About Government Refinance and Home Purchase Programs

Information and Updates on Government Mortgage Programs
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Here is an excerpt from a recent AP write up related to the pending FHA reform bills:

Government officials and real estate industry groups say the current size of mortgages the FHA can back is too small to attract borrowers in expensive housing markets.

While FHA loans are insured by the government in the event of default, the mortgages themselves are made by major lenders such as Bank of America Corp. and Wells Fargo & Co., and are typically offered to investors as mortgage-backed securities by federal housing finance agency Ginnie Mae.

Brian Montgomery, the Housing Department’s assistant secretary in charge of the FHA, said the housing market’s woes warrant the overhaul. “The entire mortgage market needs the stability that FHA brings,” he said Thursday.

The Senate bill would raise the maximum mortgage the FHA can insure in high-cost areas from $362,790 to $417,000 _ the same level as loans backed by Fannie Mae and Freddie Mac.

The House overwhelmingly passed a similar bill this fall.

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