On August 31, President Bush announced that HUD will help families avoid Foreclosure by providing a brand new FHA loan called the FHA Secured loan.  This loan will directly impact Delaware Home Owners facing foreclosure.  Under the new FHASecure plan, FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing.

FHA will implement risk-based premiums that match the borrower’s credit profile with the insurance premium they pay.  This means riskier borrowers pay more for their insurance. This common-sense, risk-based pricing structure will begin on January 1, 2008.  This is what happens when a person receives private mortgage insurance with non-FHA loans.

FHASecure will be underwritten to ensure the borrowers have the ability to repay the loan, will require escrow for taxes and insurance, and will continue to offer unprecedented foreclosure prevention assistance. The FHA has never permitted and will not include pre-payment penalties like on subprime loans or teaser rates that are common in exotic mortgages and have caused much of the current market troubles with the credit liquidity crisis.

To qualify for FHASecure, eligible Delaware homeowners must meet the following five criteria:

1. A history of on-time mortgage payments before the borrower’s teaser rates expired and loans reset;
2. Interest rates must have or will reset between June 2005 and December 2009;
3. Three percent cash or equity in the home;
4. A sustained history of employment; and
5. Sufficient income to make the mortgage payment.

If you need more info on this product or need help for yourself or a client that would benefit from this new loan please feel free to contact me at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713