FHA Secure

[Moe Bedard]

A new loan product called the FHA Secure Loan is going to come the rescue of some homeowners who are unable to refinance at this time and to help stop foreclosure for many homeowners who are struggling with adjustable rate mortgages. President Bush announced plans today at the White House to expand the Federal Housing Administration so that an additional 80,000 risky borrowers can benefit from its mortgage insurance program. I believe that this is the first step by the White House to combat the war to help stop the foreclosure crisis.

Bush's plan would allow risky borrowers to qualify for FHA's mortgage insurance even if they have recently become delinquent, as long as they have relatively sound credit. FHA currently does not allow delinquent borrowers to qualify for loan insurance. It would also alter the code to help borrowers refinance their loans with FHA insurance.

Bush said that ``in the coming days'' the FHA will begin a new program called FHA Secure Loan that will permit homeowners who have a good credit rating but can't afford their current payments to refinance into FHA-insured mortgages. ``This means that many families who are struggling now will be able refinance their loans, meet their monthly payments and keep their homes,'' Bush said. ``We going to start reaching out and make sure people know this option is available to them.''

This is great for homeowners who can "qualify" for this program and I am anxious to see what the underwriting guidelines will be. That will show me exactly what this will do to assist borrowers to refinance out of their current ARM and into a fixed FHA Secure Loan.

A lot ( a whopping 1.9 million plus) of homeowners will still be left to fend for themselves as President Bush announced there would be no bail out for borrowers who purchased homes that he claimed they could not afford. He forgot to mention that many of these homeowners were pushed into these loans and properties with the help of these lenders and real estate agents who were just doing their jobs and hell if they could "qualify" for a loan then they can "afford" the home. They were acting on the advice of their "trusted" professional advisors. Isn't that why we have underwriting and guidelines? Isn't that how they determine the affordability or was that all a dream and those weren't really loans at all?

What about these people?

The FHA Secure sounds all honky dory but it will not be the answer for most American's! The only answer is massive loan modifications that the President and Congress need to force lenders in helping their clients in the foreclosure process.

Hardship Letter Countrywide Home Loans Loan Modification Services

[Moe Bedard]

I am getting a lot of readers on this post so I thought I would post more info here on this the FHA Secure Loan.

BUSH ADMINISTRATION TO HELP NEARLY ONE-QUARTER OF A MILLION HOMEOWNERS REFINANCE, KEEP THEIR HOMES

FHA to implement new “FHASecure” refinancing product
President George W. Bush today (08/31/07) announced that HUD's Federal Housing Administration (FHA) will help an estimated 240,000 families avoid foreclosure by enhancing its refinancing program effective immediately. Under the new FHASecure plan, FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing…

To read the entire press release, please visit: http://www.hud.gov/news/release.cfm?content=pr07-123.cfm

LENDERS PLEASE NOTE: FHA WILL PUBLISH A NEW MORTGAGEE LETTER WITH GUIDANCE ON THE NEW FHASecure PROGRAM ON OR ABOUT TUESDAY SEPTEMBER 4th, 2007 at: http://www.hud.gov/offices/hsg/mltrmenu.cfm

Highlights of the FHA Secure Initiative:

To qualify for the new program, being called FHA Secure, a borrower will have to prove the original loan was being repaid until it reset to a higher rate and they must have 3 percent equity in the home. The FHA does not supply the mortgage loan but it guarantees loans extended by banks and other lenders.

1. The mortgage being refinanced must be a non-FHA ARM that has reset.

This means that you cannot currently be in a FHA mortgage and it's for non-FHA mortgage holders.

2. The mortgagor’s payment history on the non-FHA ARM must show that, prior to the reset of the mortgage, the mortgagor was current in making the monthly mortgage payments.

In order to quailfy you CANNOT have any prior lates prior to the adjustment on your loan.

3. If there is sufficient equity in the home, under additional eligibility instructions provided below, FHA will insure mortgages that include missed mortgage payments.

Not quite sure how to interpret this but I'm assuming that this means that in order to qualify with late mortgage payments then you need to have sufficient equity. Unfortunately, this will most likely cut 90% of homeowners out of the picture because their equity is dropping by the second and also many of the subprime mortgages are at 100% loan to value. So I'm assuming this will not help them in any way. I'm trying to remain positive about this but I also know the reality of what is REALLY going on in neighborhoods everywhere.

4. Under certain conditions explained below, FHA will insure first mortgages where (1) the existing note holder writes off the amount of indebtedness that cannot be refinanced into the FHA insured mortgage; or (2), the FHA-approved lender making the new mortgage or the existing note holder may take back a second lien that includes closing costs, arrearages or previous secondary financing.

This means that your existing loan may have penalties ro fess that FHA will not allow to be covered under the FHA Secure, so your lender will have to cooperate and waive those non-allowable debts. FHA will allow an approved second on your home.

5. Lenders must determine, as part of the underwriting process, that the reset of the non-FHA ARM monthly payments caused the mortgagor’s inability to make the monthly payments and that the mortgagor has sufficient income and resources to make the monthly payments under the new FHA-insured refinancing mortgage.

In order to qualify you must prove that the ONLY reason your were late on your mortgage was because your loan adjusted. No harships will be allowed. No lost jobs, no illness, nothing of the sort.

Additional Information about the FHA Secure Initiative:

What May be Included in the FHA Secure Mortgage Amount: FHA will permit the inclusion of the existing first lien, any purchase money second mortgage, closing costs, prepaid expenses, discount points, prepayment penalties, and late charges. FHA will also permit arrearages (principal, interest, taxes and insurance) to be added into the new loan amount.

Subordinate Financing under the FHA Secure Initiative: If the new maximum FHA loan is not enough to pay off the existing first lien, closing costs and arrearages, the lender may execute a second lien at closing to pay the difference. The combined amount of the FHA Secure first mortgage and any subordinate lien may exceed the applicable FHA loan-to-value ratio and geographical maximum mortgage amount. If payments on the second are required, they must be included in qualifying the borrower. If payments are deferred, they must be so for no less than 36 months to not be considered in the qualifying ratios.

Educate Borrowers Regarding FHASecure: The FHASecure initiative will take effect almost immediately through administrative action. Counselors should understand this new opportunity and knowledgeably present it as a viable alternative for delinquent borrowers struggling to pay higher interest rates. HUD will soon publish a Mortgagee Letter providing additional and more detailed information regarding the new initiative.

I am following this very closely and I will post any new emerging information that I find.

[Moe Bedard]

I thought I would post some more information for real estate professionals so they can get educated on the new FHA Secure Loan, so they can help their clients.

All this information is posted on the HUD website along with all of these helpful links.

This is the FHA Single Family Housing listserv for real estate industry professionals that are interested in updates to Mortgagee letters, Notices, Guidebooks, Housing Counseling, FHA Reference Guide, Mortgage Limits, Career Opportunities, Grants, Contracting Opportunities & Housing Industry Training. Please visit us at: http://www.hud.gov/offices/hsg/sfh/hsgsingle.cfm or visit our new homepage at: http://www.fha.gov

You can find a directory of states that are serviced by the four FHA Homeownership Centers (HOC) on the web at: http://www.hud.gov/offices/hsg/sfh/hoc/hsghocs.cfm

Servicing lenders can visit FHA's National Servicing Center on-line at: http://www.hud.gov/offices/hsg/sfh/nsc/nschome.cfm

For FHA technical support, please contact the FHA Resource Center: http://answers.hud.gov/ Search our online knowledge base and find answers to our most commonly asked questions. Use "live help" to get on-line technical support. You can also get email technical support at: hud@custhelp.com or phone FHA toll-free between 8:00 a.m. and 8:00 p.m. ET (5:00 a.m. to 5:00 p.m. PT) at: (800) CALLFHA or (800) 225-5342. Call FHA TDD at: (877) TDD-2HUD (877) 833-2483).

To find the FHA S/F Reference Guide on-line please visit: http://www.hud.gov/offices/hsg/sfh/ref/hsgrcont.cfm

Find out about FHA training by visiting our Events and Training calendar at: http://www.hud.gov/offices/hsg/sfh/events/events.cfm

Do you want to find out about current HUD Contracting Opportunities? To obtain a listing of the current opportunities please visit: http://www.hud.gov/offices/cpo/contract.cfm For more information please see the HUD contracting homepage at: http://www.hud.gov/offices/cpo/index.cfm

Do you want to find out about career opportunities at HUD? Visit: http://www.usajobs.opm.gov/ Please see the HUD section at: http://jobsearch.usajobs.opm.gov/a9hud.asp Application forms can be found at: http://www.usajobs.opm.gov/forms.asp

Find out about grant opportunities by visiting HUD's Funds Available website at: http://www.hud.gov/offices/adm/grants/fundsavail.cfm

For all FHA publications visit HudClips at: http://www.hudclips.org/cgi/index_cliphome.cgi You can order hardcopies at: http://www.hud.gov/offices/adm/dds/index.cfm

Do you need to find a FHA form? You can also find all FHA forms on the HUDClips website at:: http://www.hudclips.org/sub_nonhud/html/forms.htm

For information on Presidentially Declared Disaster areas and to learn how HUD can help, please see: http://www.hud.gov/offices/hsg/sfh/nsc/disaster.cfm or contact the National Servicing Center in Oklahoma City, 1-888-297-8685. Also see: http://www.hud.gov/katrina/index.cfm

This list does not provide HudHome property listings. To see the latest list of all HudHomes nationwide please visit: http://www.hud.gov/homes/homesforsale.cfm

[Moe Bedard]

There is news coming out by the minute on the FHA Secure and I want to lay it all out there for my readers, so they can get a clear picture of what it will do for them. The more I research the more I realize that it will help many homeowners but it will not help the majority of them.

Here are some excerpts from a CNN article about the FHA Secure.

Dodd has said reforming the FHA will be one of his top priorities when Congress returns from its August recess. On May 4, the House Financial Services Committee approved a bill allowing the agency to authorize zero down-payment loans and raise loan limits to serve high-cost housing markets. The bill is awaiting passage by the House.

Still, even with reforms, some borrowers could be left out in the cold, says Alec Crawford, mortgage-backed securities strategist at RBS Greenwich Capital. In a note, he said that the FHA is apparently only considering breaks for borrowers with so-called "5/1" and "7/1" adjustable-rate mortgages, not "2/28" subprime loans.

"Any change of the type we expect would probably have a small impact on the subprime market," Crawford wrote.

FHA reform got a boost from Bernanke on Monday, when he wrote in a letter to Sen. Charles Schumer, D-N.Y., that lawmakers could consider reforms allowing the agency to design new mortgage products aimed at low- and moderate-income borrowers.

According to this report, the FHA Secure will only allow breaks for homeowners with 5/ and 7/1 adustable rate mortgages. I can't even remeber the last time I spoke with someone who was in one of these mortgages and in trouble. I would estimate that the vast majority are 2/28 and 3/27 ARM's with some 2/38's here and there.

Currently, borrowers who are late on their mortgage payments, or in default or foreclosure can't refinance into FHA loans. However, borrowers holding FHA- insured mortgage loans qualify for options available in the agency's loss mitigation program.

On Aug. 10, President Bush said he supports "making sure that financial institutions like the FHA have got flexibility to help these folks refinance their homes." But he said he opposes "direct grants" to homeowners.

Will the FHA Secure realy help many people? Only time will tell. Hopefully congress will do much more to help stop foreclosure in the coming weeks like mandating lenders to offer loan modifications for victims of predatory lending and borrowers who cannot refinance but are qualified for a loan modification.

[Moe Bedard]

Do you have a mortgage or real estate industry friend who you want to subscribe to the national hoc reference guide mailing list? There are 3 other ways to sign up:

1. send them this link: http://www.hud.gov/offices/hsg/sfh/ref/hsgregst.cfm they can sign up for the email list there; or

2: forward them this email; or

3: Visit: http://www.usa.gov/ and subscribe at: http://apps.gsa.gov/FirstGovCommonSubscriptionService.php

To unsubscribe - go to: http://www.hud.gov/subscribe/index.cfm and click on "National Homeownership Center Reference Guide" and follow the unsubscribe instructions on that page.

[Moe Bedard]

Here are some comments I recieved on my other blog in regards to the FHA Secure Loan from real estate professionals.

Comments on FHA Secure

Thanks for the update Moe. Makes it easier than reading it in the paper.... Have a great weekend.
09/01/2007 by Joe Manausa - Tallahassee Real Estate

Thanks for the info. I agree that there needs to be something done to help the home owners who are running out of options.
09/01/2007 by Roy Kotz

You know the saying and ounce of prevention is worth a pound or cure. If these and other steps could slow or stem the anticipated tide of forclosures it would be good for everyone and the overall health of the economy. But there should be some very strong strings attached. Maybe, protect them from themselves by not allowing any HELOCs for 2 or 3 years if they are bailed out.
09/01/2007 by Rick Fifer

Moe, I am very confused by this post. You said...Bush's plan would allow risky borrowers to qualify for FHA's mortgage insurance even if they have recently become delinquent, as long as they have relatively sound credit.

I went and clicked on to the link that said FHA secure. I didn't see anything there about this. But just some other topics. 2nd, FHA already allows for less than perfect credit. Now, when you say that they have become delinquent, is that on credit cards? On their current mortgage?

How many times can they be delinquent? I have been doing this for 15 years and what you wrote about, I am confused and can't follow it. I am not trying to sound rude here. Just a fyi....
The last note is that you can go up to 97.75% of the value of the house on a rate and term refinance. I don't think a lot of the problem is just the credit, but the maximum loan amounts. This is what is keeping a lot of people from refinancing.

Lastly, I will disagree in your statement that so many people are blaming those that knew they couldn't afford the house. I guarantee you that there is a certain percentage that did buy a house that they knew they would have problems, but thought things would be better or get better. And to take a risk. Yes, we can blame some lenders on unscrupulous terms and the bait and switch...etc etc. But I know loan officers that told a client that they couldn't afford that house even if they qualified. And those clients said, then I will find someone else to do my loan. My opinion, stop believing the screaming public, because everyone will jump on this band wagon now.
This is just my opinion, but people need to be accountable .... that means lender, loan officer, and even the borrower. now what?


Thanks for the synopsis. I missed the broadcast while on the road to holiday fun.
09/01/2007 by Rosario Lewis

Thanks for the comments. I will post some more information about the FHA Secure Loan highlights of the underwriting guidelines now.
09/01/2007 by Moe Bedard

You're right the real answer is the fix their current loan as the majority won't be able to refinance. The problem is these loans are pooled into securities that are sold to thousands that if tried to change would damage the securities market.

FHA may be launching a new program designed to help "riskier" borrowers than originally it was designed for but HUD publicly tells the public one message but the lender's secondary marketing departments a totally different message (I.E. your delinquencies are too high, you have too many lates, you are going to be put on a watch list due to your delinquencies).
David Kosmecki - AmStar Mortgage

The best place to go to read the information about FHA Secure is HUD's site: www.hud.gov/news/release.cfm?content=pr07-123.cfm
And yes, the program is referring to it being okay if the borrower has late mortgage payments (not credit cards) following an ARM reset.
I am a little confused though as to how a borrower can have good credit with 90 day late mortgage payments. I presume "they" are not referring to a good credit score, but good credit other than the mortgage. However, most borrowers I have seen who have 90 late mortgage payments have many other late pays on other accounts. I agree that the program will probably help few people. Nowhere does the program address the problem of insufficient equity, which is a problem faced by many..

09/01/2007 by Carol Lloyd

Jeff,

I'm sure you know FHA will finance borrowers down in the 500's. Mortgage lates were not allowed under their traditional programs. With the FHA Secure Loan they will now be allowed and I am assuming that everything else will be FHA protocol.

When they become delinquent on their mortgage. It's a clear as day. I'm taking quotes from the President and the President does not know loans or what the hell FHA does. He's just reading a prepared speech and I quoted him in this post. When you're saying you don't understand me, I'm assuming you don't understand the president.

I have also known loan officers myself who told people they couldn't afford their home. But those good loan officer's are far and few between.
I am a homeowner advocate. I'm here to fight for the people and help them stop foreclosure. So, I tend to lean towards helping the people who need help right now. HOMEOWNERS! I don't care who did what even though I may post about it on here and my other websites. I'm here to help find solutions because if we don't then it will affect every Tom, Dick and Harry in this great country! Whether they like it or not.

Moe

Founder & Homeowner Advocate
LoanSafe.org
LoanWorkout.org
951-271-6283 Phone
800-734-8819 Fax
Moe at LoanSafe.org Email

[Moe Bedard]

Here is another comment on the FHA Secure from my other blog. I want to keep this subject and comments going, so we can really see what this will do to help people stop foreclosure.

From Kim: Another Victim/Another Casualty?

I agree, this will not help most people in need like myself. The Politicians want to keep their blinders on. The so called unemployment rate being low only means that people who had Executive Level Jobs are still working but at Home Depot.

Yes, they have a job but now they are being forced into bankruptcy because they lost their job that was shipped overseas so that the company could save more dollars. Of course they can't afford their current debt because it doesn't support the life style they had and that they did legitimately qualify for and pay on time for years before they lost their job.

I had a Staffing Company that was literally pushed into bankruptcy after the 911 terrorist attacks. I borrowed against equity to keep my company going and tried to hold onto what ever was left. It didn't work, the economy did not rebound and it still hasn't. I had to file bankruptcy with my business and then personally because the business debt was secured by me personally. I have had my cars repossessed, my house is being foreclosed on and I am unemployed.

We started farming on the 31 acres so we could have income that way and hope the federal government USDA programs that are "supposed" to help farmers would come and help us with bringing the loan current so we could get back on track. We were deemed eligible but they denied the loan because their guidelines did not allow for refinancing of previous mortgage payments. I have written to my Congressman, Senator, President Bush, Veterans Affairs, USDA Leader, etc. and have not heard from one of them.

My husband is a veteran of the army (12 years) and we applied for Veteran Loan (he is first time home buyer not on the loan with me) we figured I could sell our house to him and then he would be on the loan. The VA approved us and then said they couldn't do the loan because of the discharged Chapter 7 bankruptcy. We would have to wait 2 years. I know I'm not the only one who has faced bankruptcy after 911 and the depression I feel we are headed for.

I figured Bush being an advocate of the Military and a farmer himself would surely do something to help us and all Middle Class America. Nothing, in fact the only reason their hasn't been a sheriff sale on our house yet is because the Courts are so backlogged with foreclosure cases that ours keeps being moved back. I figure by November or Xmas we will be out on the street homeless.

My husband earns 120K per year and I am currently interviewing for a job, we have a produce farm that we are losing and so far we have not been able to get America Servicing Company (our loan ended up with them after our first lender went bankrupt) to answer our request for a work out agreement. We are ignored by the lender we didn't ask for and we don't qualify for anything because there are no programs to save people who were forced into bankruptcy due to small businesses folding due to 911 and the economy. It is very scary what our country is going through right now and soon many of us will be homeless (Ex CEO's of companies) with no place to live and seemingly no one cares. FHA is not going to help us.

Thank you for being an advocate for this very important issue. I don't feel as alone.

09/02/2007 by Kim Gubernard

You're welcome Kim and I hope you join my forum and my fight to save peoples home's and stop foreclosure. Let's really see what the FHA Secure will do help America's housing crisis.

[Moe Bedard]

Under present rules, the Federal Housing Administration cannot insure refinancings of borrowers who are delinquent on their current mortgage payments. The FHA Secure program is targeted at subprime and other borrowers now facing so-that are in these "toxic" adjustable-rate mortgages -- would waive that requirement, provided the borrowers' credit histories and verifiable income and assets meet FHA's standards. FHA-insured loans, were very popular before the recent subprime boom, offer fixed interest rates, 30-year terms, and do not have any kind of prepayment penalty.

They also come with a rigorous, built-in "loss-mitigation" borrower protection system whereby lenders and loan servicers are required to reach out and identify borrowers facing financial jams and attempt to modify loan terms to help them avoid foreclosure. Subprime borrowers who refinance into the FHA program, in other words, may also receive protections and mandatory loan modification opportunities they never received under their prior loans.

Bush is also asking Congress to pass tax relief legislation to remove the "debt forgiveness" penalty that id seriously hurting already wounded homeowners that have defaulted on their mortgage. Under current federal tax law, when a lender modifies a delinquent mortgage to forgive a portion of the principal balance owed, or a lender agrees to a "short sale" that includes a partial reduction in the principal balance owed, the borrower faces a demand from the IRS for income taxes on the debt forgiven.

Take this example. Say a financially-distressed borrower negotiates a workout arrangement with the lender that calls for a short sale to avoid foreclosure proceedings. The sale proceeds come in at $30,000 less than what's needed to pay off the full debt owed, and the lender decides to write off that amount. But under current tax rules, the IRS requires the lender to report the amount forgiven, and then pursues the home seller for income taxes -- in this case, on $30,000.

There have also been several bills pending along with the FHA Secure that the President is pusing to help ease the housing and mortgage crisis. In his plan, Bush called upon Congress to move on the legislation immediately, and said he would support either or both bills.

plans for HUD and other agencies to work more closely with a variety of consumer financial counseling groups to identify and assist homeowners facing unaffordable payment resets or serious delinquency.


plans to require better disclosures to mortgage applicants so they better understand the loans they obtain. Included here were as yet unspecified changes to RESPA and Truth in Lending disclosures, plus mandatory disclosure of yield-spread premium fees by mortgage brokers.

I will continue to research the FHA Secure Loan and post the facts as they come.

[Moe Bedard]

Democrats are saying the President's plan and the launch on the FHA Secure is not enough to help our country's housing crisis.

You can read the full story here at MSNBC.

"We are talking about a tiny drop in the bucket and that is really inadequate," said Austan Goolsby, chief economic adviser to Barrack Obama, the Democratic presidential contender.

About 2m borrowers are behind on their loans and more than 3m could face foreclosure in the next two years, according to consumer groups.
Consumer advocates liken the pending economic impact on Americans to Hurricane Katrina in 2005.

"This is going to be like Katrina 10 times over," said Allen Fishbein, director of housing at the Consumer Federation of America, adding it was similar to the hurricane hitting 10 US cities.

About 300,000 Americans lost their homes when Hurricane Katrina devastated New Orleans.

But the Bush administration says the next step is for banks and mortgage lenders to voluntarily reach out to distressed customers and show flexibility in helping them refinance into lower-cost loans or offer a loan modification.

But it is not clear that many of the private service companies that are contracted to supervise repayments of loans currently have the capacity, or incentive, to engineer relief for borrowers dispersed across the country.

"Non-profit organizations have an essential role to play if relief programms are to be effective," said Scott Syphax, chief executive of Nehemiah Corporation, the nation's largest privately-funded downpayment assistance program.

It's unclear exactly what the FHA Secure Loan program will do to help ease the impending tsunami of foreclosures.

As I have stated from day 1, "The only way to "cure" our country's housing illness is through a massive loan modification campaign of all of these cancer ridden toxic mortgages!"

[Thatswhatsup]

I am a libertarian so it makes me leery every time I hear about the government getting involved in our private lives. Government should secure our boarders, protect our citizens, and manage national emergencies and that is all. Now that we have an emergency, it is time for the national government to help out a little and then get out. The mortgage crisis we are in is a direct result of greed on Wall Street and has nothing to do with our current administration.

This being said I, like many, have gotten into a mortgage with an attractive rate and an adjustable feature. The Bush administration did not make me sign the papers. I did this on my own. Now that a refinance is eminent, I am glad that there are options out there. I found a good site to get information on whats up over the weekend. Go to "link removed until verified legit company". It has the president’s message and information about who qualifies for the new guidelines. It looks like I qualify and I am considering taking out a 30 YR fixed rate. I will advise on how it goes.

[Moe Bedard]

I plan to make this on of the most comprehensive FREE websites to give homoewners unbiased inforamtion on the FHA Secure Loan. Thousands of websites are starting to pop up and most are there just to gather your vital information and to make a quick buck. Not LoanSafe.org! You can guarantee you will get the right information with no tricks or bait and switch tactics that got us into this mortgage mess in the first place. So, beware.

Here is some more information from the FHA website.

"FHASecure is designed for families who are good borrowers but were steered into high-cost loans with teaser rates," said Assistant Secretary for Housing-FHA Commissioner Brian Montgomery. "These homeowners, many of whom are minorities, need a safe, affordable mortgage product that will help build wealth. All FHA borrowers pay mortgage insurance premiums to offset claims to the FHA insurance fund and ultimately prevent risk to the taxpayer."

"FHASecure will also bring much-needed liquidity to the mortgage market. FHA anticipates more lenders will offer FHA-insured loans, pool them, and securitize them with the Government National Mortgage Association (Ginnie Mae), which has the full faith and credit of the U.S. government. This guarantee makes Ginnie Mae's mortgage-backed securities the safest on the market and helps to channel greater capital into the housing market, benefiting U.S. homeowners."

I believe that this program will not come close to beneftiting everyone, but it's a great start. I feel there will be more advancements and changes to help homeowners in the near future has congress places pressure on the lenders for change.

I'm a huge advocate for a massive loan modification campaign of these ARM's to help save homeowners and our economy. This is not a bail out. It's fixing the mortgage screw ups over the last few years and saving face. So bail out critics need to get educated on what "REALLY" is going on before they report BS articles on the matter.

You can read more modifying your mortgage that in this section of my forum. More on FHA again......................

"Since its inception in 1934, FHA has helped almost 35 million people become homeowners, making it the largest insurer of mortgages in the world. The 109th Congress introduced the Expanding American Homeownership Act in June 2006 which would enable FHA to be a safe option for more underserved low- and moderate-income and minority families so they can achieve the American Dream of homeownership."

Before the Subprime boom, FHA was the only game in town for people with tarnished credit to obtain a mortgage. Over the last 5 years they were pushed out of the picture by much easier loans and much easier money. Broker and lenders chose to go the easy route, stated income, 2/28 ARM's then to deal with FHA underwriting guidelines.

Now, the brokers that are left, are scrambling on the bandwagon and the next gold rush to make some quick cash. So, please beware and use ony approved seasoned lenders and brokers to work with.

" For more information about FHASecure and other FHA products, please call 1-800-CALL-FHA or visit www.fha.gov or www.hud.gov. For a list of your local homeownership center or a HUD-approved housing counseling center, go to www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm"

I will be highlighting SAFE lenders for my readers and forum members to consult and work with in the next week. Thanks for all the phone calls and emails.

[Moe Bedard]

The FHA Secure Refinance Loan is a specialty product and I wanted to give some examples of what FHA can do for homeowners and what they have done recently to help borrowers.

• Subprime borrowers are paying an interest rats of 10% or more. Refinancing into an FHA-Insured mortgage can, on a $200,000 mortgage, save a qualifying borrower $3,000 to $4,000 in the first year.
• For the first five months of 2007, coneventional-to-FHA refinancing was up 94% from the same period in 2006. If this current trend continues, FHA will endorse over 100,000 conventional-to-FHA refinancings in 2007, compared to 64,474 in 2002.

It's very important that the FHA Modernization gets passed. For FHA reform please visit http://www.hud.gov/offices/hsg/sfh/hsgsingle.cfm

More on the FHA Secure to come.

[Moe Bedard]

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

[Thatswhatsup]

Just an update on the refinance with "link removed till verified safe lender". I signed all of the loan papers got an appraisal done and turned in my income documents. The lender has told me that I am approved in underwriting. Based on the approval, I will be closing next week. They gave me a rate of 6.75% on a 30 year fixed rate versus the 9.95% I am at now. Even though I had some serious credit issues because my house payment went up significantly, I still got approved and am in line to close. I have been turned down everywhere else, so this is a giant load off of my mind!

[Moe Bedard]

Oh yeah. Where are they licensed at? Who is the lender? That's just a domain name that your promoting. What was the approval based on? What was your situation?

Please tell us more or I will have to delete that URL.

[Thatswhatsup]

My home is in Peachtree City, GA, so I guess they are licensed in the state of GA. The lender is a group called Americas Mortgage Broker. I don't know what you mean by "What was your approval based on?" I had an ARM which adjusted and it strained me financially. By the time I decided to do something about it my credit score had gone down to the point that nobody would refinance me. Do what you want about the link, it is your blog. All I know is that these guys did more in less time than anyone else I have dealt with. If you want I will put their telephone # up so you can speak with the guy that helped me. You seem a little defensive, so I will wait for your response.

[Moe Bedard]

I just do not allow advertising of unverified vendors or lenders. Yes, I am very defensive of what lender or brokers get mentioned on here because there are a lot of homeowners that are seeking information and I want to make sure they get the "right" information. If I just let everyone throw links in here then I would have every company in the world joining and promoting their products. Nothing against you,and I am not saying your promoting them because I don't know you. It's just policy, my policy to keep this forum and website clean and safe.

[Mike86]

Yeah, I hate when you visit websites and it's just a bunch of advertising. Keep this place clean.

[ferminet]

Moe-
Good forum-
I am a mortgage lender in Michigan. When I heard about FHA Secure, I was thrilled. I got the guidelines, read through them and started working with borrowers that appear to be eligible. One big problem, however. None of the major players that I know of are willing to buy these loans. Even with FHA guarantee, all of the major servicers have declined to step in and take these mortgages. They all say they are "studying" the program. Have you heard of anyone actually doing these loans?

[Moe Bedard]

Thanks for joining!

I have been having the same problems locating a lender also. I have heard that CITI Chase and Flagstar were doing them. Have you tried these lenders?

[mar639]

Moe, I was actually hoping that Chase would do a Fha Secure loan. I am going to call them later to ask if it is possible. Since I do my banking with them maybe I have some hope.
I will update later.

[Moe Bedard]

Cool Lina, please do.

[mar639]

Chase doesn't do Fha secure they only do Fannie Mae and Freddie Mac ..
I am waiting for A chase Loan officer to call me back after I gave him all my info he is going to let me know where I stand regarding a refinance.
I might as well apply everywhere possible.

[ferminet]

Chase wholesale just started doing FHA secures, but they say they are going to be underwriting them tough. I don't know if retail will offer them.
I'm going to try a few with them and see how they handle them.

[Moe Bedard]

Great thanks for sharing that. Lina, it looks like Chase is rolling it out on the wholesale side. Which means they are offering it to brokers to originate loans under the FHA Secure. Maybe you need to talk with more people at Chase and the person you spoke with maybe was not made aware of this.