FHA Mortgage Guide

As we have reported, HUD has disclosed that only 87 delinquent conventional loans were refinanced in the first two weeks of November, nowhere near the numbers anyone would expect given claims that more than 33,000 FHASecure loans have been issued.

Pat Purcell offers the following comment regarding our challenge for HUD to prove its FHASecure numbers.

“Perhaps if the correct information would get out to the public, more people in trouble could be helped…your conventional loan does NOT have to be delinquent to refinance into an FHA Secure loan..and it would be in the best interests of everyone if the media would stop reporting that the loan must be delinquent…FHA is probably correct in it’s numbers because FHA knows the correct information and so does the section of the public that goes onto it’s website and uses lenders who know what they are doing…if someone wants help, contact me at the above e-mail address and I will direct them to a Phoenix, AZ lender who DOES know what they are doing…thank you…”

Allow me to disagree.

The whole purpose of the FHASecure program is NOT to refinance those with good credit. The FHA program is already available for such borrowers. Instead, the sole and only purpose of the FHASecure program is to help those facing foreclosure.

Who says so?

How about HUD? It plainly says that “more than 33,000 borrowers have already refinanced their subprime home loans with FHASecure, a government-insured foreclosure avoidance initiative.”

Not a refinancing program, but a “government-insured foreclosure avoidance initiative” and NOTHING ELSE.

The figures are in for the first 15 days of December and — with one astonishing exception — the FHA program continues to do remarkably well.
At current rates, as many as 1.8 million borrowers could apply for FHA loans in the coming year — a 39-percent increase over fiscal 2007. While the conventional market flounders, […] read more

As mentioned several days ago, the Mortgage Cancellation Relief Act of 2007 extends the mortgage insurance write-off — including the insurance paid by FHA borrowers — until 2010.
Jeff Lubar with the Mortgage Insurance Companies of America — MICA — offers additional information:
Qualified borrowers will be able to take the deduction if their insured mortgage originates […] read more

President Bush, HUD Secretary Jackson and Secretary of the Treasury Paulson all provided big estimates to support the FHASecure program and all are now presumably embarrassed by the realities of the HUD effort. If they are embarrassed — if they have any sense of compassion for the people nationwide who are losing their homes — they […] read more

You remember FHASecure. It was the presidentially-designated savior of the soon-to-be-foreclosed, Earlier this month — and with great fanfare – HUD said the FHASecure program had already saved 33,000 troubled homeowners.
“In response to the Bush Administration’s plan to help families avoid foreclosure, tens of thousands of homeowners are refinancing their exotic subprime loans with HUD’s new […] read more

What does the Senate version of FHA modernization actually say? Below is a summary from Sen. Christopher Dodd’s office.
Note that the Senate measure S. 2338 and the House bill (H.R. 3915) are not alike. There are significant differences regarding risk-based insurance premiums, downpayment requirements (1.5 percent versus as little as nothing down) and maximum loan […] read more

Patrick Rucker, an excellent Washington correspondent with Reuters, reports that 266 FHASecure loans have been originated to date. That is not a typo.
“Between September and mid-December,” says Rucker, “only 266 such borrowers have cleared all FHA hurdles, according to data compiled by the Department of Housing and Urban Development that was provided to Reuters.”
The FHASecure […] read more

The Senate has passed the Mortgage Cancellation Relief Act of 2007, a measure which would end the income tax borrowers face when lenders forgive up to $2 million in outstanding mortgage debt.
Sponsored by Sen. Debbie Stabenow (D-MI), the measure would also extend the deductibility of mortgage insurance for three more years. The current legislation making mortgage insurance deductible applies only to loans […] read more

While the Senate passed FHA modernization by an overwhelming majority, 93-1, it did not pass the same bill that was approved by the House.
The distinctions between the two bills are important and it would be unwise to suggest that FHA modernization will sail through a conference committee. As Rep. Barney Frank (D-MA), chairman of the […] read more

The Senate today passed the FHA modernization bill, S.2338. The vote was 93-1.
The major points:
The maximum loan amount in the lower 48 states will be increased from to $362,790 to $417,000. This is the conventional loan limit. Previously the largest FHA loan for a single-family property was limited to 87 percent of the conventional loan […] read more

The FHA program continues to roar along while much of the rest of the mortgage market is stuck in park.
The latest numbers from HUD show that in the first 15 days of November applications are coming in at an annualized rate of 1.4 million. That’s twice the 680,000 applications actually received in fiscal 2007, the […] read more

The House Judiciary Committee has passed H.R. 3609, the Emergency Home Ownership and Mortgage Equity Protection Act of 2007. The committee passed the bill, which was introduced by Rep. Bradley Miller (D-NC), by a vote of 17-15.
This is a measure which, oh my gosh, would restore the authority of courts to modify home mortgages in […] read more

Thinking of buying a home now, in the midst of the mortgage meltdown?
In a lot of markets this may not be a bad time to buy — surely it’s a lot better than 12 or 18 months ago when sellers were getting multiple offers and purchasers were getting, well, not much. But now in many […] read more

There’s a great irony in the Bush foreclosure rescue plan — it does not apply to FHA loans.
Help under the Bush initiative is limited to selected subprime loans that mortgage investors elect to modify. Missing from this useless brew is any effort to help FHA borrowers.
In reality, this is not a terrible oversight. Instead it’s […] read more

Anyone notice something curious about the chart below? It comes from the latest foreclosure and delinquency study produced by the Mortgage Bankers Association and it shows that foreclosed government loans — FHA and VA financing — have little impact on national foreclosure levels.
How come? For the most obvious reasons.
You can’t get an FHA or VA […] read more

The President’s foreclosure relief program is out. It won’t do much of anything that could not have been done last week without the President’s foreclosure relief program.
Essentially the program is a voluntary effort that the better lenders, servicers and investors will easily adopt. As to the rest of the lender community, they’re the very folks […] read more

It seems so seductive, the idea that huge numbers of borrowers could be saved from foreclosure by merely keeping interest rates at original teaser levels. That’s the plan put forward by Sheila Bair, chairman of the Federal Deposit Insurance Corporation.
Bair says forget about modifying loans on a case-by-case basis. Instead, let’s have a blanket freeze […] read more

The Los Angeles Times asks “who owns your home” and then comes up with this answer:
“Most people in the U.S. buy houses using mortgage loans from banks and other lending institutions. In theory, the firm that issues your mortgage owns your property until you pay off the loan. In practice, however, that’s not how the […] read more

My father was a CPA until almost age 90 and he was an unusually bright guy. He did complex accounting work and, most remarkably, he could accurately add columns of figures in his head, often tens of millions of dollars.
Now members of his chosen profession have chimed in with some ideas regarding the current mortgage […] read more

HUD has just announced that the FHASsecure program has already been used by 33,000 homeowners to prevent foreclosure.
While there are any number of issues one can have with HUD, the FHASecure program is a real winner that’s been intelligently designed to help borrowers with toxic loans. It won’t help everyone facing foreclosure or financial distress, […] read more