New FHA regulations could have significant impact on homebuyers

Posted on Mar 10, 2013 in FHA Information

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Question by JIM: Is there now a government program to help “underwater” condo owners refinance at a lower interest rate?
I purchased a South Florida condo back in 2005 during the height of the real estate boom. Obviously, buy my property is now worth far less then what I still owe, even though I put 12% down and financed with a 30 year fixed. My rate is 6.25% and I am hoping to refinace while rates are lower to, at least, lower my payment and allow me to put a little more equity in each month. I live in Broward County Florida and purchased for 183,000, making my loan total 161,000. I have been on time with all payments and even tried to sqeak out a few extra dollars each month, but still owe over 140,000 after almost 7 years of payments. Condos around me are bearly selling for 70k right now and it is frustrating, after all this time and all the payments I have made, to be so far upside down. I still keep trying though and do not want to be one of the Florida property owers that just walks away because the situation is difficult. I have heard on TV that the politicians are going to “bail us out” and “allow underwater owners to refi”, but I have not recieved one dime’s worth of help and everytime I go to refi the bank wants to send out an appraiser and tells me they can only refi 80% of what the property is currently worth. Those numbers obviously do not make it possible to refi. I am hoping there is some kind of goverment refi program for owners that have paid on time, have good credit and want to dig themselves out of this without forclosure or bankruptcy. Is there such a program or refi organization for Broward County condo owners? Where would I contacxt them?
Based on the first rely to this question, I think there is a misunderstanding as to what I am asking. I am not looking for any favors. I have made every monthly payment for the last 7 years, including the years I knew the property was worth less then the amount I owed. I have maintained good credit my entire life. As long as God keeps me employeed and I am physically able to, I intend to pay all my bills including my mortgage. I mentioned “bailout” because of all the hype on television due to the housing crisis, but my main question was how to refinance. I only hope to lower my monthly mortgage payment based on the current interest rates, that have evolved due to the current economy. I know there are options, like not paying my mortgage and attempting a short sale, forclosure and bankrupcy, but this is what I am trying to avoid. I am trying not to be a burden on my neighbors even though many of my other neighbors have taken the easy route, walked away and left the condo assoc
Ok, I think HARP was the answer I was looking for. I do not want to just increase the number of years on my mortgage, and I do not expect any debt reduction, but being allowed to modify to the current interest rates seems fair to me…any other comments are welcome also 🙂
Ok, I think HARP was the answer I was looking for. I do not want to just increase the number of years on my mortgage, and I do not expect any debt reduction, but being allowed to modify to the current interest rates seems fair to me…any other comments are welcome also 🙂

Best answer:

Answer by Ed Fox
Imagine you took $ 10,000 into a casino and lost the lot. Would you expect the government to “bail you out”?
All over the world, house purchase is a gamble and homeowners cannot realistically expect to be “bailed out” by their government. Where does government money come from? The taxpayers. Why should you expect your fellow citizens’ tax dollars to be used to save you from your failed gamble?

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New FHA regulations could have significant impact on homebuyers
In an effort to "strengthen" the Mutual Mortgage Insurance Fund — insurance that protects the lender from mortgage default — the FHA is adopting new policies that would raise the annual mortgage insurance premium. "These are essential and appropriate …
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Higher mortgage insurance creating headache for borrowers
Starting April 1 and again on June 3, those mortgage insurance premiums will go up and FHA loans will be harder to qualify for. Additionally, medicine FHA borrowers will have to carry mortgage insurance for the life of the loan — a drastic change from today's …
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