FHA refinancing helps more than 325,000 families mortgage relief MortgagePress.comFHA, HUD, FHASecure, refinance loan, loan-to-value
U.S. Housing and Urban Development Secretary Steve Preston today
marked the one year anniversary of the Federal Housing
Administration's (FHA) FHASecure refinancing program by announcing
that more than 325,000 American families have turned to the FHA to
get safe, affordable mortgage loans.
"One year ago, the Bush Administration proactively provided an
affordable safety net to homeowners who wanted to stay in their
homes," said Preston. "Today, with the expansion firmly in place,
hundreds of thousands of families are in a better place thanks to
FHA." In August 2007, FHA modified its refinancing program, which
is backed by the federal government, to help creditworthy
homeowners who missed their mortgage payments as a result of the
payment shock associated with interest rate resets. Previously, FHA
was only able to refinance mortgages for homeowners who were making
on-time payments. Upon learning about the safe, affordable products
offered by FHA, thousands of families refinanced with FHASecure
before they started missing mortgage payments or their loans reset.
In July 2008, FHASecure further expanded its eligibility criteria
to help homeowners who have gone into default as a result of
temporary economic setbacks.
"With FHA, families have peace of mind that their last payment
is the same as their first payment. Expanding our mortgage
insurance means more homeowners have a loan they can afford and
there is greater liquidity in the mortgage market," said Assistant
Secretary for Housing-Federal Housing Commissioner Brian D.
Montgomery. Starting in July, FHA expanded its eligibility to the
following categories of troubled homeowners:
•Borrowers who are delinquent on their adjustable rate
mortgages, but who were late on no more than two monthly mortgage
payments over the previous 12 months are eligible for the standard
97 percent loan-to-value (LTV) FHASecure refinance loan; and
•Borrowers delinquent on their adjustable rate mortgages who
were late on three consecutive monthly mortgage payments or at
three different times over the past 12 months will be eligible for
a 90 percent LTV ratio FHASecure refinance loan.
FHASecure can help additional borrowers across the nation access
a more viable refinancing option and will offer lenders an
alternative to foreclosing on these individuals. Lenders can
already voluntarily write down the outstanding subprime mortgage
principal balances to a 97 percent or 90 percent LTV ratio
depending on the borrowers' circumstances. FHA is also encouraging
lenders to make other arrangements, such as subordinate financing,
to "fill the gap" between the existing loan balances and the
FHA-insurable loan amount. The refinanced loan amount backed by the
FHA would be based upon a new appraisal, performed by an
FHA-approved appraiser.
For more information, visit www.fha.com.
