FHA May Come to the Rescue of Borrowers "Upside Down" in Their Mortgages!
MORE LIBERAL QUALIFICATION RULES WOULD ALLOW MANY NEGATIVE BORROWERS TO RE-FI INTO MORE AFFORDABLE LOANS!
Currently, borrowers who have been delinquent on their mortgage payments anytime within the past six months have difficulty qualifying for an FHA-backed mortgage. Under several new proposals being advanced by the Department of Housing and Urban Development (HUD), the Bush Administration, and Congressional Democrats, the rules would be liberalized to allow many distressed buyers to re-finance their loans into FHA loans with more affordable monthly payments.
The Democrats are proposing a plan to insure an additional $400 Billion of mortgages by requiring lenders to cover much of their losses. The HUD Proposal, backed by the White House, scales back lender's exposure. HUD's plan calls for certain borrower qualification requirements, and insurance to cover as much as 85% of the home's value.
At the end of 2007, the HUD Mortgage Insurance Fund, to protect against bad-mortgage losses, had a balance of $21.3 Billion. At the end of last month, the agency insured over 3.8 million loans. The total unpaid mortgage indebtedness - $364.7 billion.
Read more in today's Wall Street Journal, in an article by Damian Paletta.
In another, separate development, Illinois Governor Rod Blagojevich has proposed a new program to give homeowners behind on their mortgage payments a grace period of up to two months before their lenders can foreclose.
Under the proposed legislation, borrowers who are one month behind in their mortgage payments would be given 30 days to enter special counseling to help them make their payments current. They would have an additional 30 days to either refinance their loan, or set up a forbearance payment schedule with their lender.
See yesterday's Chicago Tribune for more details on Governor Blagojevich's proposal.
DEAN MOSS & DEAN'S TEAM CHICAGO
