FHA Mortgage Guide

With the presidential elections now a week behind us, the public has held high expectations for president-elect Barack Obama. And given the current economy, it’s fair to assume that he has quite a tall order ahead of him. Today, Obama visited the White House and also met with President Bush to begin the highly anticipated transition of leadership. 

With a new presidency in line, I wanted to point out a few mortgage and FHA related items that we might all expect to see in the near future. First of all, with the most recent CNN polls showing a 76 percent disapproval rating of President Bush, it may seem hard for president-elect Obama to disappoint. But, let’s not forget the severity of the current economy we face, with the housing sector as no exception. With that in mind, here are a few key issues that have been recently addressed by Obama: 

90 Day Moratorium on Foreclosures
One of the key issues discussed during Obama’s campaign trail was the proposal of a 90 day moratorium on foreclosures. The intent of this 90 day delay is to give troubled homeowners a chance to find more affordable mortgages and give more time for lender negotiations.  The response to the 90 day moratorium has drawn its share of opposition, with many hinting that it will do little for this economy and simply give these troubled homeowners a chance to live rent-free for 90 days. Obama isn’t the first to suggest such a proposal, as California’s Gov. Schwarzenegger has already proposed an identical moratorium with a 90 day delay as well. 

Within this proposal is also the power for bankruptcy court judges to modify mortgages on primary residences, a $10 billion fund to prevent foreclosures, and a possible mortgage tax credit worth up $800 for select homeowners.

Refinance Existing Mortgages Through FHA and Fannie & Freddie
Although the Hope For Homeowners program has been off to a sluggish start, Obama points out that making mortgage modifications will be necessary to stimulate this economy. Last Friday, Obama stated “it’s absolutely critical that the Treasury work closely with the FDIC, HUD and other government agencies to use the substantial authority they already have to help families avoid foreclosure and stay in their homes.” Organizations have reported that the Treasury Department may already be considering a new plan for homeowners which would involve the FDIC using $50 billion from the $700 billion bailout bill to modify existing mortgages. 

With the initial numbers from the Hope For Homeowners program barely reaching 50 applications in its first two weeks, the FHA now estimates only 13,300 homeowners will be helped during the first year.  In response, all avenues are now being considered. Ranging from higher FHA debt to income ratios, cutting FHA premiums by up to 75 basis points, or lender equity sharing plans, all are now possible considerations to help fill this void in the credit markets. 

A New Presidency and Many Changes
The next year brings many changes our ways- some which are highly anticipated and some which people have people anxiously standing by to hear. We’ve already caught a glimpse of next years 2009 FHA Loan Limits, as well as the increase in down payment requirements to 3.5%. As of right now though, it seems modifying existing mortgages will be the key focus for both the FHA and president-elect Obama in the near future.

Check out these FHA resources for more information

This entry was posted on Monday, November 10th, 2008 at 3:29 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.