What was FHASecure Refinance?
The foreclosure process is no laughing matter. The housing market has had its fair share of ups and downs, but the threat of foreclosure has its place in the back of almost every homeowner’s mind. Since the housing crisis not too long ago, there have been a few attempts at tackling the foreclosure problem. From the now expired Home Affordable Modification Program, to Fannie Mae and Freddie Mac’s Flex Modification program and many more in between, home owners now have options when it comes to avoiding foreclosure.
When you are at risk of the bank foreclosing on your house, every action you take must be done quickly and with great consideration. Sadly, it is often the case that if you find yourself in that position, you are not typically eligible to refinance your home, effectively removing such a viable option from the table at a crucial time. Refinancing your mortgage has always been an acceptable method for reducing monthly payments, but it's usually reserved for those in decent financial standings, not those facing financial hardships. Which was what the FHASecure refinance program was aiming to fix.
If you had an adjustable rate mortgage loan that you were having trouble affording, then the FHASecure program might have been the perfect solution for avoiding foreclosure. FHASecure refinancing was designed to assist homeowners who were up to three months delinquent on their monthly mortgage payments (under certain circumstances) refinance their mortgage and lessen their financial burden. The best part was that it wasn’t exclusive to homeowners with FHA Mortgages either, eligibility is extended to mortgages outside of FHA guaranteed loans.
FHASecure Refinance Explained
A temporary program that began in 2007, the FHASecure program was designed with foreclosure avoidance in mind. In particular, the program targeted homeowners who had adjustable rate mortgages who were finding it difficult to make their monthly mortgage payments amidst rising interest rates. The goal was to ensure that these homeowners could refinance their loans to more favorable terms, and reduce their monthly payments.
Through the program, homeowners with bad credit and in less than perfect financial standings could refinance their adjustable rate mortgages into fixed rate mortgages. As with other FHA financing options, the loans carried 97% Loan to value, meaning that homeowners only needed to come up with a down payment of 3%.
In addition, the program was never meant to be exclusive to homeowners with FHA mortgages. In fact, it was intended to be used specifically by homeowners with conventional ARMs, allowing them to not only avoid foreclosure, but to refinance their non-FHA loan into a fixed rate mortgage guaranteed by the FHA.
While the program was only a temporary solution, it did help quite a few homeowners to escape the foreclosure process. In its place, many lenders have mortgage modification programs that are designed to provide mortgage payment relief in a pinch. If you feel as though you are in need of assistance to avoid foreclosure, reach out to us at home.loans. Our mortgage experts are always standing by to help you find your own personal mortgage solutions.