The White House announced on April 9th 2008 that they are taking action to provide additional assistance for subprime homeowners where are at risk or have the potential to enter foreclosure. These new guidelines would give FHA much needed flexibility and allow many more people to take advantage of the FHAsecure program which was designed to help homeowners in the first place but had hard to meet guidelines. That is all about to change.

These new FHAsecure guidelines are expected to allow up to half a million Americans a alternative to foreclosure by the end of the year. The Assistant Secretary of House is quoted as saying: “We want to be able to help families who are in the right house, but (in) the wrong mortgage.” This is very true for many American households that are trying to make ends meet in there trying times. These new relaxed guidelines for the FHAsecure loan has the potential to change the lives of hundreds of thousands of homeowners.

To qualify for the new FHAsecure standards you must fall into one of the two following:

1. Homeowners with ARM mortgages that where late on two consecutive mortgage payments or at two different times over the last 12 months. These homeowners must at least have a 97% Loan to Value (LTV) in order to refinance into this program.
2. Homeowners with ARM mortgages that where late three consecutive mortgage payments or three different times over the last 12 months. Homeowners that where late three times must have a 90% Loan to Value ratio.

Lenders do have the option to write down the balance to either 97% and 90% respectfully to make FHAsecure refinancing more accessible to more people especially those with 100% LTV. It is encouraged that the banks take these write downs and refinance as many as they can into safe FHAsecure loans, it is however voluntary for the bank to take such a write down to make the loan ratios work. The actual refinance amount will be determined with a qualified FHA appraiser and the ratios are to be calculated with the appraisers findings.

On average people able to refinance into an FHAsecure loan save $400 a month compared to their subprime adjustable ARM mortgage. For many Americans a savings of $400 or more per month can make a very significant positive impact on that homeowners finances.

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