Ascent Home Loans

In hopes of curtailing the the increasing problems that have developed within the sub-prime market, the Federal Housing Administration and the Bush Administration have developed a plan that would help a number of families stave off foreclosure. However, with all the conflicting news stories reported each and every day about the mortgage industry, I thought I would provide those borrowers with a clearer picture of what the FHASecure program is and who it will provide assistance too.

In truth, FHASecure is not a new plan, but a supplemental plan developed to be added onto the original FHA loan program. FHASecure is for those families who got caught up in an adjustable loan with a teaser rate. We have all seen those advertised, the types of loans that begin with a 1 1/2 or 2 1/2% interest rate and then proceed to reset higher until those borrowers rates have jumped to 7 to 9 %. The sad part is most of those families are hard working honest people with good credit that are now looking to lose their homes because they cannot afford their monthly payments.

How Do I Know If I’m Eligible For An FHASecure Loan?

With the new FHASecure program, there have been some additions to the underwriting guidelines that are still in effect as if a borrower were applying for a standard FHA loan. The new additions are as follows.

• First, you must have a non-FHA adjustable rate mortgage. Fixed rate and interest-only fixed rate mortgages are not eligible. However, if your loan is an interest-only adjustable rate mortgage, you are eligible for this program.
• FHASecure is designed for borrowers who are delinquent. If you are current with your mortgage payment, you may apply for a standard FHA refinance.
• A history of on-time mortgage payments before the borrower’s teaser rates expired and the loan reset. If you were late within 6 months prior to the reset, you are not eligible for the program.
• Interest rates must have or will reset between June 2005 and December 2009.
• The borrower has 3% cash or equity in the home.
• A sustained history of employment and sufficient income to make the mortgage payment.
• If you have late payments after the reset you are still eligible. There are no limits to the amount of late payments, however the amount you can refinance depends on the value of your property. You may have to acquire a second mortgage to help bridge the gap between what is owed and your homes current value.

What Documentation Will Be Needed To Apply For An FHASecure Loan?

Since the borrower is in fact applying for an FHA loan, standard documentation will be required by your lender.

• One full month’s worth of pay stubs showing year to date earnings.
• Previous 2 years W-2’s.
• For self-employed borrowers, last 2 years tax returns with all schedules.
• Copies of social security, pension and or retirement award letters.
• Most recent 2 months bank statements for all accounts. Must include all pages.
• Copy of bankruptcy and discharge papers. Copy of divorce decree.
• Copy of Drivers License and Social Security Cards.
• Copy of Homeowners Insurance.

Please remember that you must check with your lender what your county’s current maximum FHA loan limits are. They can differ dramatically between each county. Although this program is a start to helping struggling homeowners, it falls short in helping in many high cost states. For instance, the average median home values in California are much higher than the current FHA loan maximums, making this program unavailable to many Californians. However, both the Congress and the Senate are currently working out a change in the those limits to accommodate higher priced areas in the country such as California, Arizona and Nevada.