Interesting FHA & Mortgage News

The Federal Housing Finance Regulatory Reform Act of 2008 Senators Chris Dodd of Connecticut and Richard Shelby of Alabama announced a 19-2 passage of “The Federal Housing Finance Regulatory Reform Act of 2008”. The new act includes extra effort to help stem the foreclosure crisis and to reform regulations of Fannie Mae, Freddie Mac and the Federal Home Loan Bank system. In order to help stem the foreclosure crisis, the Federal Housing Administration would be allowed to insure up to $300 billion in new loans for at risk borrowers if the lender agrees to forgive current mortgage balances that are more than 90 percent of the current home value. The 10 percent of equity, on the new FHA loan, would be given to the homeowner and must be shared with the government when the homeowner refinances or sells the home. To qualify for the FHA program the borrower must occupy the property as their primary residence and have a debt to income ratio of greater than 31 percent. If the homeowner currently has a second mortgage, the lender must agree to forgive the entire debt. According to Senator Dodd, the new program could benefit an estimated 500,000 homeowners.

The Federal Housing Finance Regulatory Reform Act of 2008