Summary
To Qualify for FHASecure Home Loan: eligible homeowners must meet the following five criteria: 1. A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset; 2. Interest rates must have or will reset between June 2005 and December 2009; 3. Three percent cash or equity in the home; 4. A sustained history of employment; and 5. Sufficient income to make the mortgage payment.
Analysis
The actions of the President in creating a program called FHA Secure is nothing to help the consumers that really need the assistance. The FHA Secure program guidelines are as follows. To Qualify for FHASecure Home Loan: eligible homeowners must meet the following five criteria: 1. A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset; 2. Interest rates must have or will reset between June 2005 and December 2009; 3. Three percent cash or equity in the home; 4. A sustained history of employment; and 5. Sufficient income to make the mortgage payment.
Who is this going to help? The mortgage crisis is due to actual foreclosures and early payment defaults of borrowers. The people in need of help the most do not qualify for this program, the people that do qualify for this program can also qualify for any FNMA/FHMC loan in the current market. The government is so off base in this new program that none of the mortgage companies I have spoke to are even interested in the program and are not viewing this as any kind of relief. The people that the government really need to help are those currently in mortgages that have adjusted or are about to adjust in the next 6 months and the rates are adjusting up by at least 1%. The govenrment also needs to help those people that are in default on their current loan and are faced with foreclosure within the next few months. If they really want to help then maybe expanding the deferrment program that FHA has or even telling people about the program on a national basis. To truly stablize the mortgage meltdown, the government needs to help lenders that provide loans to people the same way they help the airlines in their times of crisis. Housing is just as important as Air travel and should be given more assistance to secure our financial future. Wall Street investors have cut back so much on the purchasing of RMBS that over 100 lenders have either filed bankruptcy or closed their doors in the past year and it is only getting worse. Now the nations largest mortgage lender, Countrywide, is feeling the pressures of a secondary market slowdown in the purchase of mortgage pools. The government needs to provide assistance to the secondary market and then the effects will trickle down to the consumers by way of more flexibility in the mortgage programs as well as more program availability.
