FHA To Help Troubled Borrowers BEFORE They Become Delinquent
January 26th, 2010 categories: Buyer Resource
If you are having trouble making payments on your FHA mortgage, there is a new program that may help. The Federal Housing Administration announced on Friday, January 22, 2010, that you no longer have to be delinquent on payments in order to get help.
Is this a sign that the FHA is now being PROactive instead of REactive? This is not just a sign that the FHA is being proactive, it is definitive proof!
The Federal Housing Administration announced that in some instances, the FHA will assist troubled borrowers BEFORE they become delinquent or miss payments. All that would need to be proved is that any mortgage payment problems were related to a reduction in income from:
- Job Loss
- Fewer Paid Hours
- Slashed Wages
- Decline In Self Employed Business Earnings.
FHA Commissioner David Sterns gave a little more insight into the situation with the following statement: “The FHA has always required lenders to establish early contact with delinquent borrowers to discuss the reason for missing a payment and to evaluate reinstatement options. Now servicers will have additional options for those borrowers who seek help before they go delinquent, which increases the likelihood that the borrower will be able to retain their home.”
You can see from the above quote that the overriding goal for the FHA is to keep borrowers in their home, no matter their circumstances. The FHA has been helping delinquent borrowers modify their loans, now they are planning to help those who will likely become delinquent.
So what are the remedies that may be available to those who qualify? There are currently only two options that were listed…but these are two very good options.
- Forbearance – Lenders agree to postpone or reduce payments for a specified period of time. Please note that forbearance does not forgive payments, the payments are simply added to the balance of the loan.
- Permanent Payment Reductions – The permanent payment reductions are utilized in more severe cases. This may be done by increasing the length of the loan, reducing the interest rates, forgiving principal owed, or any combination of the three.
As we stated before, it is clear that the Federal Housing Administration ultimately wants to keep borrowers in their homes, and is giving good options to do just that. The new programs are helping to reduce the chance of future problems.
Helping people stay in their homes helps keep families intact, and also helps keep Real Estate values higher than they would be otherwise.
If you have any questions regarding FHA Loans, or anything related to Sonoma County Real Estate, please do not hesitate to contact us
