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FHA Streamline

 

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FHASecure

FHA Mortgage Loan Services introduces the FHASecure loan that provides fixed rate relief for homeowners struggling with a high rate ARM. The FHASecure has expanded to assist foreclosure prevention with the growing epidemic of home loan defaults nationally.

Since the subprime meltdown, many consumers are now faced with the choice of if they are financially able to save the home or if it would be better financially to allow the home to go into foreclosure. Most homeowners attempt to avoid foreclosure due to the misconception that they will save their credit rating if their home is not foreclosed on. Sometimes, if the loan is just too far gone, there's not much that can be done and it's best to go ahead and let the foreclosure happen. At that point, the damage is already done, and it's best to cut your losses and move on in the best way you can.

  • 30 Year Mortgages with Principal and Interest Payments

  • Bad Credit is Allowed with FHASecure

  • Rate and Term Refinancing

  • No Cash Out

However, in many cases, you can save your home and avoid foreclosure. Recent legislation has been passed specifically to help stem the flow of foreclosures. They are aimed most specifically at helping those who have subprime adjustable rate loans with interest rates that have either recently reset to a much higher rate or are about to reset.

The Economic Stimulus Act of 2008 was signed by President Bush on February 13th, 2008. One of its main components is the temporary raise of loan limits, allowing people who currently hold what are considered non-conforming jumbo loans to refinance into what is now considered a conforming loan. Another main component is FHASecure, a foreclosure rescue plan that allows borrowers with subprime ARMs refinance to a fixed rate FHA loan, avoiding foreclosure. This program is due to expire on December 31, 2008, but the foreclosure epidemic still exists. So, additional legislation was passed to help continue to do damage control: the Housing and Economic Recovery Act of 2008.

Avoiding Foreclosures with FHA

The Housing and Economic Recovery Act of 2008 was signed into law on July 30, 2008. Its foreclosure rescue plan is the HOPE for Homeowners Act of 2008. Like FHASecure, HOPE for Homeowners offers a fixed-rate FHA mortgage refinance for those facing foreclosure due to predatory subprime adjustable rate mortgages.

For example, if you are a current FHA customer looking to lower your interest rates and save on your monthly mortgage payment, you could do a FHA Streamline refinance loan. These typically don't require an appraisal or any new credit underwriting requirements. They generally don't involve documentation of income, either. And, because it's only a rate-and-term refinance, the costs for this loan are low, as well. If you're not a current FHA customer, you could refinance to a FHA loan, even if your credit is somewhat damaged.

Conventional lenders are tightening their lending standards to the point where only those with high credit scores qualify. Plus, in most cases, they are requiring borrowers to at least have 20% equity in their homes in order to refinance their existing loans. FHA only requires that you have 3% equity, and for credit underwriting, their focus is mainly on the past 12 months rather than your credit scores. You only need 3.5% down to buy a home with a FHA loan and only a credit score of at least 580. You'd need a score of at least 660 under a convention loan, and only if you're putting 20% down. Your score would have to be at least 700 if you don't have a 20% down payment.