imagine for a moment if you will, I want to add the Colorado Rockies to this analogy because last year they made it to the World Series. Okay, let’s imagine that there are three men on base and there is a guy up to bat. The guy at bat is thinking if I hit a home run, everyone will go in. Bases are load and the first ball is thrown. It is clearly a ball. The second ball is thrown and it a strike. Everyone on the bases is thinking this guy has a history of hitting home runs. The third ball is thrown and he hits a homerun. It is so far out of the park the other team could not even think about trying to catch it. Think about this happening 900,000 times for all those borrowers that are losing their home.

Maybe they were on base 1 and attempted to contact someone before they became behind the first time. Well nothing happened. Then they made it to second base and became behind two months. Since no one contacted them they did not roll the dice. Then they got to the third base and became behind more than two months. Then they reached that crucial month and now it is too late. They are facing foreclosure. They just became one of the 900,000.

What you have to say to yourself is you do not know all the different situations that have led up to the foreclosure for these homeowners. It could have been job loss, health issues, predatory lending or something else. I want to say brace yourself because I believe those numbers are going to continue to rise. We have not even seen the worst of these headlines. Every day clearly someone is facing a choice that they do not want to make regarding housing.

Dr. Taffy Wagner