The Federal Housing Administration: Possible Assistance for those facing Foreclosure?

The Federal Housing Administration (a little known federal mortgage insurer) is suddenly finding itself in the limelight as the pressure of foreclosure, especially for moderate income homeowners, continues to build across the country. President Bush and Treasury Secretary Henry Paulson are getting behind proposals to enhance the ability of the Federal Housing Administration to more actively assist those facing foreclosure. The administration is looking to FHA to offer refinancing options to homeowners, including those who aren’t yet in default or foreclosure, but who are at risk of falling behind in their payments. As you can imagine, there is plenty of enthusiasm in Congress for this approach as well. It’s highly probable that FHA reform measures will take center-stage when Congress returns from the August recess. What kind of reform is needed? Current FHA guidelines restrict the agency from being more pro-active due to limits on the size of the loans it can insure as well as specific requirements that borrowers must meet to be eligible for assistance. The idea is to loosen current FHA restrictions and provide additional tools so the agency can be more responsive to current residential market conditions. The Las Vegas real estate market is certainly no stranger to the current spike in foreclosures nationwide. This blog will be monitoring future FHA developments closely and we’ll let you know how it goes.

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