Bush adminstration continues to help families stay in their homes during housing crisisMortgagePress.comGeorge W. Bush, U.S. Department of Housing and Urban Development, foreclosure, National Homeownership Month, Roy A. Bernardi
The U.S. Department of Housing and Urban Development has
launched a month-long campaign to continue helping families avoid
foreclosure. For the duration of National Homeownership Month, the
Bush Administration will focus on how Americans can utilize the
Federal Housing Administration (FHA) as a resource to keep their
homes during this time of uncertainty in the housing market. FHA is
at the center of the Administration's targeted, financially
responsible efforts to help qualified homeowners refinance into
safer, affordable mortgage products.
"Many Americans are facing the possibility of foreclosure and
they need to be made aware of the options that are available to
them through FHA," said Deputy Secretary Roy A. Bernardi. "To stop
this cycle of foreclosure, Americans need to be better educated
about the home buying process. They need to know what they are
committing to when signing their name and know what mortgage best
suits their needs."
This year's theme - "Back to Basics" - is designed to underscore
the importance of having strong, common-sense fundamentals as a way
to maintain a sustainable housing market. Many of those basics
(verification of income, ability to repay) were ignored in the
lead-up to the housing bubble. The Department will focus on helping
families learn what the federal government is doing to help
struggling homeowners; how to protect themselves against predatory
lending; to better understand what goes into owning a home; and how
to own a home they can afford.
At foreclosure prevention workshops and other events planned
throughout the month of June, HUD officials will meet with
prospective homebuyers and provide them with information to help
keep them in their homes. On June 9, HUD's Assistant Secretary for
Housing-Federal Housing Commissioner Brian D. Montgomery will
deliver the keynote address at the National Press Club in
Washington, D.C. He will assess the overall state of housing and
the role FHA is playing to stabilize the market and help families
avoid foreclosure.
"During the month of June, we will continue to provide
educational outreach across the country about the importance of
getting the market focused on a back-to-basics approach. FHA has
always been about the basics: verifying a borrower's income,
ensuring their loan is affordable and helping them stay in their
homes," said Montgomery. "We need to learn from the mistakes of the
past to ensure that the American Dream of homeownership remains a
bedrock of our society."
The Bush Administration has implemented a comprehensive plan to
help families avoid foreclosure:
• In April 2006, President Bush first sent Congress an FHA
modernization bill that could have prevented some problems in
subprime loans market from occurring in the first place. This
legislation would allow families to refinance with safer, more
affordable FHA-insured loans. Final legislation still has not been
sent to the President for his approval, over two years later.
• In August 2007, the Bush Administration launched a new
initiative at FHA to modify its refinancing program, FHASecure, to
help creditworthy homeowners swept up in subprime loans who missed
payments after their teaser rates reset.
• In February 2008, President Bush requested $65 million
for housing counseling in his Fiscal Year 2009 budget request. The
Administration has increased funding for HUD's 2,300 approved
housing counseling agencies by 150 percent since 2001. Fifty
million dollars was approved for counselors in Fiscal Year 2008.
Another $180 million went to the non-profit NeighborWorks this year
to help them counsel struggling homeowners on how to prevent
foreclosures. These programs are effective: 96 percent of
households that saw a HUD-approved housing counselor and completed
the program in the first three quarters of 2007 avoided
foreclosure.
• In March 2008, as part of the President's economic
growth package, FHA temporarily increased its loan limits until the
end of 2008 to help hundreds of thousands of more families in
high-cost areas purchase or refinance their homes at an affordable
price. The new temporary limits range from $271,050 to
$729,750.
• In March 2008, the Bush Administration proposed reforms
to the Real Estate Settlement Procedures Act (RESPA) to help
American homeowners better understand their mortgages and to allow
them to shop for the best loan offer. Under this proposal, home
buyers would be presented for the first-time ever with a standard
form disclosing the important aspects of a loan. This new
disclosure would ensure that home buyers are provided, early in the
home buying process, complete, accurate and understandable
information about their mortgages.
• In April 2008, the Bush Administration announced an
expansion of FHASecure, which will start in July, to help
homeowners with subprime adjustable rate subprime mortgages who can
no longer afford their mortgages and missed up to three monthly
mortgage payments over the past 12 months. Rather than go into
foreclosure, eligible borrowers can refinance with FHA and lenders
can voluntarily write down the outstanding subprime mortgage
principal balances. This will provide an equity cushion and protect
taxpayers against risk.
• Starting in July 2008, FHA will expand FHASecure using a
fair, flexible premium structure. This pricing change, the first in
FHA's 74-year history, will better protect FHA's solvency and
ensure taxpayers do not assume the cost of this expansion by
charging borrowers mortgage insurance premiums based on their
credit risk.
More than 220,000 families have refinanced with FHA since
September 2007. By the end of 2008, the FHA expects to help
approximately 500,000 families stay in their home since the start
of this effort. These policies complement FHA's strong loss
mitigation program, which helped 65 percent of FHA borrowers who
fall into serious default avoid foreclosure. Finally, HOPE NOW, a
private sector alliance to help homeowners avoid foreclosure,
recently announced that mortgage servicers have provided nearly 1.4
million loan workouts since July 2007.
For more information, visit www.hud.gov.
