Whats New With FHA- The Bay Area is Ready and Waiting...
The House of Representative was slated to resume consideration of a Federal Housing Administration refinancing bill this morning despite a veto threat from President Bush and efforts by Republican congressmen to disrupt House proceedings. The FHA bill (H.R. 3221) would refinance an estimated 500,000 borrowers with "underwater" mortgages into FHA-insured loans. It is a voluntary program that offers investors/servicers the option to refinance the loan if they agree to write down the principal amount to 85% of the current appraised value. The Bush administration contends that the FHA refinancing bill is a "bailout" for lenders and speculators that would lead to high default rates and losses to the FHA insurance fund. In a Statement of Administration Policy, the White House says the administration prefers an expansion of the FHA Secure proposal that would help 100,000 borrowers with underwater mortgages refinance into FHA loans. "These new FHA-insured loans are expected to commence in July following a 60-day comment period to the mortgage industry," the SAP says. The administration announced changes to the FHA Secure program April 9, but lenders are still waiting for the Department of Housing and Urban Development to release the underwriting guidelines and the rates for the mortgage insurance.
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