FHA VA Blog

Over the last week or so Ray and I have spoken to many homeowners responding to an informational item we ran in the Denver Post and Rocky Mountain News.

These people are homeowners in desperate situations with their mortgages and feeling hopeless and frustrated with many of the people they have spoken with regarding their loans.  The stories are similar; 1-They receive refi opportunity in the mail that promises to help them - they call, give personal information, allow credit to be pulled - never get a return call and can't get the person they spoke with back on the phone. 2-They start a refinance and keep waiting for it to close, there are numerous delays (as much as 8 months by one gentleman) and are finally told it 'can't be done'. 3- They contact their lender/servicer on their current mortgage to try and work out a program and are told several discouraging things. 4-They call and speak with multiple loan officer/originator/brokers and are told there is no opportunity for them to refinance because of - bad credit, credit score, late payments, income, home values... the list goes on.

We have been able to help most of those who have called - people who have pretty much given up on the industry and have little faith or trust in anyone speaking mortgages. 

I just want to tell those people - don't give up - you would be amazed at what some of these new, government programs can do to assist you.  Speak with at least one loan officer/originator/broker who has extensive experience with manually underwritten FHA loans, can currently close FHA Secure loans, understand short-pays/new seconds/subordination and ask detailed questions - there really are so many options and ways to do these loans - don't give up until you've really had the chance to talk with a knowledgeable person. 

Yes, these loans are tough, they require letters of explanation and documentation - but it's much better than foreclosure.  And I must say that everyone I have explained things to has been happy to work with me gathering the items needed - they just didn't know they had options.

Don't give up!  There are people in this industry who will help you!

Theresa & Ray

Throughout the United States an estimated 1 million to 3 million adjustable rate mortgages are expected to be reset within the next year. Roughly 500,000 of those are projected to enter foreclosure proceedings (according to HUD spokeswoman Kristine Foye). Across the nation FHA secure is expected to help refinance 80,000 to 240,000 mortgages at lower rates -- giving stretched homeowners some breathing room.

I really want to emphasize; if you are not sure you can qualify for this program, or what it would do to your payment - call and ask.

Call and talk to us or any other lender experienced in working with FHA loans - it's worth the call, it's free, there's no obligation - it may help you out more than you thought possible.  Mortgage terminology can be confusing and misleading to those not experienced with the industry, instead of trying to figure it out - call or e-mail.

Here is a more detailed release...

HUD No. 07-141

HUD SECRETARY URGES SWIFT PASSAGE OF FHA REFORM IN SENATE

WASHINGTON - U.S. Housing and Urban Development Secretary Alphonso Jackson today said legislation overwhelmingly approved by a Senate panel this morning to modernize HUD's Federal Housing Administration (FHA) will go a long way toward achieving the Administration's goal of better serving low- and moderate-income, minority and first-time homebuyers.

Yesterday, the U.S. House of Representatives widely approved H.R. 1852, The Expanding American Homeownership Act of 2007, which Jackson said would "serve as a starting point to bring good news to families who need a safe, fair and affordable FHA alternative to the exotic subprime market."

In a follow-up letter to the Chairman and Ranking Member of the Senate Banking Committee today, Jackson said the FHA modernization legislation that was marked up by this Committee today includes several "beneficial provisions" including reasonably adjusting FHA's loan limits, eliminating the cap on the number of reverse mortgages FHA can insure, and simplifying the downpayment requirement.

"The primary mission of FHA is to reach borrowers who either are not being served or are being underserved, and to help them achieve the American Dream of homeownership. Like the Administration's proposal, the bipartisan Dodd-Martinez bill would more effectively reach these borrowers by reasonably adjusting the loan limits for the single family mortgage insurance program to account for high-cost housing markets and increased construction costs," Jackson said in his letter to Senators Dodd and Richard Shelby.

Below is the full text of Secretary Jackson's letter to Senators Dodd and Shelby:

September 19, 2007

The Honorable Christopher Dodd
Chairman
Committee on Banking, Housing, & Urban Affairs
United States Senate
Washington, D.C. 20510

The Honorable Richard Shelby
Ranking Member
Committee on Banking, Housing, & Urban Affairs
United States Senate
Washington, D.C. 20510

Dear Chairman Dodd and Senator Shelby:

I am pleased to offer my enthusiastic support for legislation to modernize the Federal Housing Administration (FHA). One of our key objectives at the Department of Housing and Urban Development is to update the FHA mortgage insurance program to better serve low- and moderate-income and first-time homebuyers. The comprehensive legislation that Chairman Christopher Dodd and Senator Mel Martinez have drafted would bring us a long way toward achieving that goal. I urge the Committee on Banking, Housing, and Urban Affairs to approve FHA Modernization so that the full Senate can vote on it.

The primary mission of FHA is to reach borrowers who either are not being served or are being underserved, and to help them achieve the American Dream of homeownership. Like the Administration's proposal, the bipartisan Dodd-Martinez bill would more effectively reach these borrowers by reasonably adjusting the loan limits for the single family mortgage insurance program to account for high-cost housing markets and increased construction costs. The bill also provides FHA with more flexibility on upfront premiums. Such flexibility, combined with solid reporting requirements, is necessary to allow FHA to design mortgage products that reward borrowers with good credit histories and protect taxpayers with actuarially sound pricing. It is for these reasons that the Administration proposed new flexibility for both upfront and annual premiums and we urge the Committee to adopt this proposal.

The bill includes several other beneficial provisions: eliminating the arbitrary cap on the number of reverse mortgages FHA can insure, which could help hundreds of thousands more seniors stay in their homes; simplifying FHA's down payment requirements; and expanding sources of private lending for manufactured home purchases.

On August 31, 2007, President Bush renewed his call for Congress to enact FHA Modernization. If Congress approves legislation to modernize FHA, as the President and I have called for, I estimate that we could help another 200,000 families avoid problems with their mortgages and instead help them get into a safe, fair, and affordable FHA-backed loan.

While we may raise additional concerns as the FHA bill moves through the legislative process, I am grateful for the priority that the Senate Baking Committee has placed on modernizing FHA. I therefore urge swift passage of the Dodd-Martinez bill so that more families can realize and maintain the American Dream of homeownership.

The Office of Management and Budget advises that from the standpoint of the Administration's program that there is no objection to the transmittal of this letter.

Sincerely,

Alphonso Jackson

There has been talk of making changes, some say much needed changes, to the FHA loan program.  Some of the items on the agenda are to eliminate the required downpayment (currently less than 3%), increase the loan limit, and make adjustments to the UPMIP based on risk factors.  This passed the House and now goes before the Senate.  We are all hoping for a quick and favorable outcome.

Below is the latest statement from HUD.

HUD No. 07-139
September 18, 2007

STATEMENT FROM HUD SECRETARY ALPHONSO JACKSON ON HOUSE PASSAGE OF FHA MODERNIZATION LEGISLATION

"Today's vote in the House brings us one step closer to getting a comprehensive FHA Modernization bill to the President's desk.  While more work needs to be done, I'm grateful for the strong support that the President's proposals received in the House, and I urge the Senate to take up its version as soon as possible so we can help even more Americans keep their homes.  I also appreciate the leadership and support of Barney Frank, Spencer Bachus, Maxine Waters, and Judy Biggert to reform FHA's mortgage insurance program.

The bipartisan reforms overwhelmingly passed by the House serve as a starting point to bring good news to families who need a safe, fair and affordable FHA alternative to the exotic subprime market.  Now more than ever, Americans want financially sound mortgage options that won't turn the dream of homeownership into a nightmare.  With the bill approved by the House today, we estimate FHA will be able to help hundreds of thousands of borrowers obtain an FHA-insured mortgage in 2008."  

FHA Refinance Tips

As with any business, certain expertise is something that develops over time and, more importantly, experience. This is particularly true in the field of FHA Refinancing. Finding an experienced FHA lender or broker will likely save you a lot of time and wasted expense. They are familiar with the agency's application process and qualification standards. While the FHASecure loan program is new, it will not be too different from the agency's current programs so having an FHA expert on you side is a wise thing to do.

And, only FHA approved lenders can process FHA Secure Loans -- so be sure you 're not wasting your time with unauthorized loan officers and brokers who   may just try to steer you back to the same old mortgage vehicle that got you in trouble in the first place.

Summit Mortgage Corp. is licensed to do FHA and VA loans, and our branch here in Denver is a licensed branch.  Our underwriters have more than 20 years experience underwriting FHA files, and understand manual underwriting, when facing a tough situation with your home and financing - that is priceless.

I have been originating FHA and VA loans for over 7 years and my partner Ray for 5, we are experienced and knowledgeable and really do care about helping you. 

Please contact us with any of your questions.

tsmith@summit-mortgage.com

rwilliams@summit-mortgage.com

Denver office (303) 779-0591 or (303) 779-0230.

FHASecure Loans and Credit

FHA does not required borrowers to have a minimum credit score, rather they have focused on one's overall credit history. Therefore, it may be possible to qualify even though you may have a low credit score, perhaps 500 (or less). Under the FHASecure Loan program homeowners must have made their payments on time for at least six months prior to their ARM loan's change date to a higher rate. In addition, their ARM loan's rate change date(s) must be between 2005 and 2009. To date no mention of a particular credit score has been mentioned. So if you have become delinquent on your mortgage after your interest rate adjusted then you can now qualify for this mortgage.

(Note - you do not have to be delinquent)

To qualify for FHA Secure, eligible homeowners must meet the following five criteria:

1. A history of on-time mortgage payments before the borrower's interest rates increased;
2. Interest rates must have or will reset between June 2005 and December 2009;
3. Three percent cash or equity in the home (Colorado does have a program now available to assist if you do not have the equity);
4. A sustained history of employment; and
5. Sufficient income to make the mortgage payment (you can add a non-occupying co borrower to help qualify with income).

Until now the FHA has not permitted delinquent borrowers to qualify for their loan program.

To qualify for FHASecure Loans contact us at (303) 779-0591, by e-mail or start a secure loan application on our site.  This is a new program and we are available to answer your questions.