Bush Administration to End FHA Secure, Despite Calls for Continuation
One of the programs that many mortgage industry and related groups has been fairly happy with has been FHA Secure. FHA Secure is a program that the Bush Administration put into practice back in August of 2007 when the first hints of a massive subprime mess were starting to be taken seriously. (Warnings, of course, though ignored, had been issued way before August 2007.) FHA Secure, though not making a big difference to delinquent borrowers, is estimated to have helped 460,000 subprime borrowers refinance before going into foreclosure.
FHA Secure was meant only to last through the end of this year, but many are calling for it to continue through 2009. National Mortgage News Online reports on the calls for FHA Secure to continue:
“The expanded loan options offered by FHA Secure are an essential component of our collective efforts to help the largest possible numbers of at-risk borrowers,” according to a November letter signed by several trade groups. Under the program, FHA loosened its underwriting standards to allow borrowers with adjustable-rate mortgages to refinance into fixed-rate FHA mortgages.
The Bush Administration, however, is unmoved. Word is that the FHA Secure program will be ended on schedule.
Foreclosures down right now
Foreclosures are down right now, and many in the mortgage industry — and the Bush Administration — are contratulating themselves. However, this does not mean that things are on the road to improvement. Many mortgage lenders announced a foreclosure moratorium for the holiday season. Once that moratorium lifts, it is possible that foreclosures start mounting again at alarming rates.
The FHA Secure program may be an important part of the future of preventing foreclosures — if it is allowed to continue. The Bush Administration’s word is probably not the final say. After all, the new year will bring a new administration. It is possible that an Obama Administration would revive FHA secure, or provide a similar program.
