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HUD News Release :
More than 36,500 families have been able to stay in their homes and avoid foreclosure this year thanks to the U.S. Department of Housing and Urban Development's Federal Housing Administration (FHA) comprehensive lending relief measures.
The FHA's Loss Mitigation Program gives lenders who provide FHA-insured mortgages the authority and responsibility to assist homeowners who have fallen into financial difficulties with their home mortgages.
Special Forbearance: This option can include a temporary reduction or suspension of a mortgage payment until the borrower can reestablish financial stability, or a permanent revision in the payment amount to reflect a borrower's new and reduced financial status.
Modifications: The lender can rewrite the mortgage note in order to roll delinquent amounts into the principal or extend the term of the loan to reduce monthly payments.
Partial Claim: FHA's insurance fund makes a one-time payment to bring the mortgage current, which becomes an interest-free subordinate mortgage due when the insurance is terminated.
Created in 1934 to stimulate the housing market during the depression, the FHA has since helped more than 34 million first-time, minority, and low-income families who do not qualify on their own for prime mortgages to become homeowners.
But as lending practices have evolved and modernized, the FHA has not had the ability, without Congressional legislation, to adapt to the new marketplace and become a viable alternative to subprime loan products.
To maximize the FHA's ability to help families purchase and keep their homes, Secretary Jackson continues to urge Congress to quickly pass legislation that updates the FHA's mortgage programs and makes affordable homeownership opportunities available to more Americans.
Posted on April 12, 2007 10:34 PM
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