THOUSANDS OF FLORIDIAN HOMEOWNERS COULD BENEFIT FROM NEW GOVERNMENT PROGRAM
HUD Secretary tours Fulfillment Center to promote safety and affordability of FHA-backed mortgages
JACKSONVILLE – Thousands of Floridians are benefiting from a new government-backed mortgage refinancing resource, and many more can still be helped, U.S. Housing and Urban Development Secretary Alphonso Jackson announced today. Following a tour of Bank of America’s government lending fulfillment center, Jackson highlighted HUD’s FHASecure product and other efforts put in place by the Bush Administration for homeowners who need helping staying in their homes.
“HUD’s central goal remains promoting sustainable homeownership. We are eager to introduce more Americans to the safety and security of HUD’S Federal Housing Administration (FHA) loans. That’s why last year, President Bush announced the FHASecure program. It is targeted to families with subprime loans who have good credit and payment histories who want to refinance into a safer loan. For the first time, even if they’re delinquent, these families are now able to qualify for an FHA loan,” Jackson said in a speech to 300 Bank of America employees.
Compared to exotic subprime loans, government insured loans through FHASecure offer reliability and affordability. FHASecure, which refinances mortgages that are current or past due, has been able to assist over 76,000 Americans since last fall, including nearly 3,000 in Florida. FHASecure will help 300,000 families nationwide by the end of this year.
More than 90 percent of borrowers who refinanced from the subprime market into the FHA now have 30-year fixed rate loans with much lower monthly mortgages. Overall, FHA has seen a dramatic increase in business from homeowners trying to refinance out of their high-cost, high-risk subprime loans.
“If Congress would complete their work on FHA reform, we could reach even more homeowners who need help, especially in Florida. The FHA has done a great job. But it’s 74 years old. A number of its regulations are outdated, pricing it out of many housing markets. For two years, the President and I have urged Congress to modernize the FHA. Despite overwhelming bipartisan support, a final bill has not reached the President’s desk. Every day of delay puts families at risk. Congress must act,” said Jackson, who was joined by Senator Mel Martinez for his visit to the fulfillment center.
The Expanding American Homeownership Act would increase loan limits for FHA-insured mortgages in high-cost areas, relax down payment requirements, and allow the FHA to offer fair and flexible insurance premiums. These long-awaited bipartisan improvements would help 250,000 Americans qualify for FHA-backed loans by the end of this year. The legislation has been passed by the U.S. House and Senate, but a final version has not yet been sent to the President for his approval.
Jackson also said HUD is sponsoring foreclosure prevention workshops around the country, including tomorrow in Palm BeachCounty, for residents who need one-on-one assistance to help restructure their loans to keep their homes. The workshop will take place from 9:30am to 2:30pm at Boynton BeachHigh School, 4975 Park Ridge Blvd, Boynton Beach, FL.
“A survey this week found that more than half of delinquent homeowners didn’t know that free counseling exists. In these workshops, industry leaders meet with families face-to-face. Our HUD-approved housing counselors learn their stories so they can offer to help. Families leave knowing that we’re in their corner, eager to find a solution-to trade silence and shame for hope. President Bush has increased funding for housing counselors by 150 percent since 2001. They’re building lasting relationships of trust at the community level,” said Jackson.
Secretary Jackson and Treasury Secretary Henry Paulson have also worked with lenders, loan servicers, mortgage counselors and investors to establish a private-sector alliance called HOPE NOW. Overall, the industry has already assisted 370,000 homeowners and HOPE NOW has contacted more than half a million subprime borrowers. This alliance has implemented a plan that will help up to 1.2 million homeowners avoid foreclosure over the next two years in one of three ways:
- Refinancing existing loans;
- Moving borrowers into FHASecure loans; and
- Implementing a five-year freeze on reset interest rates for subprime loans.
Jackson also pointed to HUD’s new Fair Lending Division, which is holding predatory lenders accountable for their actions. The new division, which is a first for HUD, is investigating discrimination complaints against lenders who have allegedly violated the Fair Housing Act by refusing to make mortgage loans, refusing to provide the same information regarding loans, or imposing different terms or conditions for granting a loan, such as factors based on the race or national origin of the borrower.
“The vast majority of lenders are fair and above-board. But I’ve seen the damage that discrimination can do. I strongly believe the only thing that should determine if a person gets a home loan is their credit history and ability to make payments, not their ethnicity, spoken accent, or skin color,” Jackson stressed.
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HUD is the nation’s housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. For more information about FHA products, please visit www.fha.gov.
