| Rich Chatfield--Sebastian & Vero Beach Real Estate |
"Your Treasure Coast Connection" |
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WASHINGTON – Sept. 10, 2007 – Recent homebuyers who have a risky ARM should learn about the FHA’s new program, FHASecure. The program helps subprime borrowers with good payment histories and at least 3 percent in home equity.
The policy shift – strongly supported by the National Association of Realtors (NAR) and put into effect by the U.S. Department of Housing and Urban Development (HUD) in mid-July – is one of the first tangible changes to come out of the federal government’s efforts to curb defaults in the subprime market.
Defaults are expected to rise significantly among subprime borrowers in the next two years as the low starter rates that lenders used to lure customers expire and interest rates move upward, making monthly payments unaffordable for potentially millions of borrowers.
Only a portion of subprime borrowers who are facing spiraling monthly payments will be able to refinance into a government-backed loans, however, because of the payment-history and equity restrictions imposed by FHA. But for those who qualify, the new policy opens the door for borrowers in high-risk financing to move into a fixed, long-term mortgage that’s far safer.
For more information on FHASecure, visit HUD’s Web site at:
http://www.hud.gov/news/release.cfm?content=pr07-123.cfm&CFID=1775932&CFTOKEN=74094504 |
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