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Owning a home has always been at the center of the American Dream. For many homeowners, however, that dream is threatened by foreclosure. An estimated 240,000 families can avoid foreclosure by refinancing their mortgages using the new FHASecure plan. FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing.
A HUD statement released today noted that more than 33,000 borrowers have already refinanced out of their subprime loans with FHASecure, the HUD’s new government-backed refinance loan program.
“FHASecure is providing tens of thousands of families with a powerful incentive to obtain affordable and safe home loans,” HUD Secretary Alphonso Jackson said during his speech at the Office of Thrift Supervision’s National Housing Forum.
“Homeowners finally have an opportunity to save their American Dream without risking their financial future, and they’re taking advantage of it everyday.”
Another 20,000 FHASecure loans are in the pipeline to be approved this month, keeping the FHA on track to hit its goal of 240,000 FHASecure loans in Fiscal Year 2008.
Since the FHASecure was released in September, the FHA has received more than 113,000 refinance applications from both current and delinquent borrowers, meaning nearly half of those who applied have either successfully refinanced or are set to be approved.
Jackson also called on the Senate to approve FHA legislation so another 200,000 borrowers could benefit from the FHA’s flexible financing options.
“Each day of delay by the Congress unnecessarily places thousands of families at risk of foreclosure. These families are in danger of losing their homes. Think of what this means to them,” Jackson added.
FHA refinancing has increased 125% over the past year, with more growth expected next year as government-backed loans continue to gain in popularity.
In a previous news release, Jackson noted that the average subprime borrower who refinances with a FHASecure will save $400 a month, or $30,000 over the life of the loan.
