UPDATE: EFFECTIVE ON FHA CASE NUMBERS ISSUED AFTER DECEMBER 31, 2008, THIS PROGRAM IS NO LONGER AVAILABLE.
Since Mortgage Master Service Corporation has been a FHA endorsed lender since our inception, we are also approved for FHASecure. This program is designed to help home owners who after their non-FHA ARM resets, have become delinquent.
Here's more info:
- The mortgage being refinanced must be an adjustable rate mortgage that has adjusted (reset). The mortgage being paid off cannot be a FHA mortgage.
- The home owners mortgage payment 6 months prior to the reset must show no instances of making late mortgage payments.
- Missed mortgage payments may also be included in the new loan (subject to having enough available home equity).
- The reset of the non-FHA ARM monthly payment must be what caused the home owners inability to make their monthly payments.
- The home owner needs to qualify for the new FHA mortgage (have sufficient income and resources per FHA guidelines).
- Loan amounts are subject to current FHA Loan Limits
- Subordinate financing (non-FHA second mortgage) is allowed if the new FHA loan is not enough to pay off the existing first lien, closing costs and arrearages.
- Expanded loan to values up to 97.75%.
- Payment-to-income-ratio and debt-to-income-ratios remain at 31/43.
- FHA upfront and monthly mortgage insurance applies.
- Loan applications must be signed no later than December 31, 2008.
This program is not intended for home owners to stop making their mortgage payments once their ARM adjusts. In fact, this is straight from the HUD Mortgagee Letter 2007-11:
"FHA reserves the right to reject for insurance those mortgage applications where it appears that a loan officer or other mortgage employee suggested that the homeowner could stop making their payments…"
I'm pleased to be able to offer this program and thankful that Mortgage Master has maintained their status as a HUD Approved Mortgagee.
The best option is to refinance prior to your ARM adjusting (before you're delinquent). As always, I suggest that you contact your Mortgage Professional if your ARM is scheduled to adjust within two years or less in order to make sure you're in the best position possible to refinance.