HUD announced an expansion of FHASecure, a program that allows families with good credit histories who had been making timely mortgage payments before their loans reset, but are now in default, to qualify for refinancing. The program expansion creates two new categories of eligible borrowers: (1) borrowers with adjustable rate mortgages who were late on two consecutive monthly payments or at two different times over the previous 12 months (97% LTV ratio required) and (2) borrowers with adjustable rate mortgages who were late on three consecutive monthly payments or at three different times over the previous 12 months (90% LTV ratio required). Lenders will be required to ensure borrowers have the capacity to repay their mortgages, show a reasonable credit and employment history, and fully document and verify their incomes. The new loan amount would be based upon a new appraisal by an FHA-approved appraiser. Borrowers will still be required to pay upfront and annual premiums on their loans. Click here for a copy of HUD’s press release.
Alert April 22, 2008