FHA Secure Plan - What does this mean?

President Bush has come up with a plan that has passed through the house that intends to help provide some outlet to homeowners in specific struggling situations. The specific people that this will affect are the homeowners who are in a mortgage that has an adjustable rate, that has most likely adjusted or will adjust higher than they can afford.

This unfortunately has become a grim realty in the world of home financing. You see the news of all the all foreclosures, you see the subprime lenders going out of business, and you see the big "players" struggling and shifting their tactics. Homeowners were suggested into these types of loans, often times stretching their budget at the time beyond necessity. Unfortunately, many of these homebuyers were put into "subprime" mortgages which are usually 2-3 year ARM's, with an adjustment after that period that could significantly increase their payment. Credit standards became looser and looser, people that bought homes, most likely should not have. Right now, you are seeing the affects of this snow ball as it crashes through the housing market.

The FHA Secure Plan is intended to relieve some of these homeowners that have had trouble keeping up with their adjusted payment. The intitial look at this program tells me that the homeowner should have a clean mortgage and recurring debt history at least 6 months prior to the reset. If they are delinquent only after the reset, they would be a prime candidate for this program. Normally, you are to have at the most a 97.75% loan to value to refinance into an FHA mortgage, but it looks as though there will be added stipulations to this program to basically allow the current mortgagee to write off some of the mortgage owed to them if there is not sufficient equity in the home. In addition, FHA will adjust their risk based pricing premium in regards to mortgage insurance. This used be a standard premium, but beginning January 1, 2008, this will adjusted according to the borrower's risk profile. It also seems that this program will be applicable to borrowers whose adjustments are to occur in between June 2005 and December 2009.

Feel free to send an email if you want any further information.

Thanks,
Dan

Long time reader, first time blogger...

Hello to all,

I am posting this first blog as a simple introduction of myself. I am a mortgage lender based in the Denver, CO area. I have been a mortgage lender for 5+ years now and I am trying for the first time to expand my listeners and pass some of the knowledge I have on to either clients or other mortgage specialists out there.

I do not claim to be the end all be all in the mortgage world, but I am fairly knowledgable in multiple facets of the mortgage arena. I think there are many people out there that need some of the information that I plan to pass on in through these means, so I hope all my words find you well.

I will be periodically touching on many things that will essentially be involved in "The Mortgage World," such as first time homebuying, changes in the market, and other news or education worthy items.

So....with that being said....I will start my first blog....