The FHA Foreclosure Rescue Program, which aims to refinance 400,000 struggling or delinquent homeowners into government-insured fixed-rate mortgages requires that mortgage holders "agree to reduce the LTV ratio to at least 90% and pay a 3% upfront FHA mortgage insurance premium".
Effective October 1, 2008 the foreclosure rescue program starts, "Borrowers must share future appreciation with FHA and pay a 1.5% annual FHA insurance premium", which is three times higher than the current annual premium. It also requires all second or subordinated liens to be extinguished voluntarily before a troubled loan can be refinanced.
First time homebuyers receive $7,500 tax credit that works like an interest-free loan, but they need to pay it back within the following 15 years. The program provides $11 billion in mortgage revenue bond money for refinancing sub prime borrowers, loans for first-time homebuyers and financing for affordable rental housing.
It's required that all individual loan originators, bankers and brokers embrace licensing and registration standards. This was signed after the Federal Reserve instituted new regulations to combat predatory lending.
Borrowers must document income and assets in order to qualify for the mortgage, while "stated income" loans are no longer allowed.
Does anyone think it would help some homeowners who are in trouble right now?
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