Government Re-Finance Programs to Help Homeowners

In response to recent mortgage crises, government authorities announced a refinancing program called FHA Secure. This initiative offered through the Federal Housing Administration (FHA) is estimated to help some 240,000 homeowners prevent foreclosure. This is a notable change, as the FHA's previous policy would not allow for refinancing of borrowers in default. To qualify for this program you must meet the following criteria:

1)     You must have a history of on-time mortgage payments and a decent credit history

2)     Your interest rates must reset between June 2005 and December 2009

3)     You must have 3 percent cash or equity in your home.

4)     You must have a sustained history of employment

5)     You must have sufficient income to make your mortgage payments

The primary purpose of FHA Secure is to provide help to borrowers who may have been lured into costly loans by teaser rates, and are facing mortgage foreclosure. You can find more information on the FHA Secure plan at http://www.fha.gov.

Severe Problems?

A few options for individuals who are dealing with severe financial issues or can no longer afford their mortgage payments and want to stop home foreclosure:

Short sale

A pre-foreclosure option that allows a default homeowner to satisfy his mortgage obligation by selling the property in question for an amount less than what is owed. A short sale must be approved by the lender(s). At Quail Point, we offer a Loss Mitigation Negotiation Service. Please call us for details on this program.

You may qualify if:

1)  The loan is at least 1 month delinquent

2)  You are able to sell your house within 3 to 5 months (based on what your lender agrees upon)

3)  If it is a government loan, a new (lender obtained) appraisal meets the US Department of Housing and Urban Development (HUD) value requirements

Deed-in-lieu of foreclosure

This last resort allows you to "give back" the deed of your property to the lender. This will definitely adversely affect your credit and must be approved by the lender prior to mailing in your keys.

Taking a pro-active approach to avoiding home foreclosure cannot be stressed enough. If you lose your home to foreclosure, the lender may come after you to recover the balance owed that was not recovered in the property foreclosure sale. Home foreclosure is detrimental to your credit report and can be as damaging as bankruptcy. Remember that as daunting as this all may seem, your current financial problems are most likely temporary. It is important to avoid foreclosure now so that when you get back on your feet, so that you can preserve your credit and future borrowing power.

 
The FHA Secure Refinance Loan

The current economy provides many risks for homeowners and many people are having trouble paying mortgages. With mortgage rate increases becoming more and more common, it becomes difficult to make mortgage payments on time or in full. Now, for people in this situation there’s a new option, the FHA Secure Loan.

In the fall of 2007, President Bush announced the launch of a new FHA Secure Refinance Loan. This refinancing program was designed to help homeowners with high mortgage rates avoid delinquent payments and foreclosure.

Benefits of the Loan

The FHA Secure Loan offers many benefits. Here are just a few of them:

Prevention of Foreclosure

One of the most important benefits homeowners can reap with an FHA Secure Loan is the ability to prevent foreclosure. The thought of losing your home after many years of making your mortgage repayments on time is devastating but it does not have to be this way and help is at hand for people with a good payment history.

No Prepayment Penalties 

Another great benefit for homeowners is that the FHA Secure Loan, unlike other loans, is available without any prepayment penalties if you pay off the loan early. The FHA is fully aware that the last thing people can cope with is having more financial problems to face at an already difficult time.

Save Your Credit 

Having to foreclose on your home can leave your credit in disaster. Going through a foreclosure can cause you more problems in the future. It can make it difficult to get a new credit card, to purchase another home, and even to rent an apartment to live in. However, with a FHA Secure Refinance Loan you can avoid foreclosure and save your credit.

Do You Qualify for a FHA Secure Loan?

Before you apply, make sure you meet the following requirements:

1. A history of on-time mortgage payments. This history refers to the time before your previous rates expired and your loan was reset.

2. A history of sustained employment. This is to ensure that you can pay off your new loan.

3. Proof of your income. This ensures that you can pay your mortgage payment each month.

4. Three percent of the loan amount. This can be present either in cash or in equity in your property.

5. Proof that your interest rates were reset after June 2005. Or proof that they will be reset before June 2010.

The FHA Secure Loan is designed to help mortgage payers who are victims of the current economic issues and adjustable-rate mortgages. The FHA Secure Loan strives to bring liquidity to our struggling housing market and help homeowners reestablish a secure foundation.