FHA Secure

[firstsource]

GMAC Home Loans. They just made the change Monday it seems.
Charles

[novermyhead]

Does anyone know of any lenders willing to except a mortgage late for the FHA program or the FHA Secure? We had one mortgage late due to legitimate medical reasons prior to our rate adjusting. Also we have two mortgages that equal the value of $437,000, the loan we want to refinance is only for $352,000 and our home range is between $395,000 - $460,000, Homeq says it is about $436,993. Despite our mortgage late could we still qualify based on this loan to value? Are they considering becoming a little more lenient on their guidelines in order to reach out to more customers? Also our fico score is under 620.

[californiagrape]

depending on your state and county your live in; each state and county have different max loan limits.

Wells Fargo, Flag Star, First Horizon and TBW offers the FHA Secure.

i would start out with Flag Star they seem to be the most aggressive i have seen from a brokers stand point. (ck your local yellow pages or the internet for their retail branches.)

Good Luck..keep us posted with your journey..

[sevendipity]

What is TBW?

[californiagrape]

Taylor, Bean & Whitaker Mortgage Corp

To inover.....it is not a lender caveat, it is FHA's rule, they can not break it, the loan will not sell and not be insurable by FHA, so for that reason the 0X30 rule for the prior 6 months is kind of set in stone with everyone. Not a single one of the lenders can break that rule.

Grape - they have a 1X30 in the prior 6 months before adjustment, I spoke with FHA regarding that issue and they are adamant...no lates 6 mos prior to adjustment on this program. That was about 2 weeks ago.

[sevendipity]

Thanks! I haven't heard of them before.

TBW.....did some Alt A, but primarily Agency product.....FHA, VA, FHLMC & FNMA. They have left the riskier product and have now as of around August and September concentrated on the Agency product. Wholesale house for Brokers.....not a direct lender in any market that I know of. Now....Flag Star has direct retail offices in some markets and appear to be a reputable and good agency lender.

[subprime2/28]

Hi Moe, I was wondering, if I am upside down with no equity, can I still qualify for an fha secure loan?

[Moe Bedard]

For FHA Secure you need to have at least 3% equity in a property.

Maximum Loan to Value Ratios for the FHA Secure



States With Closing Costs at or Below 2.1% of the Sales Pirce
98.75% for properties with appraised values equal or less than $50,000
97.65% for properties appraised in excess of $50,000 and not greater than $125,000
97.15% for properties appraised in excess of $125,000

State With Closing Costs Above 2.1% of Sales Price
98.75% for properties with appraised value equals or less than $50,000
97.75% for properties apprased in excess of $50,000
Hope that helps!

[californiagrape]

FHA Secure is looking at the 1st mtg only not the 2nd .. the 2nd needs to suborinate (if you have a second)

if you only have a 1st; then you need to ask your lender for a short refi (your current lender needs to forgive some of your loan to allow you to refi with FHA Secure)

i hope this helps..

There are no short Refinances occurring presently, not even FHA is doing them yet.....if there is one, I would like to see it, as the side agreement after at the closing table as the ink is drying on the new loan is for the difference unsecured. Which by FHA standards is illegal...real illegal.

No you can not apply for an FHA Secure with no equity in the property....that is just not happening and will not happen to the best of my knowledge ever.

[californiagrape]

i agree with Poppy (as usual); the short refi is part of the FHA Secure program.. but getting a lender to do it is another story. Negotiation is what it is all about.

We are having enough problems with the 2nd mtgs re-subordinating to the new FHA Secure first ... i can't image the conversation you will need to get a short refi. (but if you look at it from a logical sense (not saying bank see it logically) : would it not be better for the bank, stockholder, investors and you the home owner to have this facilitated and payoff your current lender upto 97.15% (minus fees, PPP, and whatevery they charge in addition) than foreclosing and losing b/w $30 - 60k in foreclosure costs??

the policy is there but it does not mean they or anyone has to accept it.

what do you think; Poppy? is this a good summation?

The policy is there and frankly it should not be, as NO ONE is doing it, literally NO ONE. The myth keeps getting perpetrated and it is FALSE....totally FALSE. There is only one way to get the lender to eat any principle to date...find that egregiously fraudulent appraisal that was preformed, prove it with at least 3 really qualified appraisers designated with MAI designations....the highest available designation that I know of, to testify to to the fraud, and take the beggers to court, they will settle out, but still the suit has to be filed....that entails MONEY....unless you have one that is so damn good the attorney can make bank on it....from here 'til the cows come home.

So, yes the folks at FHA include it in the policy as a alternative to underwater equity issues, but no can do in the real world, oh and the reason they include it as a policy statement is that they have it in their policy as a "work out" methodology, which they themselves do not use....just like "partial claims", well they do use those in disaster areas as confirmed by FEMA, like Katrina or Rita....go figure, they have the policy, have to address it, but do not use it to mitigate hardship...

Long and short the only way to get an FHA Secure loan is to have the equity as of today, tomorrow, well as we all know the guidelines and programs, as well as the loss mitigation programs are a moving target changing daily.....one day 4 changes to programs makes an underwriter state, forget it, not touching anything today until they make a final decision as to just what they are going to allow or not....no way will we sign something that 2 hours later is no longer available and our decision is invalid. Poor customer service and entirely way to much risk exposure.

[subprime2/28]

Thanks Poppy for answering my question I addressed to Moe, regarding if I could still refi with a FHA secure loan, when I have no equity... this way I will not waste my time trying to contact various lenders to find out. Instead I will just stay focused on a rate modification. I just wanted to say I appreciate reading your replies are usually very informative and you respond quick, glad you are on this forum.

[Irish Gal]

Hey Moe (or anyone):

What's the update re FHA Secure loans ? More lenders doing them ? Who in So Cal ? I've been searching re where to apply, but have not found where exactly yet. I belong to a credit union that does not do them. Before I take a CW (final) offer, begin badgering HSBC to lower the interest rate on my 2nd and/or get a short sale going, I thought I'd try the FHA Secure (I think I qualify). I hate to contact unknown lenders and have not seen any posts re FHA Secure success stories. Any help is greatly appreciated.

Irish Gal

[Moe Bedard]

Try GMAC or IndyMac.........they are doing them........

[californiagrape]

try Flag Star Bank
First Horizon Bank
Taylor Bean and Whitaker

just to name a few..

[MRC123]

I called FHA and told them my situation with the upside down loan and I said we were not late on payments and said they we qualify and that I should contact some banks in my area and gave the the name of a few.

We took out an 5/1 interest only loan. I try to pay extra on the prinicpal every month, but with everthing else going up it's getting harder to do that.

Any updates on the FHASecure?

[californiagrape]

www.fha.gov

is the best place to go for updates on the FHA secure program..

[jazz2knight]

What are the names of the five wholesale lenders in California that you mentioned? Thanks!

Originally Posted by californiagrape

Moe is correct FHA Secure will not facilitate a loan great than the county max loan amount and the max % for your state. here in California the max is 97.15% for the FHA Secure today. (hopefully the FHA reform bill will be signed into law soon to drop the down payment to 1.5% (at last guess))

the difference b/w the amount you owe and the max loan FHA will allow for your county and max loan % can be:

1) new 2nd created. (low probability)
2) current 2nd Mtg increased by difference (low probability
3) Short Refi (like a short sale w/o the sale) lender forgives the difference b/w what you owe and what you can refi out of. (thanks to the passing of the exclusion of the"debt forgiveness" tax - some will now be excluded from it)

i know of at least 5 wholesale lenders in California who are actively facilitating the FHA Secure product today.. most started in Nov '07.

the draw back is: the mtg mkt is changing so fast each lender seems to have a different perception on what they will accept. especially when they have to underwrite it manually and increasing their buy back potential.

PS: there is a GNMA II pool that was created specifically for the FHA Secure program.

PSS: what concerns me with the people facilitating these loans; is the extreme possibility of the same group of Loan officers originating these loans and charging a premium for them.. (allowing them to over charge again - they borrower should of had a lower rate.) granted these loans will take a lot more work than a plain FHA - but that does not give someone the right to fleese the public again.)

[bitofstuff]

Is this type of loan still available ????

[Moe Bedard]

no it is not...........it was phased out as of 12/31/2008

[bitofstuff]

Is there anything that has taken it's place ???