About Government Refinance and Home Purchase Programs

Information and Updates on Government Mortgage Programs
Filed under Updates on FHA short refi program - HOPE loan qualifications

There was a good article over at the Washington Post recently digging in to some of the details on the pending housing bill. Here is an interesting quote from the article:

The portion of the legislation that deals with financially distressed homeowners would help an estimated 400,000 borrowers. It is restricted, however, to owners who cannot afford their current loans and have a mortgage-debt-to-income ratio above 31 percent. The owner of the mortgage — either a lender or bond investor — must agree to reduce the balance of the principal amount to 85 percent of the current market value — i.e., write off a significant chunk of what’s owed.

If these and other conditions are met — including homeowners agreeing to split any future appreciation with the government — borrowers may qualify for a new fixed-rate, 30-year FHA loan they can more easily afford.

It is still not clear whether that is 31% of the old mortgage or 31% of the new mortgage. We hope and assume it is of the old mortgage. Stay tuned for more details on that.

Comments (0) Posted by G.R.A. Admin on Sunday, July 6th, 2008

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