Bob Tedeschi of the New York Times wrote up this article on the most recent FHA initiatives recently:
When President Bush announced plans late in August to help borrowers who were struggling to keep up with their adjustable-rate mortgages, local housing advocates and lenders waited eagerly for details of exactly how the initiative would work.
Now that the Federal Housing Administration has disclosed those details, the jury is still out. “I think there’s a subset of borrowers this will help,” said Brian Chapelle, a partner in Potomac Partners in Washington, a consulting firm to the mortgage industry. “Whether it’s the 240,000 people the Bush administration said it would help, we’ll have to see.”
At the heart of the initiative is a new program, FHASecure, focused on the millions of people who took out adjustable-rate mortgages in recent years. Many of these loans had low initial interest rates that increased sharply after two or three years.
Often, mortgage companies lent money to those borrowers based on their ability to pay only the lower rate, and now millions are struggling to keep up with higher payments.