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Stop Foreclosure By Using A New Government Program |
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If your adjustable rate has pushed your mortgage payment to unaffordable levels, you may have some way to stop foreclosures. In response to the crisis of people facing default on their home mortgages because their adjustable rate mortgages are no longer affordable, the Federal Housing Administration is coming out with the FHA Secure Refinance Program to stop foreclosures.
The new FHA Secure program would help homeowners stop foreclosures, ones who have fallen behind on their home mortgage and are possibly facing foreclosure because of their new higher monthly payments. The new program would allow the delinquent homeowners to refinance their Adjustable Rate Mortgages into a fixed rate FHA loan and if you qualify for an FHA mortgage your loan will be funded by a conventional mortgage lender.
Remember, FHA mortgage loans are insured by the Federal Housing Administration but the FHA does not lend money, instead they simply insure your debt with an approved FHA lender.
Because your mortgage is insured against default by the government, FHA loans offer significantly less risk for lenders, allowing homeowners, even those with poor credit, to qualify for lower mortgage rates and stop foreclosures. The FHA will accept homeowners with blemished credit... especially if you are working on improving your credit score and can document your current situation.
Therefore, it may be possible to qualify even though you may have a low credit score, perhaps 500 (or less) so if you are a homeowner with tarnished credit and are concerned that the current "mortgage crisis" will prevent you from refinancing before your lender begins adjusting your interest rate and payment amount, FHA backed mortgage refinancing could be your answer to stop foreclosures.
Apparently, the FHA's focus will remain on looking to the good credit profile of applicants rather than a credit score, and, until now, the FHA has not permitted delinquent borrowers to qualify for their program.
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