HUD has recently announced a refi-fhasecure program designed to help consumers who have fallen behind on their recently adjusted loans. This refi-fhasecure will allow a consumer to roll up to 6 months past due payments into a new refinance loan as long as they qualify. We will be taking a look at the refi-fhasecure program parameters available to the public and explain who exactly can qualify for this loan.If you live in a high cost area, such as California, Florida, or metropolitan New York, New Jersey or Connecticut, chances are your property is worth too much money or your loan amount is too high to qualify for an FHA secure refinance. If your existing loan amount is higher than $300,000, please write your Senators and your Congressmen to request that the FHA program be extended to help borrowers with larger loans in high cost areas.
In order to qualify for a FHA refi you will have to prove that your late payments started after your adjustable rate mortgage increased, FHA will not approve borrowers who just paid late due to financial irresponsibility. You will not be able to receive any cash back for the FHA Secure program. The FHA Secure program will allow home owners with delinquent mortgage payments to refinance to a fixed rate FHA mortgage. The FHA secure program will not however help homeowners who have properties that have dropped in value and are now worth less the n the mortgage balance. The FHA secure program will allow home owners to refinance their home up to 97.75% of the appraised value. All home owners that refi with the FHA secure program will still have to qualify under FHA lending guidelines to ensure they have the income to repay the mortgage and avoid the same problem they are refinancing out of.
The FHASecure program will not be available until January 2008. There are certain restrictions to use FHA-Secure. One of the requirement is that the mortgage being refinanced must be a non-FHA Adjustable Rate Mortgage (ARM).
Refi-FHASecure loans can help delinquent property owners obtain a FHA-insured refi if you have about 3% equity in the home, established income stream and a history of ontime payments for at least 6 months prior to adjustment date.
Under FHASecure, borrowers that are delinquent on their mortgages as a result of interest rate resets will now be able to refinance using an FHA-insured mortgage. The FHA has never permitted and will not include pre-payment penalties or teaser rates that are common in exotic mortgages and have caused much of the current market troubles.
If you are looking to refi-FHASecure may be a good bet if you are in an 80/20 loan currently. Even if your home has gone done in value, you may still be able to able refinance your adjustable rate first mortgage lien. You would just need a subordination agreement from your current second mortgage holder. There is no CLTV(combined loan-to-value) restriction on the refi-FHASecure loan as long as you qualify otherwise.
