Homeowners all over the country are facing the effects of the mortgage crisis. A few years ago, lenders relaxed their standards of lending and gave mortgages to borrowers that were less credit worthy. Overall, there are many factors that contributed to this decline. The foreclosure rate has been on the rise and many homeowners’ are in dire need of help. Some borrowers bought homes with stated income loans; which meant the borrower did not need to verify his or her income.
People were buying homes in which they could not afford. They may have been offered a low introductory rate with an adjustable rate. Many of them were told they could refinance in a year or two with no problem and settle into a fixed rate. The problems with the current economy also did its damage. Loss of jobs and incomes hurt the average American families. Combine that with the increasing rates adjusting on the homeowner and you have a sticky situation on your hands.
There is still some hope for certain borrowers in these sticky situations. The purpose of this article is to shed light on the help FHA can provide for eligible borrowers. Current homeowners in adjustable rate mortgages, whom are behind on their mortgage or whom have had mortgage late payments can potentially be helped with the support of the FHA Secure Loan. Borrowers already in FHA loans also have opportunities to refinance with a streamline refinance, which keeps them in an FHA loan but gives them an opportunity to lower their rate or add additional cash out for an (EEM) Energy Efficient Mortgage. The EEM was designed to help current FHA borrowers add energy efficient features to their home when they may not be able to afford them otherwise. Standard FHA loans for borrowers current on their mortgage are also available.
Although there are guidelines for these mentioned loan programs, they are less strict than conventional mortgages. FHA is based on the idea of “make sense” loans. They rely on letters of explanations and the ability to repay the loan rather than credit score alone. The more homeowners that are informed about the benefits of FHA the better chance we have to start cleaning up the mortgage crisis we have been facing for some time. When hard working homeowners are losing their homes to foreclosure, there is a great need to educate homeowners to options they may have.