Adjustable Rate Mortgages and Option ARM’s Continue To Fuel the Foreclosure Fiasco
The glory days aren’t that far behind us, we can all remember the ads on the television, radio and internet offering ridiculously low “teaser” rates that made huge homes affordable to the masses—however briefly. From the not too distant past the memories of loan applications with very few questions linger, now tainted with the realization of the validity of age old guidelines. 
The temptation to participate in programs that were clearly doomed to fail was magnified by the seemingly endless availability of price appreciation and the consideration that if the payment became a problem homes could be sold quickly and for a profit. Well, of course we know now. The damage has been done. The gains are gone but the mortgages remain.
Many people have been holding on, doing the best they can as the economy crumbles beneath. Unfortunately, the specter of a large rate hike of an Adjustable Rate Mortgage or a “recast” of a teaser rate based payment to a much higher payment makes the near future look bleak. What to do?
In Virtually All Cases Taking Action Can Help You Avoid or at a Minimum Postpone Foreclosure
Let’s focus on one specific program; The FHA Secure option.
FHA Secure is a refinancing option for both FHA and Conventional mortgages that are at risk of foreclosure because of the borrower’s inability to make payments due to the “Payment Shock” of a ARM adjustment or a recast. It is designed to help those about to be in default and those who are already in default and will assist families who have missed up to three monthly payments over the last twelve months.
The long and short of the plan is that it provides a way to refinance to a lower rate and payment with the added benefit of overlooking some recent delinquency.
FHA Secure can be a great program for you if you have tried to refinance out of your existing ARM, Balloon mortgage or other subprime product but have been declined due to a late or skipped payment.
For more information about the FHA Secure program take a look at the Official FHA Secure page on the FHA site.
I love the availability of video online and this link does a pretty good job of answering questions about who is and who isn’t eligible for the FHA Secure program.
Video Explanation from FHA about FHA Secure
In summary now we’ve covered two ways on How To Avoid Foreclosure:
1.) HOPE for Homeowners also known as H4H.
2.)FHA Secure
Next I’ll cover how you can negotiate a Loan Modification or a Special Forbearance with your existing lender and add more facts to my earlier post about Short Sales—which was revealing the Buyer’s experience and I’ll explain more about how a Seller can do a short sale and it’s impact versus other options to avoiding foreclosure.
