FHA Mortgage Guide

For big points, which of the following statements from Washington are true:

A. “I am not a crook.” Richard Nixon

B. “I did not have sex with that woman.” Bill Clinton.

C. “U.S. Housing and Urban Development Deputy Secretary Roy A. Bernardi today announced the Bush Administration’s FHASecure product has helped 200,000 homeowners refinance their mortgages and avoid foreclosure.” HUD

D. All of the above.

E. None of the above.

Linguistically, item C has two meanings. In one sense it says that of 200,000 total homeowners, some refinanced their homes AND some others avoided foreclosure. But the way it is obviously intended to be read is that 200,000 homeowners got new FHA mortgages and — because of those loans — 200,000 homeowners avoided foreclosure.

The real question is this: Can anyone at HUD write a simple sentence? One which is not a quagmire of parsed sentences and hidden meanings?

Here’s the truth. Press here for HUD’s official report. Look at page four. There you can see the total number of delinquent loans which have been refinanced since October 1, 2007.

The magic number is 1,987.

That’s it. About 2,000 homeowners with delinquent loans have been able to refinance with FHA mortgages. Since last October.

HUD could have written a news release which said “U.S. Housing and Urban Development Deputy Secretary Roy A. Bernardi today announced that in fiscal 2008 the Bush Administration’s FHASecure program helped 200,000 homeowners refinance their mortgages, including 2,000 delinquent borrowers who faced foreclosure.”

That would be fair. That would present HUD’s efforts in context. That would show the scale of the government’s efforts to help homeowners nationwide who are trying to ward off foreclosure.

With accurate information fairly presented it would be possible to say if HUD’s efforts are helping ease the national foreclosure blight. Or not.

Make up your own mind. But as you do, consider the news release from RealtyTrac.com which came out last week:

IRVINE, Calif. — May 14, 2008 — RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, today released its April 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 243,353 properties, a 4 percent increase from the previous month and a nearly 65 percent increase from April 2007. The report also shows one in every 519 U.S. households received a foreclosure filing during the month.

Below is the HUD release:

BUSH ADMINISTRATION’S FHASECURE REFINANCES 200,000TH MORTGAGE FOR AMERICAN FAMILIES

WASHINGTON - U.S. Housing and Urban Development Deputy Secretary Roy A. Bernardi today announced the Bush Administration’s FHASecure product has helped 200,000 homeowners refinance their mortgages and avoid foreclosure. Since September 2007, FHASecure has enabled struggling families - who are current or past due on their mortgages - to refinance through HUD’s Federal Housing Administration (FHA).

“Over the past several months, FHA has been working to help families who want permanent relief from their high cost subprime mortgages,” said Bernardi. “We are proud to have helped these struggling homeowners keep their homes.”

“The Bush Administration’s FHASecure product has quickly proven to be a responsible solution for 200,000 American families who are in the right house, but the wrong mortgage,” said FHA Commissioner Brian D. Montgomery. “These homeowners have found affordable relief from their exotic loans, and FHA is on pace to help a total of half million families keep their homes by year’s end.”

In the past three months, FHASecure has insured twice as many loans as the program did in the program’s first six months. From September 2007 to February 2008, FHA insured 100,000 refinanced mortgages. As more homeowners continued to learn about the benefits of FHA’s traditional 30-year fixed, prime-rate financing, FHA backed another 100,000 loans in half the time.
Timeline: Bush Administration Responsibly Helping Families Stay In Their Homes

___In August 2007, President Bush launched a new initiative at HUD’s Federal Housing Administration (FHA) called FHASecure to help hundreds of thousands of struggling homeowners - especially low-income families and minorities - avoid foreclosure. This product expanded FHA’s ability to offer refinancing to homeowners who have good credit histories but cannot afford their mortgage payments after their teaser rates reset.

___In February 2008, President Bush requested $65 million for housing counseling in his Fiscal Year 2009 budget request. The Administration has increased funding for HUD’s 2,300 approved housing counseling agencies by 150 percent since 2001. Fifty million dollars was approved for counselors in Fiscal Year 2008. Another $180 million went to the non-profit NeighborWorks this year to help them prevent foreclosures.

___In March 2008, as part of the bipartisan economic growth package, FHA temporarily increased its loan limits until the end of this year, enabling hundreds of thousands of more families to purchase or refinance their homes at an affordable price. The new temporary limits will range from $271,050 to $729,750.

___In March 2008, the Bush Administration proposed reforms to the Real Estate Settlement Procedures Act (RESPA) to help American homeowners better understand their mortgages and to allow them to shop for the best loan offer. Under this proposal, home buyers would be presented for the first-time ever with a standard form disclosing the important aspects of a loan. This new disclosure would ensure that home buyers are provided, early in the home buying process, complete, accurate and understandable information about their mortgages.

___In April 2008, the Bush Administration announced an expansion of FHASecure, which will start in July, to help homeowners with adjustable rate subprime mortgages who can no longer afford their mortgages and missed up to three monthly mortgage payments over the past 12 months. Rather than go into foreclosure, eligible borrowers can refinance with FHA and lenders can voluntarily write down the outstanding subprime mortgage principal balances.

___Starting in July 2008, FHA will expand FHASecure using a fair, flexible premium structure. This change, the first in FHA’s 74-year history, will better protect FHA’s solvency and ensure taxpayers do not assume the cost of this expansion by charging borrowers mortgage insurance premiums based on their credit risk.

Check out these FHA resources for more information

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