Just the Facts:
FHA Reform Takes Center Stage
Not long ago, FHA lending was just another government-sponsored program unworthy of political attention or media limelight. Now, with no less than three new reform initiatives, FHA is generating excitement, confusion, speculation, and even venom for political pundits and the media.
At YOU Magazine, we wanted to see what all the fuss is about – to put politics aside and objectively examine these reforms and the potential impact they may have on homeownership in America.
Fixing Broken ARMs
FHASecure is a new federally-insured (temporary) lending program announced by President Bush on August 31, 2007, and released to FHA-approved lenders on September 4. Qualified homeowners seeking payment relief from their adjustable rate mortgage (ARM) may be able to use FHASecure to restructure their loan into a more stable, fixed-rate program, even if they are already delinquent on payments. “Risk Based” fee schedules, which are to be released shortly, will help price these loans appropriately.
Do You Qualify?
To qualify for an FHASecure loan, borrowers must meet the following five criteria:
Even if you do not meet these criteria, you should still contact a qualified mortgage professional because he or she can often provide you with other resources to help overcome your current challenges and reach your financial goals.
New legislation passed the US house and is being sent to the US Senate. More on that by clicking below.
The House Takes Initiative
Last month, the House overwhelmingly passed FHA reform bill HR 1852 (The Expanding American Homeownership Act of 2007). The next step is the Senate where a vote is expected within the next few months.
As the bill stands now, there are a number of significant changes that could dramatically impact home lending, including making FHA loan limits as high as $729,750 in high-cost areas, such as California and Florida. It’s uncertain if the Bush administration will support the bill in its current form, but it has several features that could easily reshape FHA lending as we know it.
YOU Magazine turned to FHA expert Jeff Mifsud to highlight what this legislation could mean for borrowers in the future if this initiative is to pass in its current state:
Senate’s Blueprint for Reform
Read twice and approved by a Senate banking panel on September 19, this is the Senate’s version of FHA reform. Again, further steps are necessary before this initiative is to become law. Following are some issues that the legislation is attempting to address:
By updating and expanding FHA, lawmakers are clearly invested in removing some of the current limitations in FHA lending. All politics aside, this new flexibility will likely help many homeowners.
Home buyers, home sellers, ARMs holders, and other borrowers looking to refinance, don’t allow yourself to be overwhelmed by all of the information surrounding these initiatives. These are the facts. Print out a copy of this article and call your mortgage specialist today. Find out what opportunities are available to help you meet your financial goals.
(this is copyrighted material from you magazine, which is sent to me by several lenders. I have never done business with any of them, and don’t know which one to give credit.)