HUD: Poor Results, No Problem — Just Redefine The Problem

by Peter G. Miller
January 16th, 2008

The good folks at HUD, in an effort to change reality, now claim that FHASecure isn’t a program to help borrowers facing foreclosure after all. It seems, says HUD, that there has been much “confusion” over the FHA mortgage program announced by President Bush on August 31st.

FHASecure Frequently Asked Questions for Housing Industry


“These FAQs have been modified to reflect that the term FHASecure applies to all conventional to FHA refinance transactions. The previous edition of FAQs indicated that only those borrowers who were delinquent due to the reset of their non-FHA ARMs were eligible for FHASecure, causing confusion in the industry.”

Exactly who has been confused?

There’s no confusion. The FHASecure program was marketed and sold to the American public as the one concrete benefit of the President’s otherwise all-volunteer foreclosure relief program, a program which requires no lender to do anything.

According to the White House, “the FHA-Secure 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.”

Plainly the FHASecure program was NOT for all conventional borrowers who were refinancing with FHA loans. There is no need for such a program for the obvious reason that the FHA has been refinancing conventional borrowers with good credit since the 1930s.

HUD put out a news release in December which said 33,000 people had refinanced with the FHASecure program. We now know that only a few hundred delinquent conventional borrowers have actually been refinanced through the FHA.

The problem here is not that the program goals have been changed, the problem is that the news release was bogus because the FHASecure plan has so far done little to help
borrowers facing foreclosure

Instead of just saying, whoops, HUD instead has made up a new goal for the FHASecure effort. No longer, apparently, is the FHASecure program for “borrowers who are otherwise creditworthy, but have recently become delinquent on their mortgages as their teaser rates reset.”

Who said that? HUD Secretary Alphonso Jackson testifying before Congress.

Meanwhile, thousands of people are losing their homes every day and home values are stalled or falling in most markets.

As I wrote in today on RealtyTimes.com, “what HUD ought to say is that ‘we can do better. It’s early in the program, it takes time to get such a massive effort underway and we’ll do more to reach families facing foreclosure.’

“Everyone understands that no single program can resolve the foreclosure meltdown and that HUD has a difficult task. Everyone wants HUD to succeed because it would be good for the country. That’s fair — and there’s no ‘confusion’ about it.”

For the complete Realty Times story, see: HUD To Public: You’re Confused

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