Spiraling FHA default rates prompted a U.S. Senate Appropriations Committee to authorize only $50 million for the American Dream Down Payment Assistance program. The White House had requested $200 million. Prospects appeared to dim the chances for a zero-down-payment FHA loan product offering in the near future. National Mortgage News reports:
"Senate appropriators are concerned that the Federal Housing Administration single-family program is becoming a 'lender of last resort' and needs to do a better job of educating homebuyers. 'FHA is clearly becoming a lender of last resort, taking on the most risky mortgages, especially those likely to default,' according to a report that accompanies the Department of Housing and Urban Development fiscal year 2006 appropriations bill. The FHA default rate has increased from 2.99% in fiscal 2000 to 6.9% in fiscal 2004, while claims have increased from $5.5 billion to $8.5 billion over the same period. In approving the Treasury, Transportation, and HUD appropriations bill, the Senate Appropriations Committee directed HUD to educate FHA homebuyers about the value of a home inspection. Without a home inspection, these purchasers may find themselves responsible for high-cost repairs that that they cannot afford, thus "putting the home at risk of foreclosure," the committee report said."
In the US nearly 750,000 owners are in trouble – this is up about 96% for the first eight months of this year (2007). You must first asses your ability to make payments on your loan before you consider the steps that need to be made to stop foreclosure and the refinance options available to you. If you are buried in debt then you may not b able to carry the burden of even a lower payment. You must ask yourself if the lower payment is better for your budget than getting in a lower rent situation. If saving your home from foreclosure is a viable option to consider then you must make contact with the lender who is trying to foreclose on your property. It is likely that they are already in contact with you so this may be easy to do. If you are several months over due you might need to make up a payment or two to negotiate with them to stop foreclosure. You can also show proof of your progress to refinance your home and stop foreclosure. The loan company or lender you are dealing with may have private investors that can help you out. Many foreclosure investors are in constant contact with lending institutions seeking loan opportunities for foreclosure properties.
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Posted by: Finley Warne | February 16, 2008 at 04:43 AM
If we want to save our home from foreclosure, first we must contact with the lender who is trying to foreclose our property and need to assess our ability to make payments on our loan before we consider the steps that need to be made to stop foreclosure and the refinance options available to us.
Posted by: Mark | March 18, 2008 at 03:49 AM
If you are not in a situation to pay the dept then it is better to consult your lender and try to negotiate with him and keep in contact with him regularly, in order to avoid foreclosure.
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I think it is a nice blog with great and useful information.In view of FHA loan default rate that skyrockets now,yes is too unlikely to have operative Zero-Down Mortgage Program.
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save your home: get a stop foreclosure loan
before you do anything, you must recognize the position you are in.
it is important to accept your dilemma and then prepare to move forward. start by contacting your lender and inform them that you understand you may be facing foreclosure action and that you are willing to save your home. next, you can seek a stop foreclosure loan through your current lender or a different one. loan modification kits can be a helpful guide too.
• What is it? A stop foreclosure loan is essentially a second loan. This loan is used to pay off what you owe from the previous unpaid months. It helps bring your mortgage account back to current status.
• How do you get one? Which ever bank gives you a stop foreclosure loan, they will do so based on your ability to repay; just like any other loan. Therefore, you must create a balance sheet or financial portfolio. Accuracy and honesty is of the utmost importance. You do not want to deceive yourself or the bank about your ability to repay or you may find yourself in the same position. List your assets and liabilities. Or more simply, your income and expenses. This allows you to present a case for repayment based on potential cost cutting that will provide additional cash.
• Possible Shortfalls? The interest rate on a stop foreclosure loan should not be higher than your current loan. Ideally, it should be lower so as to give you some relief. Additionally, some of these loans may be based on any equity you have built up in the house. Therefore, a default on both the mortgage and stop foreclosure loan may leave no equity at all. It also may make the house less attractive to potential buyers if a sale is your only option.
• Should you do it? If you are facing certain foreclosure, seeking a stop foreclosure loan seems like an easy decision. It instantly brings your mortgage back to current status and essentially gives you a second chance. Be careful of the interest rates before agreeing to one and remember to shop around with different lenders before agreeing to a rate.
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you may not need an attorney to stop foreclosure quick
“if you are facing foreclosure, it is imperative that you look into options to stop foreclosure quick.
If you are facing the possibility of losing your home, you can take action, such as a loan modification kit or short sale, to stop foreclosure quick. In this article, you will learn about some possible actions that you might take to stop foreclosure quick.
Depending on the laws in your state, you may need an attorney to stop foreclosure quick. However, in most cases, you DO NOT need to consult an attorney, which could save you thousands of dollars. You must move quickly if you wish to stop this process. If you have fallen behind on your house payments, you will need to contact the mortgage lender and attempt to negotiate a reasonable repayment schedule that will get you out of arrears.
As foreclosures are becoming more common, many people are simply walking away from their homes when a few phone calls or a loan modification kit may have been able to stop their foreclosure quickly. Mortgage lenders are willing to negotiate, and absolutely would rather you come up with alternatives rather than them having to legally take your home.
You should be aware of what the laws are in your state to see how much time you have to stop this process. In some states, such as Arizona, you will need to move quickly, but if your state has judicial foreclosure, such as Florida, you probably have more time.
Knowing your states legal timeline will allow you to stop foreclosure quick, because you may have more time to research what option will get you the best results for your particular situation. However, you must follow through on the option you choose, because if you fail to do so, you will be right back where you started.
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