HUD: Bush Administration Helping Families Keep Their Homes
The Bush Administration's foreclosure prevention initiatives are helping more families keep their homes, U.S. Housing and Urban Development Secretary Alphonso Jackson said recently at the Mortgage Bankers Association 94th Annual Convention. Jackson highlighted several programs and proposals that the Administration has put forward to help struggling homeowners who have been caught up in the subprime wave.
"Our actions now to fix the housing market will benefit Americans for generations to come. This will help make our economy stronger and assist the world economy. But, most importantly, it will give millions of people a chance at wealth creation, financial security, and a place to raise their children in love and safety," Jackson said during his address to more than 4,300 representatives of the housing industry at the MBA Convention.
On August 31, President Bush announced several new steps to help American families keep their homes, including a new foreclosure avoidance initiative called FHASecure. Administered by HUD's Federal Housing Administration (FHA), this mortgage insurance program is geared toward borrowers who have good credit, but who may not have made all of their payments on time because of resetting interest rates. For the first time, FHA is able to offer many of these homeowners an affordable option to refinance their existing mortgage so they can make their payments and keep their homes. This change, in addition to other existing FHA products, will bring the total number of families FHA projects to help next fiscal year to approximately 240,000.
"Families with an otherwise strong credit history, but in default because of the reset in their mortgage rate, can get help through FHASecure. These are people who would have lost their homes without efforts to provide affordable refinancing options," Jackson added.
Jackson also said he and President Bush continue to call on Congress to pass FHA modernization legislation. The Administration's FHA modernization proposal, which was first sent to Congress in April 2006, would lower downpayment requirements, allows FHA to insure loans in higher cost areas, and give FHA more pricing flexibility. These reforms would empower FHA to reach 200,000 more families next year that need help - first-time homebuyers, minorities, and those with low-to-moderate incomes. The House has overwhelmingly approved the bipartisan legislation, and it is hoped that the full Senate will act soon.
"The President wants FHA to continue to help bring stability to the real estate market - the reason it was formed nearly 75 years ago. FHA can help break the cycle of foreclosure and price depreciation, and bring much-needed liquidity to a mortgage market that has quickly become constricted. Each day of delay unnecessarily places thousands of families at risk of foreclosure," Jackson said.
Recognizing that buying a house can be a daunting and confusing process, HUD has 2,300 approved housing counselors in the United States. The Administration has increased funding for housing counseling by 200 percent since 2001, Jackson said. Earlier this month, HUD announced more than $44 million in new housing counseling grants to over 400 state and local efforts.
"Consumers must be educated. Often homeowners don't carefully read their contracts; some don't read them at all. The key is to be able to read and understand the fine print, and also to know when to ask for help. The President wants even more money for housing counseling, asking for some $50 million in his new budget," Jackson emphasized.
Finally, over the past six weeks, Secretary Jackson and Treasury Secretary Henry Paulson have reached out to a wide variety of groups that offer foreclosure prevention, counseling, and refinancing assistance for homeowners. Last week, Jackson and Paulson announced HOPE NOW - a private sector alliance to help more Americans keep their homes. This partnership, which includes the largest mortgage servicers, leading housing counselors, investors, and large trade organizations, will expand mortgage financing options, identify homeowners before they face hardships, help them understand their financing options, and allow them to find a mortgage product that works for them.
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