The government will announce Thursday that loans backed by the Federal Housing Administration will be qualified for payment reductions comparable to the Obama administration's loan modification program. Thus helping residents with their Florida foreclosures and Miami real estate properties.
Financially troubled homeowners who have an FHA-insured loan can apply for a adjustment under a program parallel to "Making Home Affordable" to help lower their payments and possibly avoid Florida foreclosure on their Miami real estate property. This will be effective on August 15.
Although only about 200,000 have been helped so far, this program which was launched in March is designed to lower monthly payments for 3 million to 4 million borrowers. Lenders agreed this week to adjust 500,000 loans by November 1st.
The FHA is a government-run mortgage insurance program, which backs about 5 million loans. It became the main source of home loans to borrowers with poor credit and low down payments after the fall down of the subprime lending market.
The agency allows borrowers take out home loans with down payments as low as 3.5%, compared with 20% for a typical loan that doesn't require mortgage insurance.
FHA cannot offer borrowers interest rates as low as 2% by law, which is available under the Obama plan. The FHA instead will allow lenders to set aside up to 30% of the total principal balance until the house is sold or the property is refinanced. No interest will be charged on that amount.
When asked, Government officials did not have an estimate of how many borrowers would qualify.
Housing and Urban Development Secretary Shaun Donovan said in a statement, "We're bringing another important tool to the table to help struggling families who are desperate to keep their homes.".
Lenders who participate in the FHA program will can be reimbursed for $250 in costs and will receive an incentive fee of up to $1,250.
Contributed by MLR Realty
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