How Can The Government Provide Help For Homeowners With Distressed Mortgages

Before, homeowners with distressed mortgage often fail to qualify for various federal loan modification programs. Thus, they are left to endure the foreclosure process by themselves lacking the help that they deserve. Now, there is government help for homeowners that concentrates on providing mortgage refinancing opportunities to some qualified distressed borrowers. The US Federal Housing Administration (FHA) has been providing distressed non-FHA homeowners opportunities to qualify for a new FHA-insured loan since September this year. Applicants must only make sure that their loans are current and that their lenders agree to write off approximately 10 percent of the remaining balance of their first mortgage. This program was initiated by the U.S. Department of Housing and Urban Development in a hope to help American borrowers who owe more than what their homes are worth.

This program for distressed homeowners is called The FHA Short Refinance which aims to help not only the American borrowers in distress but the housing market as well. There has been a significant decline of home values since the beginning of the subprime mortgage crisis and the government has to do something in order to halt this alarming trend to put the whole US economy in shape once again. Hopefully through this new help for homeowners, the struggling real estate industry will soon recover by the end of 2012. The US Federal Housing Administration Commissioner David H. Stevens stated that the program will help beat the negative equity problems of many homeowners thus; providing borrowers a safer and more secure mortgage.

In order to apply, borrowers must first meet these standard requirements;

Home with which he or she is seeking to refinance must be his or her primary residence. It must be done voluntarily. Furthermore, the lien holder must consent with the said request. Homeowner's credit score must be equal to or greater than 500. Borrower's mortgage lender must agree to write off at least 10 percent of the outstanding balance. The remaining balance must be more than what the home is currently worth in the market. Lastly, your servicer must have accomplished a Servicer Participation Agreement or SPA with Fannie Mae.

If you are a "distressed" homeowner, there is hope for you! Save your precious home and apply for the FHA Short Refinance Program. This government help for homeowners has just been approved by the Obama administration this year and is available for use to all qualified distressed borrowers.