FHA Secure Initiative:

•  The new mortgage will be a 30 year fixed rate mortgage.
• The mortgage being refinanced must be a non-FHA ARM with a rate that has adjusted upward.
• The borrowers inability to make payments must be directly related to increased mortgage payments due to the interest rate reset and not due to a disregard for their obligations. The payment history must show that prior to the reset of the interest rate, the borrower was current on their mortgage payment and other debts.
• The maximum loan to value (LTV) ratio is 97.75%, up to the maximum limit for the geographical area ($475,000 in Kitsap County and $437,500 in Jefferson County).
• If there is sufficient equity, the new loan amount may include the following:
  • The existing first mortgage and any second mortgage incurred at the time of the purchase
  • Closing costs, discount points and prepaid items
  • Prepayment penalties and late charges
  • Missed mortgage payments (principal, interest, taxes and insurance).
• The maximum debt to income ratio is 31% for mortgage debt and 41% for all debt.
• Loan applications must be submitted no later than December 31, 2008.

Hope for Homeowners Program: 

• The new mortgage will be a 30 year fixed mortgage.
• The home must be the borrowers primary residence and only home.
• The existing loan must have been originated on or before January 1, 2008.
• The borrower must have made at least six payments and now not be able to pay their existing mortgage without help.
• As of March 2008, the borrowers payments due must be more that 31% of their gross monthly income.
• The value of the home must be less than the current mortgage amount. The first mortgage lender must write down the value of the loan to 90% of the current appraised value of the home. This obviously involves co-operation by the bank, but may be a better option for them than dealing with a foreclosure and sale of the home.
• Any subordinate lenders (holders of second or third mortgages) must agree to release their liens in exchange for a share of any future appreciation in the homes value. It may be more difficult to get a subordinate lender to agree to this, but if the home is worth less than the value of the loans, there is little chance subordinate lenders will see money as a result of a foreclosure.
• The borrower must share with the FHA both the equity created as a result of the write down of the mortgage, and any future appreciation in the value of the home.

You can learn more about these loan programs and others by contacting Cherie Kesti of Windermere Mortgage by clicking on the link below, then clicking on Loan Services.

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