FHA Secure Loan Program

The new FHA Secure loan program is a new refinance option that is being offered through the FHA to home owners that have fallen behind on their mortgage payments due to increasing interest rates and payments on their adjustable rate mortgages. The FHA Secure loan program is the Bush administrations initiative to slow the record foreclosure rate in America.

The FHA Secure loan program is designed to help home owners who took out subprime adjustable rate mortgages and other borrowers facing foreclosure due to an adjustable rate mortgage. Many home owners are finding the new increased mortgage payments difficult or impossible to pay every month and many home owners are now sliding towards foreclosure. The FHA secure program would allow these home owners to refinance their adjustable rate mortgage into a more stable fixed rate mortgage and include up to 6 months past due mortgage payments into the loan balance. However the home owners must prove that the payment increase from the adjustable rate mortgage was the cause of their delinquent mortgage payments and not lack of financial responsibility. FHA will also permit back taxes and insurance to be included into the new loan amount. No cash out refinances are allowed with FHA secure.

FHA Secure will be underwritten with standard FHA guidelines that ensure the borrowers have the ability to pay the new mortgage note and will also require home owners to escrow their property taxes and insurance. The FHA would have the ability to adjust the mortgage insurance premiums on each loan on a case by case basis depending on the risk factor of the borrower. FHA hopes the insurance adjustment option will help more homeowners qualify and save their homes from foreclosure. The new program will allow home owners to refinance up to 97.75% of their home appraised value, Unfortunately the FHA secure loan program will not help home owners who have a home that has depreciated in value