San Diego real estate blog - Peter Toner

The Bush camp announced more news of government assistance to homeowners struggling with their mortgage payments. HUD’s Federal Housing Administration (FHA) and its new product FHASecure is the government’s latest attempt to relieve some of the pain being felt by those homeowners that have had their mortgage rates adjust from their original teaser rates. The word from the Federal Housing Commissioner-Assistant Secretary for Housing Brian D. Montgomery is that the government “wants to be able to help families who are in the right house, but the wrong mortgage.”

The hope is that FHASecure will slow down the foreclosure rate and in doing so help to “save” the market from depreciating as quickly as it has been in some areas of the country. How FHASecure is different from previous FHA attempts is that it will now be opening eligibility up to homeowners who haven’t been making proper payments on their mortgages. The FHASecure plan will assist homeowners who have had two consecutive late payments or two different late payments in the last twelve months and have up to a 97% loan-to-value or three consecutive late payments or three different late payments in a twelve month period and have up to a 90% loan-to-value.

The government is estimating that these new eligibility guidelines will allow approximately 500,000 families to refinance into more viable loan options rather than choosing foreclosure.