From Realtor Magazine Online, Daily Real Estate News December 31, 2008
Despite pleas from consumer advocates and trade groups, HUD will end its FHASecure program on Dec. 31, explaining that continuing the program, which insured refinancings for delinquent borrowers, would hurt the FHA financially.
FHASecure is a refinancing option that gives home owners with non-FHA mortgages the ability to refinance into a FHA-insured mortgage. With FHASecure, the lender will not automatically disqualify home owners because they are delinquent on their loan, and the lender may offer a second mortgage to make up the difference between the value of their property and what you owe.
The cost of keeping the initiative in place "would have to be offset by either substantial across-the-board single-family program premium increases or the suspension of FHA's single-family insurance programs altogether," according to Federal Housing Commissioner Brian Montgomery.
In a joint letter to HUD, consumer advocacy groups, along with the Center for Responsible Lending, insisted that the FHASecure program is more helpful than the Hope for Homeowners program because the absence of legislation governing the effort enables it to "adequately adapt to market evolutions."
The groups had hoped to win FHASecure an extension at least through 2009.
Source: American Banker (12/30/08) Marc Hochstein
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