Government Program to Prevent Foreclosures:

What is the FHASecure Plan?

This is President Bush's attempt to keep 80,000 homeowners out of foreclosure.  The program allows borrowers with good credit to qualify for a refinance when they would otherwise be unable to qualify. For example, homeowners who had been making timely mortgage payments prior to their loans adjusting, but are having difficulty making the current, inflated payments.

What does it mean to me?
For homeowners, who are in ARMs, it means an opportunity to get out of your "time-bomb" loans and into a more stable mortgage.

How do I qualify?
To qualify for FHASecure, eligible homeowners must meet the following five criteria:

1. A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset.

2. Interest rates must have reset, or be scheduled to reset, between June 2005 and December 2009.

3. 3% cash or equity in the home.

4. A sustained history of employment.

5. Sufficient income to make the mortgage payment.

Here are the 5 other things you need to know regarding the FHASecure Plan:

1. The payment-to-income ratio and debt-to-income ratios remain 31% and 43%, respectively.

2. The homeowner's mortgage payment history during the 6 months prior to the reset should reflect no instances of making mortgage payments outside the month due and that other recurring obligations were paid on time.

3. If your lender will accept a payoff that is less than what is owed them. FHA will allow the current lender to write off the amount of indebtedness that cannot be refinanced into the loan because of insufficient equity in the home.

4. If the total amount of the settlement charges exceeds the maximum LTV, FHA will allow the current lender to hold a 2nd mortgage to cover the difference (including closing cost, arrearages, taxes, etc.) The combined loan to value may exceed the maximum LTV and the FHA mortgage limit for the area.

5. Homeowners who became delinquent after their payment reset are still eligible for this program.

For more information about FHASecure and other FHA products, please call 1-800-CALL-FHA or visit www.fha.gov or www.hud.gov. For a list of your local homeownership center or a HUD-approved housing counseling center, go to www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm