Some "highlights" of the FHASecure Initiative follow (from National Association of Realtors site):
The mortgage being refinanced must be a non-FHA ARM that has reset.
The mortgagor’s payment history on the non-FHA ARM must show that, prior to the reset of the mortgage, the mortgagor was current in making the monthly mortgage payments, i.e., the homeowner’s mortgage payment history during the 6 months prior to the reset showed no instances of making mortgage payments outside the month due.
If there is sufficient equity in the home, under additional eligibility instructions provided below, FHA will insure mortgages that include missed mortgage payments.
Under certain conditions explained below, FHA will insure first mortgages where (1) the existing note holder writes off the amount of indebtedness that cannot be refinanced into the FHA insured mortgage; or (2) either the FHA-approved lender making the new mortgage or the existing note holder may take back a second lien that includes closing costs, arrearages or previous secondary financing if the indebtedness exceeds FHA prescribed LTV and maximum mortgage amount limits.
Mortgagees must determine, as part of the underwriting process, that the reset of the non-FHA ARM monthly payments caused the mortgagor’s inability to make the monthly payments and that the mortgagor has sufficient income and resources to make the monthly payments under the new FHA-insured refinancing mortgage.
I am curious as to how others feel about this program and even more curious as to how many borrowers will actually take advantage of it?
2 comments:
"A lot of Mortgage Brokers got rich by making loans that NEVER should have been made in the first place."
I agree with your statement. Did you sell any homes during that period of time to people who probably shouldn't have been qualified?
So who's to blame? Mortgage Broker, Bank, Realtor, Buyer? Probably a little bit of everyone shares some blame. Wouldn't you agree?
I agree 100%. There is more than enough blame to go around for what is transpiring right now.
Personally I did sell homes during that time period but my specialty is dealing with people who can't get qualified traditionally. Transactions are of course set up to protect me when something goes wrong but I also protect the people I put into the home to have a way to get out if they can no longer afford the payments.
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