RISMEDIA, April 11, 2007-In light of the many families being affected by negative subprime mortgages, the National Association of Realtors(R) encouraged the Department of Housing and Urban Development to act quickly to change the FHA mortgage insurance program to enable more homeowners and their families to keep their homes.
In a letter sent to HUD Secretary Alphonso Jackson, NAR President Pat Vredevoogd Combs strongly urged action by HUD to change FHA rules and waive the requirement that a homeowner's mortgage be "current" in order to refinance into an FHA loan product.
"Many homeowners who were able to make timely payments under the original terms of their loan are finding it difficult to make payments after rate adjustments," said Combs. "We believe FHA can design a mechanism where credit worthy borrowers could refinance subject to prudent guidelines, and therefore avoid losing their homes."
"As the nation's leading advocate for homeownership, NAR believes that all avenues should be reviewed and that paradigms should be shifted. The goal for all-government, lenders, banks, individuals, and Realtors-should be to help keep people in their homes and to avoid or minimize foreclosures," Combs said earlier this month.
In recent days, it has been reported that various lenders have expressed a willingness to engage in this program to avoid costly foreclosure proceedings. This would not be a bailout for lenders, but would be a vehicle for helping prevent a number of Americans from losing their homes. "NAR believes in a strong FHA and would support efforts to ensure that only borrowers who truly have the capacity to repay receive the opportunity to refinance under such changes," said Combs.
NAR encouraged HUD and the FHA to undertake a "robust public education campaign" to promote foreclosure prevention by raising the awareness of FHA and HUD programs. NAR has partnered with HUD and FHA in the past to create and distribute brochures designed to inform potential home buyers about the various FHA programs. NAR also continues to be a consistent advocate for FHA modernization, so as to keep the products and services they offer pertinent to today's consumers and housing market.
"We believe that with some minor regulatory adjustments to the FHA program that a significant subset of borrowers facing the prospect of foreclosure could safely refinance into an FHA mortgage. We are committed to continue our efforts with HUD and FHA. We not only want to see people achieve the American dream of homeownership, but also we want them to keep it," said Combs.
For more information, visit http://www.realtor.org.
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