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Just 266 FHASecure Loans To Date

by Peter G. Miller
December 18th, 2007

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 program was supposed to be the innovative government program that was going to save tens of thousands of homeowners with toxic loans. What made the program attractive is that FHA said it was willing to look past late and missed payments related to exploding ARMs.

It can’t possibly be that borrowers don’t know about the program –FHASecure is a major component of the Bush Administration mortgage relief effort.

In August, the White House announced that “the President has asked Secretary Jackson to pursue important administrative changes to give FHA the flexibility to help more families stay in their homes during this time of transition in the mortgage market. The FHASecure program will help people who have good credit but who have not made all of their payments on time because of rising mortgage payments. For the first time, FHA will be able to offer many of these homeowners an option to refinance their existing mortgage so they can make their payments and keep their homes. FHA will also charge mortgage insurance premiums based on the individual risk of each loan, using traditional underwriting standards, so it can expand access and help even more families.”

If the FHASecure program is to have any value then it must be immediately available to large numbers of homeowners with toxic loans. A few hundred new loans at a time when there are thousands of new foreclosure actions every week is just about worthless.

For the complete Rucker article, see: U.S. government subprime effort off its pace, December 17, 2007

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2 Responses to “Just 266 FHASecure Loans To Date”

  1. ANTHONY ROMANO Says:

    FHA and the Bush plan is way off. FHAsecure will not succeed because most of the sub-prime borrowers were created during the boom for the fat profit mongers of the lending industry. The lenders were like a drug cartel, who now say well we did not force them to buy the heroin, but boy were they willing to be the suppliers.

  2. Dan Stephens Says:

    FHA Secure cannot help very many because:
    (1) most are uside down, and of those who are not, (2) many don’t have enough equity or cash to pay closing costs (if they do,why are they missing payments?), and (3) many don’t have debt ratios to qualify, since (3a) many were liar loans to begin with, or (3b) they’ve racked up too much new debt to pay spiralling property tax, energy, health insurance and food costs, or (3c) incomes have fallen or (3d) they qualified for the subprime loan at 45-50% debt ratios and don’t meet the 43/45% FHA total debt ratio.

    The only way to stop the continuing avalanche of foreclosures is to have a Congressionally-mandated foreclosure moratorium and change the terms of the existing subprime ARMs by fiat. If that isn’t done, the problem is going to get worse by orders of magnitude in late 2008 and 2009 when four times as many prime credit ARMs start to adjust than there were subprime ARMs, and the prime borrowers won’t be able to refinance either, especially since lending guidelines for conventional loans are now incredibly stiffer than they were. A moratorium and mortgage adjustment will instantly stop the process and restore value to mortgage securities so lenders can start lending again.

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