About Government Refinance and Home Purchase Programs

Information and Updates on Government Mortgage Programs
Filed under Government Mortgage Financing Programs News

Last Fall President Bush unveiled his FHASecure plan and hailed it as a wonderful way to help homeowners struggling with adjustable rate mortgages (ARMs). The idea was that while FHA normally rejects borrowers who had more than one late payment on their mortgage in the last 12 months, with FHA Secure a loophole was added that said “you can be late on your mortgage more than once if the late payments happened as a result of your ARM resetting upward”. Sounds ok right? The problem is the plan hasn’t worked at all. There were all kinds of problems with it from the beginning and recent data published in the NY Times says that only about 2000 homeowners have been able to take advantage of it while millions of others have lost their homes or are on the verge of losing them.

The problems were numerous from the start. First, very few banks were participating at all because they were having trouble finding anyone to sell the loans to on Wall Street. Second, the plan allowed for late mortgage payments but not other credit problems and most people tend to go late on all their other bills before they go late on the mortgage. Third, it didn’t help people before they went late on their mortgage so the prudent borrowers looking to prevent trouble were not helped at all by this program.

In short it was a disaster.

How long until we get a new President again?

Comments (0) Posted by G.R.A. Admin on Wednesday, April 30th, 2008

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