There is a new program by the Federal Housing Administration (FHA) that will insure $300 billion worth of payments of mortgage loans starting October 2008 up to September 2011. This is called the hope for homeowners program, which has already been signed into law. The name is apt to give aid to the financially-ailing homeowners in mortgage.
This law allows homeowners to refinance their schemes of up to 90% of the current market value. This gives homeowners the extension to enjoy a low fixed rate loan and a 10% equity share.
The law also features tax credit worth $7500 for first-time or new home buyers to encourage more people to get a new home for their own. Provisions also include capping the loan limit amount to $625,000 in high price places. A $4 billion grant is set aside to renovate homes in difficult or dumped areas to do away with the deserted homes that could cause unsightly neighborhood conditions. Also present is a counseling assistance worth $180 million for people whose homes face foreclosure.
The HOPE program aims to overhaul the FHA policies designed during the period of depression, thereby giving the US Treasury control of lending money to FHLMC and the FNMA until 2009. The main thesis of the program is to support the declining housing market that drags down the country’s economy.
The law also gives the flexibility to cut loan balances of up to 40% wherein the 10% equity is already secured. However, there are restrictions and eligibility. First, you should be currently occupying your mortgaged home. You also have to explain that there was no intention of defaulting the current mortgage. Next, mortgage payments should be at least 31% of your gross monthly income. You must also not have another home aside from your current one. Inquire from your loan servicers for additional details.
For the FHA recognized lenders, mortgaged homes have to be appraised of up to 90% fair market value. Fees and other penalties must be waived by the FHA-certified lenders noting the financial difficulty of the borrower. New FHA loan borrowers should agree to zero equity loans in the period of five years except for home improvements and maintenance.
This law comes as a big help to people who are hit hard by the economic turmoil that spun in the US housing sector, although the program is not isolated to this condition alone. As much as this gives reprieve to the red flag, there are still constraints to consider making this work on the part of the borrower and the lender; considering there are over a million target participants.
For those who want to determine their eligibility for FHA assistance, just contact your nearest HUD-certified counseling outfit at the HUD or you can call up the office of FHA.
Greg Shuey is a Utah mortgage broker with Utah Financial. Together with Chase Gunderson, we specialize in FHA mortgage loans and FHA Streamline Refinance loans. We are here to educate and help you along the way when researching and obtaining Utah FHA loans.
In the state of California, when is it necessary to register/record a lease for rental property?
We are tenants in a home with a One year lease that isn’t up until next March but recently someone told us our lease isn’t valid unless we have it registered. The place we are living recently went into Foreclosure and we need to make sure we are protected under the new law Obama passed. Is this true, is our lease invalid?
what does the lease have to do with Obama?
You don’t need to record a lease.
If you want to cover yourself check out the property on cyberhomes.com once a month if the owner gets a NOD then it will show up as recent foreclosure activity or ask a local Realtor to do a title search and see if they are in foreclosure.
Either way, you have a contract and if they break it then you can sue them in small claims.
You can also ask the landlord to show you a current mortgage statment once a month to prove they are making the payments. This shouldn’t be a big deal if they are actually paying.
Another good way to find out is to have your agent do a mortgage search and find out how mucy debt service there is and calculate what the payment is likely to be including taxes and insurance….then if your rent payment is way lower then the mortgage payment you might have a problem. Most people now a days don’t keep houses with negative cash flow.
Good luck
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Financial reform smart
Congress is on the right track in moving quickly to overhaul regulation of the nation’s financial industry and end the abuses that contributed to the current recession.