Hope for Homeowners & FHASecure Help Homeowners Refinance Risky Loans
Hope for Homeowners is a new program, created by congress, to assist homeowners in refinancing their “at risk” loans into more affordable FHA, insured mortgages.
It is estimated that over 400,000 homeowners could avoid foreclosure through participation in the voluntary program, by enrolling before September 30, 2011.
In order to qualify for the special refinancing, the original loan must have been originated on or before January 1, 2008. In addition, the existing mortgage payment must exceed 31 percent of the borrower’s gross monthly income.
FHASecure is another program designed to help homeowners refinance and avoid foreclosure. The program, which went into effect on July 14th, offers borrowers with ARM’s, the option to refinance with an FHA insured mortgage designed to lower the monthly mortgage payment. Under the FHASecure program, lenders can not disqualify borrowers based on loan payment deliquency and the lender may actually offer a second mortgage to make up the difference between the appraised value of the property and the outstanding balance due.
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Tags: fhasecure, foreclosure, hope for homeowners, housing news, mortgage, refinance, second mortgage
October 4th, 2008 at 10:19 pm
I hope you can answer my questions. Rather than ask them separately, I’ll just state the facts and ask questions as I go along. Thanks in advance.
My only home (my primary residence) has been appraised at $610,000. I owe $650,000 on the first mortgage to lender A, $25,000 on a second mortgage to B, and $22,000 on a third mortgage to C. Assume, please, that I qualify in all respects for the FHA re-finance (including all lien holders agreement to clear the liens).
90% of the $610,000 is $549,000, under the maximum loan amount FHA will guarantee. However, there is the 3% upfront Mortgage Insurance premium and the annual Mortgage Insurance premium of 1.5% to consider, right? Three percent of $549,000 is $16,470. That puts me over the $550,400 allowed, right? Am I disqualified? Is the 1.5% added to the total in the first year or not?
If I am not qualified based on the above scenario, please change the numbers so that I am - say the property appraised at $593,000. Ninety percent of $593k is $533,700. Three percent of $533,700 is $16,071, added together is $549,711 (under the $550,400 max). Does that then work (it’s assuming the 1.5% is not calculated until next year)?
If we assume it does work, six months later I sell the home for $625,000. Since it is within the first year, all the profit goes to the FHA. Correct?
If I wait to sell it for three years for $650,000, I have to split the profit with the FHA - I get 20%, the FHA gets 80%, correct (100-0 for year one, 90-10 for year two, and 80-20 for year three)? Assuming that’s correct, the profit would be (ignore closing costs and principal reduction for the example) $650,000 - $533,700 = $116,300. The FHA would get 80% of the $116,300 (or $93,040), leaving $23,260 on my side. How is the $23,260 divided between A, B, C, and me?
Thank you very much.
Robert Hall
October 7th, 2008 at 10:19 am
Robert, I forwarded your question to a manager for Sun Trust Bank. I will post his response as soon as I receive it.
Thank you for the question!
November 16th, 2008 at 12:03 am
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