| With the recent popularity of Adjustable Rate | | | | mortgage to help bridge the gap between what is |
| Mortgages and Interest Only mortgages followed by a | | | | owed and your home's value. |
| rise in rates we have seen epidemic amounts of | | | | Interest-only mortgages are also eligible for the |
| foreclosures as home owners try to cope with higher | | | | FHASecure program. If you are current on your |
| payments. Many homeowners are delinquent on their | | | | mortgage, you are eligible for an FHASecure refinance; |
| mortgage and fear that because of the damage to | | | | and if you are delinquent, the default must have been |
| their credit scores they will not be able to refinance. A | | | | due to the payment shock of an interest rate reset or, |
| new FHA program may be the answer to their | | | | in the case of an Option ARM, the "recasting" of the |
| problems. | | | | mortgage to fully amortizing. |
| The Federal Housing Administration (FHA) provides | | | | If your current mortgage has a prepayment penalty |
| mortgage insurance on loans made by FHA-approved | | | | you will need to take a look at the equity you have in |
| lenders throughout the United States and its territories. | | | | your home. If you do not have sufficient equity in your |
| FHA insures mortgages on single family, multifamily, | | | | home that would allow you to include the prepayment |
| manufactured homes and healthcare facilities. | | | | penalty and/or other refinancing costs into your new |
| FHA-insured mortgages do not come with | | | | FHA mortgage, then you should ask your lender to |
| prepayment penalties, have no teaser rates nor | | | | consider a second mortgage to pay the difference or |
| balloon payments. They are offered at market rate | | | | negotiate a short payoff on your existing loan. Offering |
| with terms up to 30 years and are fully amortized, | | | | either of these options is at the discretion of the lender. |
| meaning that you pay towards principal and interest | | | | Facing Foreclosure? |
| every month. | | | | It is possible that FHASecure may help homeowners |
| How can FHA help homeowners keep from losing | | | | already in foreclosure but each situation is unique and |
| their homes? | | | | depends upon the value of your home and how much |
| FHASecure gives homeowners with non-FHA | | | | you owe, and if the lender is willing to offer a second |
| adjustable rate mortgages (ARMs), whether current or | | | | mortgage. Homeowners facing foreclosure are |
| delinquent and regardless of reset status, the ability to | | | | strongly encouraged to talk with their lenders, possibly |
| refinance into an FHA-insured mortgage. With the new | | | | with the assistance of a HUD-approved housing |
| FHASecure program, the lender will not automatically | | | | counseling agency, to determine the best course of |
| disqualify you because you are delinquent on your loan, | | | | action. To find a HUD-approved housing counselor, |
| and the lender may offer you a second mortgage to | | | | please call 1-800-569-4287 or search online at |
| make up the difference between the value of your | | | | FHA does have maximum loan limits that are vary by |
| property and what you owe. | | | | location. FHA's geographical loan limits and how much it |
| This program is available whether your current or | | | | can insure are established by law. Although the |
| delinquent on your mortgage payments. In fact, FHA | | | | FHA-insured mortgage cannot exceed those loan |
| encourages homeowners facing reset to refinance | | | | limits, when a lender is willing to combine a first and |
| before they fall behind. But even if you do fall behind, | | | | second mortgage, the amount of the second could |
| you may be eligible. There isn't a limit on how far | | | | exceed the maximum loan limit for your area. |
| behind you can be on your mortgage or how many | | | | If the value of your home is now less than what you |
| payments you've missed. Whether you're current, one | | | | still owe the mortgage lender considering the refinance |
| month behind or multiple payments behind, the amount | | | | would have to be willing to accept a short payoff on |
| you can refinance will depend on the value of your | | | | the existing loan OR to hold a second mortgage to |
| property and how much you owe and if the lender, or | | | | make up the difference needed to pay off the existing |
| another eligible source, is willing to take back a second | | | | mortgage and the home's value. |