Boulder Realtor Says: Miss a Mortgage Pmt? Get FHA Loan!

Nora Ziel from, Cherry Creek Mortgage Boulder , informed this Boulder Realtor today that the FHA has a new loan product to help rescue homeowners facing potential foreclosure.

The U.S. Department of Housing and Urban Development (HUD) website posted a news release at the end of August which describes a new loan product called FHASecure. The FHASecure plan will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing.

Here’s the full run-down from the HUD site on how to qualify:

1. A history of on-time mortgage payments before the borrower’s teaser rates expired and loans reset;
2. Interest rates must have or will reset between June 2005 and December 2008;
3. Three percent cash or equity in the home;
4. A sustained history of employment; and
5. Sufficient income to make the mortgage payment.

There’s a catch; eligible homeowners will be required to meet strict underwriting guidelines and pay a mortgage insurance premium, which offsets the risk to FHA’s insurance fund at no cost to the taxpayer. As well, you must have missed a payment to qualify.

Ziel doesn’t recommend intentionally missing payments, and in fact, suggested that there are other FHA and conventional loan products available if you meet certain guidelines. So, if you have an ARM (Adjustable Rate Mortgage) loan that is going to adjust to a higher rate, you don’t necessarily need to meet the guildlines for the FHASecure and you need not necessarily despair.

While the Bush Administration is firming up plans to freeze sub prime ARMs (that’s loans not weapons), there are guidelines for the freeze that some people might not be able to meet.

The combination of FHASecure and risk-based premium pricing will permit FHA to return to the role it was originally designed to play, bringing stability to the real estate market by helping break today’s cycle of foreclosures and price depreciation and creating much needed liquidity in the now-constricted mortgage market.


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