FHA Wants to Help You Refinance
With the problems across the country in subprime lending that have spread to conforming lending, it’s no wonder FHA loans have become more and more appealing. Trouble is, few people are taking advantage of the programs being offered, including FHA Secure that allows homeowners who are behind on payments due to ARM resets to refinance.
Last week FHA started sending out letters to hundreds of thousands of American homeowners letting them know about the available programs.
Letters are being sent to homeowners who have already faced or are experiencing the first reset of their adjustable rate mortgages, Jackson said, and live within geographic locations that are currently subject to FHA loan limits nationwide.
FHA loan limits are expected to increase when President Bush signs the stimulus package into law tomorrow.
I’ve always felt FHA provides a pretty decent solution for first time home buyers, but it was neglected during the housing boom because of things like income qualification and a downpayment.
Because of its use of mortgage insurance FHA loans tend to be more favorable for lenders because their investment is insured to 80%. Despite the opportunities of FHA, it has been under utilized during the mortgage crisis.
Tanta at Calculated Risk claims -
Jackson did say that of the 200,000 and some “applications,” “over 5,000″ involved original loans that were already in default. I’m guessing that the true FHASecure caseload is about, um, 5,000. Anyone with better data is hereby invited to share. Jackson keeps repeating these numbers–which have been questioned before–and nodoby’s (SIC) calling him on it.
Previously she said FHASecure was counting every FHA application as part of the program. That’s not what it was intended for.
FHA has been slow to regain market share for several reasons.
First among those is the requirement for income and asset documentation subprime and Alt-A loans often skipped.
Secondly is the smaller amount of mortgage brokers that hold FHA licenses.
Third has to be the loan limits that restrict qualification in the highest foreclosure areas which tend to be where high prices and excess speculation have hurt the worst.
Struggling homeowners should pay attention to their mailboxes in the coming months as FHASecure can help a lot of homeowners, especially when the higher loan limits go into effect in the summer.
For first time home buyers in Utah, FHA offers highly competitive rates and monthly payments for buyers with low downpayments. FHA can also be a very attractive option for homeowners seeking a refinance.
If you need additional information about FHA or FHASecure, feel free to email or call me.