FHA

Due to the Subprime Mortgage Crisis that reared its angry head in 2007, thousands have already lost their homes to foreclosures. With the economic crisis worsening, more will surely follow. Concerned homeowners should know that President Obama is taking swift action to prevent more foreclosures.

Before President Obama even took office, lawmakers granted the President the second half of the original $700 Billion Asset Relief Program. A good portion of which must be earmarked towards preventing future foreclosures. Larry Summers, a leading economist, who will be aiding the new Administration, assured Democratic leaders in the House and Senate that $50 billion to $100 billion would be used to conduct, " a sweeping effort to address the foreclosure crisis."

No precise details on how that money will be allocated have emerged, the new administration wants to get individuals into new, lower-risk mortgages with a reduction in monthly payments very quickly. Industry insiders speculate that President Obama wants to change to a current loan-modification system so that it is a more time-efficient process, by drafting blanket rules for the procedure.

If you cannot wait for President Obama's revisions to take affect, last year the government launched the FHA Secure program introduced by the Department of Housing and Urban Development (HUD) that you could look into. If you are a delinquent homeowner who meets the HUD qualifications, you may be able to refinance your way out of an adjusted rate mortgage and into FHA-insured loans.

Now, if you are already facing foreclosure you should know that your first line of defense should be to call your lender to see if they are willing to renegotiate your terms. Additionally, calling a nonprofit counseling agency can point you in the right direction for mortgage salvation.

Have you made progress avoiding foreclosure? Please share your foreclosure prevention experiences in our comments section.

An underwater mortgage can be a nightmare for responsible homeowners. There's nothing pretty about the prospect of owing your lender more than what your house is worth. According to a recent CNN report, nearly 8 million households are currently contending with this problem [update: as of August, that number has soared to 15.2 million underwater mortgages ] and many are walking away. But while leaving your mortgage behind may be a temptation, you might want to consider other options first. There are some programs available that may help you stay afloat.

FHA Programs for Underwater Mortgages
There are currently two FHA-run programs that may help homeowners save their underwater mortgage:

1) FHA Secure offers subprime borrowers holding non-FHA mortgages the option of refinancing into FHA-insured ones (with lower monthly payments) as long as the loans are in good standing and the borrowers have sufficient income to make payments.

2) Hope for Homeowners (H4H) also keeps borrowers in their homes by allowing them to refinance into fixed-rate loans. To receive help, borrowers' mortgages must have originated on or before January 1, 2008 and their monthly payments must exceed 31 percent of their income.

Streamlined Modification Program
If you are at least 90 days delinquent in your monthly payments, then Congress' Streamlined Modification Program might be able to help. This program reduces your interest rates and/or stretches out your loan terms to make your payments more affordable. The catch, however, is that homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac will likely receive preferential treatment. To apply for the Streamlined Modification Program, you need to contact your current lender.

Remember, these programs do have specific eligibility requirements, so if you have an underwater mortgage but don't qualify, don't let that deter you. Try talking to your lender on your own. You may be able to refinance your loan at a lower interest rate, making your payments much more affordable.

One thing that may help first time buyers overcome the obstacle of securing a loan is through a FHA Fixed Rate Loan , courtesy of the Homes and Communities - U.S. Department of Housing and Urban Development (HUD).

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