NAHB applauds FHA's on-time rollout of new foreclosure prevention programMortgagePress.comNAHB, homebuilders, foreclosure, FHA, Housing and Economic Recovery Act of 2008
The National Association of Home Builders (NAHB) has expressed
appreciation for the efforts of the Federal Housing Administration
(FHA) in meeting the October 1 deadline for opening the Hope for
Homeowners program, where FHA will insure new, more affordable
mortgages for homeowners struggling with burdensome payments on
their current home loan.
"It was critical to get this program up and running quickly in
order to help stem mounting mortgage foreclosures that add to
unsold home inventories and undermine home prices," said Sandy
Dunn, NAHB chairman and a builder from Point Pleasant, W. Va.
Under the program, the holder of a troubled mortgage must agree
to accept, as payment-in-full, an amount equal to 87 percent of the
current value of the mortgaged property. The borrower receives a
new, FHA-insured mortgage that represents 90 percent of the home's
current value, with the three percent balance going to cover the
borrowers upfront FHA mortgage insurance premium. The homeowner is
responsible for an annual mortgage insurance premium of 1.5
percent. Borrowers must meet a mortgage payment-to-income test and
agree to share equity gains on the home with the federal
government. FHA was granted an additional $300 billion in mortgage
insurance authority by the Housing and Economic Recovery Act of
2008 to operate the new program, which was authorized for three
years.
"Our members are hoping mortgage investors and servicers take
full advantage of the Hope for Homeowners program," said NAHB's
President Jerry Howard. "Replacing toxic mortgages with sound and
affordable FHA-backed loans would go a long way in restoring order
to what has been a very chaotic mortgage market."
For more information, visit www.nahb.com.
