The new FHA Secure program would help home owners who have fallen behind on their home mortgage and possibly facing foreclosure. The new program would allow the delinquent home owners to refinance their Adjustable Rate Mortgages.
Adjusting variable rate mortgages have caused many homeowners to fall behind on their mortgage payments and is one of the leading causes of the record high foreclosure rate in the United States. Traditionally a home owner with a late mortgage payment would not qualify for an FHA mortgage refinance but Under the new FHA Secure proposal home owners would be eligible for an FHA refinance if they can prove the late mortgage payments were directly caused by an adjusting mortgage rate that has increased from the standard introductory rate.
FHA Secure loans will be made by private mortgage lenders, mortgage brokers and banks and will be availible to home owners at the current market rate and insured by the FHA. The standard FHA underwriting guidelines will apply to the FHA Secure program and a new FHA approved appraisal will be ordered for the property. Under the new plan Borrowers will be eligible to refinance up to 97.75% of the total appraised value of their home. FHA will also charge mortgage insurance premiums based on the individual risk of each mortgage refinance loan that is written. By using the FHA Secure program with the standard FHA underwriting standards FHA will be able to increase the availability of the program and help even more troubled home owners.
The FHA Secure refinance program will not however help home owners who have properties that have depreciated in value and are now worth less then the current mortgage balance. it is estimated that an initial 80,000 home owners may be helped by the FHA secure program.
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