Monday, May 19, 2008

FHA Secure Loan: Government Foreclosure Help Not Turning Out As Expected

Several months ago the Bush administration came up with a great plan to fix the foreclosure problems plaguing the U.S.: The FHA Secure Loan. This loan was to be made available to homeowners who were having, or had, their variable interest rates adjusted and needed to refinance in order to keep making payments. So just how many people has the FHA Secure program helped avoid foreclosure since its inception? Try 3,000, according to an article from CNNMoney.

Though only 3,000 people have been saved from foreclosure, the FHA Secure program has become widely popular, with over 200,000 loans issued to date according to CNNMoney. While the program was meant to help people avoid foreclosure it has turned out to be a great program for people looking to refinance. The average homeowner refinancing with an FHA Secure loan is saving approximately $400 a month, according to the article.

Many of the people using the FHA Secure program could continue to make their payments without a problem, and additionally many of them even had other options for refinancing out of their existing mortgages. For a program that was meant to help prevent foreclosure, I’m just not sure how effective it is. It is certainly helping people save money, but when the time comes that the government has to start coming good on these guarantees, taxpayers are going to have to foot the bill. Lending out at high LTVs to high risk homeowners is not appealing to banks for a reason, so if we think we are going to avoid having to pay up when all is said and done, we are sadly mistaken.

In my mind if the government is trying to help those who are on the ropes (which I didn’t agree with in the first place), then they can do that, but they shouldn't also offer up resources to those who have other options. This program should be reserved for those who have nowhere else to turn, not those who are just looking to save 0.25 points over what the bank’s other loan program will offer them. Taxpayers shouldn’t have to front the bill when there are others willing and able to do so.


Anonymous said...

You are so right, we should be diverting all available funds to Iraq.

Who really cares if the housing market completely collapses and brings our fragile economy down with it anayway.

Anonymous said...

Well I was facing foreclosure, and thought it was no hope, until I met this lady online name Callie Thompson and she saved my house, it took about 6 month. I kept my home got a better
interest rate and now I am slowly starting to get back on track with my
life. Her email is so I hope that helps. Now, if we can some how get a grip on the gas prices!

fha secure loans advocate said...

The financial crisis has practically swept the entire world, affecting both large and small economies. The American economy has not been spared from the battering, and it has inevitably shown in the rising unemployment rate, and as a consequence, the number of people getting further buried in debt and losing their houses to foreclosure increases.

secured loan said...

Secured loans are easier to obtain than an unsecured loan because the secured loan lender has the added benefit of security which provides protection. This also means that individuals who are self employed, have a new job or who have very bad credit can still take out a secured loan