On November 19, the Federal Housing Administration (FHA) took a huge step forward to aid troubled borrowers, relaxing program rules for homeowners who wish to qualify for relief under FHA’s Hope for Homeowners program – which was launched October 1 as part of the Housing and Economic Recovery Act of 2008. The changes, which will take effect in the next few weeks, should make it easier for borrowers to refinance into more affordable fixed-rate, government-backed mortgages. To be eligible for the program, borrowers must prove that they cannot afford their current loan, that they have made at least six payments on it and that they have not intentionally missed a payment, among other requirements.
To date, the Hope for Homeowners program has only received 111 applications from distressed homeowners – far less than the 13,000 people the program was intended to help. Steven C. Preston, secretary of housing and urban development, stated in speech last Wednesday that the new rules are intended to encourage more homeowners to apply for aid.
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