|
In response to the subprime fallout, the NATIONAL ASSOCIATION OF REALTORS® is encouraging the U.S. Department of Housing and Urban Development to act quickly to make changes to the FHA mortgage insurance program so that more home owners and their families can avoid foreclosure.
In a letter sent to HUD Secretary Alphonso Jackson, NAR President Pat Vredevoogd Combs strongly urged action by HUD to change FHA rules and waive the requirement that a home owner’s mortgage be “current” in order to refinance it into an FHA loan product.
“Many home owners who were able to make timely payments under the original terms of their loan are finding it difficult to make payments after rate adjustments,” Combs said. “We believe FHA can design a mechanism where creditworthy borrowers could refinance subject to prudent guidelines and therefore avoid losing their homes.”
Gaining Support
In recent days, it has been reported that various lenders have expressed a willingness to engage in this program to avoid costly foreclosure proceedings. This would not be a bailout for lenders but would be a vehicle for helping to prevent people from losing their homes, Combs said.
“NAR believes in a strong FHA and would support efforts to ensure that only borrowers who truly have the capacity to repay to receive the opportunity to refinance under such changes,” Combs said.
More Public Education Needed
NAR is also asking HUD and the FHA to undertake a “robust public education campaign” to promote foreclosure prevention by raising the awareness of FHA and HUD programs. NAR has partnered with HUD and FHA in the past to create and distribute brochures designed to inform potential homebuyers about the various FHA programs.
“We believe that with some minor regulatory adjustments to the FHA program that a significant subset of borrowers facing the prospect of foreclosure could safely refinance into an FHA mortgage,” Combs says. “We are committed to continue our efforts with HUD and FHA. We not only want to see people achieve the American dream of home ownership but also we want them to keep it.”
Source: REALTOR® Magazine Online
|
Working Together for You! 
