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Recently reported, out of the 400,000 homeowners in America struggling with their mortgages, only a few, in comparison, have actually been helped. Congressmen and women have been pressuring the US Treasury to come to the aide of the homeowners, and are preparing new legislation as I write this article. Financing programs have been initiated, but are they enough to help?
The Federal Housing Administration introduced the FHA Secure loan last year for non-FHA insured mortgages which are currently adjustable rate. The adjustment of the rate must be the cause of the unaffordability of the mortgage payment. This program has helped many remain in the homes, but what about those with fixed rates, and those who have government loans, such as FHA?
October 1, 2008, FHA announced the Hope for Homeowners Program (H4H). Thus far, the lenders have been resistant to the program, citing they would rather absorb the cost of foreclosure proceedings than the loss received by reducing the mortgage balance to 90% of the current property value. FHA has even increased the maximum loan to 96.5% of the value, but the lenders remain reluctant. So, what recourse does the homeowner have?
For those with non-FHA adjustable rate mortgages, the FHA Secure may be the answer. Another option is the short refinance. This one is a bit tricky, though, because not only does one have to qualify for the new FHA mortgage, but the current lender must agree to reduced the payoff of the current mortgage. However, this is not impossible. And for those with good credit and a good mortgage payment history, this is certaininly an option worth looking into.
For the delinquent homeowner, a loan modification is many times the best alternative to losing your home. On December 12, 2008, the Federal Housing Finance Agency (the agency who scooped up Fannie Mae and Freddie Mac), announced a streamlined modification program making modification of a mortgage much simpler, thus encouraging lenders to modify more mortgages. In order to qualify, the homeowner must have at least three (3) late payments. Although, the Streamline Modification Program is primarily for Fannie Mae and Freddie Mac mortgages, the US Treasury is encouraging all mortgage servicers to participate in the program.
In some cases, a home cannot be saved for various reasons. When this is the case, a short sale may be the answer. With a short sale the home is sold for less than the balance onthe mortgage. The remainder is essentially forgiven if the home was a primary residence. This type of sale enables the homeowner to back away gracefully from the liability.
So, where do you begin to save your home? The first step is to call your current lender and ask for a workout program. If you are not delinquent on your payments, your lender is most likely not going to be receptive to your request. It appears that only the "squeaky wheel" gets attention.
If your lender is not willing to help you, your next step is to contact me either by phone or email, or just simply go to the following link and complete the application to see what program works for you. This can be faxed to me at 321-821-1847. www.realestateloans.com/1003.pdf
I have been helping people finance homes for over a quarter of a century, and I will not stand by and watch these same people lose their homes. It's not fair, it's not right, and it's not moral. If I cannot help you save your home, I'll be honest with you, and I'll steer you in the right direction.
Trish Sublette, Mortgage Consultant