I have been talking quite a few people this week who would like to refinance their house through the FHA Secure Mortgage program, but can’t for one reason or another.  These people are s-t-u-c-k in their current loan and usually they think all is lost and that they are going to face foreclosure…

Until I tell them about “Loan Modification”.

I don’t actually do loan modifications — it is a process and negotiation between a legal firm and a lender where the legal firm negotiates with your current lender to get you into a better loan.  Often times as a result of these negotiations, the loan that people end up with is a better loan that I could have gotten them if they would have refinanced with the FHA Secure mortgage program!

Here are a few signs that you may be a candidate for loan modification:

• You are currently behind on your mortgage payments
• You have recently been denied when applying for a refinance of your current loan
• Your interest rate has adjusted or is going to adjust soon
• You have a prepay penalty on your current loan
• When you got your current loan, something “just didn’t seem right”
• You are concerned that you may soon be facing foreclosure or are currently in the foreclosure process
• You have some sort of hardship that is causing you financial difficulty

These are not the only signs that the loan modification process can help you, but it is a start.  Loan modification is not free (have you ever met a lawyer who would work for free?  I haven’t!) but if your options are either loan modification or foreclosure, it is definately worth it!

Call or email me and I can show you how to get started with the process.

Have you had an FHA loan in the past?  It is possible that you may be due an MIP refund and may not even know about it.  The easiest way to find out?  Go here and search by your last name.  It takes about 20 seconds, is free and is worth doing if you suspect that you may be owed money.  Some people are owed more than $1,000 and it is easy and free to claim it.

If you have any more questions about your MIP account or why you would be getting a refund, just let me know!

If you have reached the point where you recognize that you can’t make your mortgage payments going forward, it is time to act. The best time to act is as soon as you realize that you are not going to be able to make your payments… Don’t delay!

If you aren’t interested in keeping your home – skip the rest of this post and learn about – “Jingle Mail!”

If you want to keep your house, here are five simple steps to follow that could end up saving your house.

1. Do Something.
2. Start With Your Current Lender.
3. See If You Can Qualify For a “Regular” Refinancing Option
4. Talk To A Housing Counselor
5. Sell Your Home

Step 1 – Do Something.
So… you are currently late on your mortgage. The future of making your mortgage payment as it now stands seems like an impossible mountain to climb.

You may be 30 days late.

You may be 60 days late.

You may be 90 days late.

You may have been 30 days late for 3 months running.

For this step in the process, it doesn’t really matter how many lates you have had in the past 12 months or how many days late each of those lates were… if you are in the situation where you are currently late on your payment…

DO SOMETHING!

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FHA recently added a 95% cash out option to their loan options, which allow borrowers to cash out limits of up to 95% of the home’s value and use the money for just about anything, from paying off medical bills to eliminating debts in collection, from buying a new truck to going on vacation.

While homes must fall within a certain price range to be eligible for FHA loans, there is no limit on the income of the borrower. While conventional loan programs have, for the past several years, been somewhat more popular than FHA loans, the FHA 95% Cash Out loan has some borrowers thinking twice.

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Much has been made of late on HUD trying to eliminate Down Payment Assistance (DPA) programs such as the popular Ameridream and Nehemiah programs.  HUD actually issued a rule in September banning all down payment assistance from the seller, effectively closing down the traditional DPAs.  Both companies sued and were issued an injunction until the judge can rule on the Ameridream case.

But why is HUD trying to shut these programs down when their name just sounds so good…”down payment assistance”? 

You first have to understand how the DPAs work with FHA financing. 

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Have you or a loved one considered a reverse mortgage? 

Are you intrigued by what you hear but afraid that it sounds just too good to be true.?

You’re not alone, more and more people are asking me about reverse mortgages and getting the right reverse mortgage set up can give a much needed lifeline to seniors that are struggling to make ends meet every month. 

How does it work? 

A reverse mortgage is a loan that eliminates your monthly mortgage payment and uses the equity built up in it to give the homeowner a monthly income, a line of credit, or cash at closing to pay off bills, or any combination of the above. 

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One of the main qualifications of a FHASecure loan is that you must have had good mortgage payment history prior to an ARM interest rate reset.  But what if the rate reset has not caused you to fall behind on your mortgage, just on everything else (credit cards, car payment, etc.)? 

Many of you are familiar with the old adage…no matter what else…make sure you make the mortgage payment!  This is good advice.  A home is where we come for shelter.  It is where we rest our head at night.  It also is the largest financial investment most of us will make in our lives.  Losing it because we cannot make the payments is a difficult thing to do. 

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FHASecure is one financing option that is designed to help people get out of bad adjustable rate loans they are currently in and can’t otherwise get out of. This program is a great opportunity for thousands and thousands of people in this situation.  FHA also has other great financing opportunities and one in particular that is gaining popularity with the baby-boomer generation – Reverse Mortgages.

There are many different types of reverse mortgages but none as good as the FHA backed Reverse Mortgage.

Did you know that FHA insures Reverse Mortgages?

They do!

The program is called The Home Equity Conversion Mortgage (HECM).

This program has become more and more popular due to the increase in home prices (equity available) and the aging demographics of America.  Some of the important information about this program includes:

Eligibility & Repayment
The Home Equity Conversion Mortgage is the only reverse mortgage insured by the federal government.  HECM loans are insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD).

The FHA tells HECM lenders how much they can lend you, based on your age and your home’s value.  The HECM program limits your loan costs, and the FHA guarantees that lenders will meet their obligations.  Lenders can always give you the maximum cash available to you.

HECM loans are available in all 50 states, the District of Columbia, and Puerto Rico. To be eligible for a HECM loan:

1. You, and any other current owners of your home, must be aged 62 or over, and live in your home as a principal residence
2. Your home must be a single-family residence in a 1- to 4-unit dwelling, a condominium, or part of a planned unit development (PUD). Some manufactured housing is eligible, but cooperatives and most mobile homes are not.
3. Your home must meet HUD’s minimum property standards, but you can use the HECM to pay for repairs that may be required.
4. You must discuss the program with a counselor from a HUD-approved counseling agency.
    

Questions about Repaying a Reverse Mortgage and in particular the HECM?
As with most reverse mortgages, you must repay a HECM loan in full when the last surviving borrower dies or sells the home.  It also may become due if one of the below happens:

1. You allow the property to deteriorate, except for reasonable wear and tear, and you fail to correct the problem.
2. All borrowers permanently move to a new principal residence.
3. The last surviving borrower fails to live in the home for 12 months in a row because of physical or mental illness.
4. You fail to pay property taxes or hazard insurance, or violate any other borrower obligation.

FHA HECMs Versus Other Reverse Mortgages - What’s better?
HECM loans generally provide the largest loan advances of any reverse mortgage.  HECMs also give you the most choices in how the loan is paid to you, and you can use the money for any purpose.  For example, you can take the money in a lump sum, you can take it and put it on a credit card (which pays you interest) and draw on the money anytime you would like or you can take the money in monthly installments.

As with other FHA insured programs, these HECM loans are designed to help a segment of the population (in this case, older Americans who want to convert years of their hard-earned equity into cash so they can live comfortably in retirement) and are an excellent financing choice for those people in the right situation.  As always, I am available for any other questions you may have about HECMs or any other FHA financing.