Filed under FHA Articles, FHA Mortgage Articles, FHA Mortgagee Letters, FHA news, FHA refinance, Mortgage Reform, Mortgage Rescue Articles, Published Articles · Tagged: FHA mortgage relief, FHA refinance guidelines, mortgage relief companies
FHA borrowers have refinance options that enable struggling homeowners to avoid going the loan modification route. There is nothing wrong with getting a loan modification, but you can expect the process can take 6-12 months and you risk you losing your home in the process. Just last week, the New York the state attorney general, Andrew Cuomo, has sent cease and desist letters to more than 200 loan modification companies. The FHA loan Pros published an article that discussed how FHA customers could get relief without getting tangled up with mortgage relief companies. They pointed out that laws for mortgage relief companies vary by state but Cuomo reached out to homeowners with FHA mortgage relief insured by HUD.
The NY attorney general’s office said “Mortgage relief companies target homeowners facing foreclosure by promising to restructure their home loans with an affordable loan modification. Cuomo accused these mortgage relief companies of operating in deceptive practices that lure distressed homeowners to pay them for mortgage relief services, yet they often fall short to modify the mortgage.
The FHA Mortgage Solution
First of all FHA has been helping struggling homeowners since 1934. With their flexible FHA guidelines, HUD has been a leader in the foreclosure prevention arena. FHA has solidified a good reputation for rectifying FHA loans in default. In 2009 the FHA annual report says that “82.7% of the FHA mortgage loans that were 90 days or more delinquent were brought under control.”
To get FHA mortgage relief, you need to contact a HUD foreclosure avoidance counselor at http://www.hud.gov/offices/hsg/sfh/hcc/fc/. There is no fee for their mortgage relief services so you have nothing to lose. FHA refinance guidelines remain more flexible than conventional loan programs. For borrowers who don’t have much home equity, they may still qualify for a rate and term FHA refinance at 96.5%.
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FHA Home Loan Refinancing posted an intriguing article today that shed some light on the challenges that HUD is facing with their FHA loan program that is insured by the US government. Let’s face it the housing market and mortgage industry has been in shambles nationwide over the last three or four years. Blaming FHA is not fair and certainly will not solve the problem. FHA mortgage lending has taken risks, but they have adapted to the lending obstacles and made changes that should mitigate the risks without compromising the FHA loan benefits for American consumers. First time homebuyers and existing homeowners both benefit from FHA home loans.
5 Concerns Noted by the FHA Home Loan Refinancing Company
1. FHA loan defaults have risen dramatically over the last 48 months.
2. FHA mortgage reserves have dropped to dangerously low levels.
3. FHA loan guidelines have tightened significantly and most FHA lenders require a 640 credit score to refinance.
4. The FHA requirements for FHA streamline programs programs thus fewer borrowers qualify.
5. The change in the appraisal policy for FHA refinance loans has slowed the process and increased the closing costs for borrowers.
Read the original article online, http://www.fhahomeloanrefinancing.com/blog/2010/03/18/are-low-rate-fha-refinance-loans-getting-better/.
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Expect to see increases in mortgage insurance for FHA mortgage loans typically have a low down payment requirement of only 3.5%, so borrowers must pay for mortgage insurance to offset that risk. Unlike private mortgage insurance, FHA borrowers are able to finance the mortgage insurance, thereby spreading its cost over the loan term.
The first change that will immediately impact borrowers is the FHA’s increase of the required up-front mortgage insurance premium to 2.25% of the base loan amount. This would add an additional $1,447 to a $300,000 mortgage. New Borrowers will see a minimum FICO credit score and 10 % down payment requirements. New borrowers will now be required to have a minimum FICO credit score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with a credit score below 580, while still able to qualify for a FHA loan, must now put down at least 10% of the purchase price–an amount that may be prohibitive for many borrowers with poor credit.
The FHA is making an effort to lower its overall risk and improve the financial soundness of its insured loans, which in turn allows for the continued support of home buying in the United States. In doing so the FHA must find a way to keep their insurance fund’s capital ratio returns above the Congressionally mandated 2%, while continuing on their overall mission of aiding borrowers in underserved communities and facilitating the recovery of the housing market. These changes, along with the other FHA reforms will have varying effects on borrowers interested in a FHA home loan. For borrowers with low credit scores, some of these changes, such as the higher down payment percentage, will significantly affect their ability to buy a home. In the short term, the changes may motivate borrowers to lock into the old FHA guidelines before the new changes become effective.
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FHA mortgage refinancing has risen as a preferred FHA lending option for borrowers with good and bad credit. In the last few years, FHA refinance loans have become a popular option because the FHA rates are low and the credit guidelines are more forgiving than conforming lending guidelines.
Talk to a licensed FHA professional about your qualifications and see if FHA is a good fit for refinancing your mortgage. Read the entire FHA refinance article online. In the last 3 years, FHA refinance loans have increased their market-share for home loans nationwide.