So, with all the horror stories of people losing their homes, rates adjusting, astronomical mortgage payments, job loss etc..., the government decides to formulate a new FHA program aimed at helpig borrowers who are 'facing foreclosure'.
The short version of the program is this: Borrower has an adjustable rate mortgage. Rate adjusts. They are late on some credit card payments and some mortgage payments, but want to keep the house. The idea would be, FHA would refi the loan to a lower, fixed rate and help keep that borrower from losing the house, which is supposedly a lose-lose situation.
First round of pickiness states that the borrower can have no late payments PRIOR TO the adjustable rate hike. Meaning, no irresponsible loan hog will get a new deal. Fine. I can grasp that. You don't want to 'bail' out someone who is reckless with their spending, and not responsible with their debts.
But the second round is really bothering me. See, they won't help if the house is IN foreclosure. So, if you miss one or two payments, and your lender has not filed foreclosure paperwork yet, you're fine and can get approved. BUT, if they have, you're disqualified.
Who does this help? The people will lose the house, the banks will have another property they don't care about, and sales prices continue to plummet because no one has confidence in the lending system, and therefore won't buy at any price.
If the program is supposed to help those 'facing' foreclosure, why do they leave out the biggest group- people who are IN foreclosure?
I just don't get it. Has anyone had any experiences with this program yet? Positive experiences, I mean. So far, I've just heard of a lot of turned down applications, and a lot of disappointment.
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