FHA Mortgage Center.com - Subprime Mortgages and FHA Reform
Millions of homeowner's American dreams are quickly turning into an American nightmare. It is old news that the subprime mortgage market is taking a huge hit due to the predatory lending practices of mortgage loan companies. Now it is time to start fixing the problem. Already the number of adjustable rate mortgages is dropping, but that doesn't help any of the people defaulting on their loans. It is the responsibility of society to help and protect the less fortunate. A federal bailout could be seen as using tax dollars to help people who made poor decisions.
The problem with that view is that the people taking out these types of loans typically do not have any other options available to them because of their low to moderate income or their less then perfect credit. These are people who risked their livelihoods on their American dream of homeownership and it is in the best interest of the nation to see that they land on their feet.
While a federal bailout would be considerably helpful to homeowners facing foreclosure, a better option would be to pass the FHA reform bill currently working its way through Congress. This bill would allow borrowers to refinance their homes at a more sensible interest rate. The bill might also eliminate the 3% required minimum downpayment for FHA loans as well as increasing the loan limits in areas with higher cost of living, making FHA loans a substantially better loan option for those with poor credit.