Besides casting defaulting mortgages to new 40 year loans, FHA is also cutting out 30% of the mortgage balance!
#Mortgagebailouts #housingmarketupdate #realestatenews
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The Federal Housing Authority (FHA) has come out with a new plan to help homeowners who are struggling to pay their mortgage. The plan, called “FHA Chops Defaulting Balances,” is a mortgage bailout program aimed at keeping people in their homes and avoiding foreclosures.
Under this plan, the FHA will reduce the amount of money owed by homeowners who are delinquent on their mortgage payments. The program will forgive up to 30% of the outstanding balance, allowing struggling homeowners to catch up on their payments and avoid foreclosure.
This is a major step forward for homeowners who have been hit hard by the economic downturn. Many people have lost their jobs, or have seen their hours cut back, making it difficult to keep up with their mortgage payments. The FHA Chops Defaulting Balances program offers a lifeline to these homeowners, giving them the support they need to keep their homes.
The FHA has stated that the program is aimed at homeowners who have suffered a financial hardship that has made it impossible for them to keep up with their mortgage payments. This includes people who have lost their jobs, suffered a serious illness, or who have experienced a significant reduction in their income. The program is not designed for people who simply don’t want to pay their mortgage or who have taken on more debt than they can handle.
One of the biggest benefits of the program is that it is open to all homeowners who have an FHA-insured mortgage. This means that even if your credit score has taken a hit, or you have equity in your home, you can still qualify for the program.
Another big advantage of the FHA Chops Defaulting Balances program is that it will not hurt your credit score. Unlike a foreclosure, which can stay on your credit report for up to 7 years, the program will not negatively impact your credit.
The program will also help to stabilize the housing market by reducing the number of foreclosures. When people lose their homes to foreclosure, it puts additional pressure on the housing market, reducing demand and driving down home prices. By helping homeowners to stay in their homes, the program is helping to stabilize the market and prevent further declines in home prices.
Overall, the FHA Chops Defaulting Balances program is a welcome relief for struggling homeowners. It offers a real solution to the problem of delinquent mortgage payments, giving homeowners the support they need to keep their homes and avoid foreclosure. If you are struggling with your mortgage, it is definitely worth looking into the program to see if you qualify.
40 year loan is a lifetime rental agreement!
We need to stop saving people and banks/creditors from their bad financial decisions. You teach them nothing and it interrupts the natural flow of financial cause and effect. And it punishes people with financial discipline. We get nothing from our financial restraint/discipline.
A few years ago HUD was selling some homes for half price to first responders and teachers. So unfair.
To think I signed up for Medicare two months late. I have to wait a year and will pay a penalty for the rest of my life. How is this even fair?
And them reducing loans won’t do anything to bring home prices down unfortunately.
Just keep kicking the can down the road. Great system (not).
Great video today TODD. This is the Reason I am not on the CRASH bandwagon. If Forebearances and modifications were not in place right now I would be MUCH MORE concerned about Housing prices. Your numbers are showing exactly what I have been saying for almost 2 years now. All the government money and bailouts have truly saved the Housing Market and this is exactly why I have also been saying that NO CRASH. As your panel confirmed yesterday there is still good DEMAND. But without NEW construction the market would be a complete mess. Here is what your last 2 days have confirmed
Strong demand in most parts of the US or at least from your panel from yesterday.
Without the bailouts and modifications, there would be over 1,000,000,000 probable additional homes on the market. That inventory alone would push prices down in some areas MUCH FURTHER DOWN.
Now your beginning to understand that this market is not just about JOBS.
Take care buddy and have a great weekend
So tired of bailouts, as someone who didn't make stupid choices it seems unreasonable
This is so disheartening.., it’s so unfair for qualified renters who can buy these homes at affordable prices which even the sellers would have paid few years back. They cannot be unfair to only one set of ppl. Rents need to come down
Sweet, I'm gonna go get a couple rental properties, immediately miss the first 3 payments and ask for a 30% discount and a 40 year modification. What a savings. Thanks government!
That’s a great option. You shouldn’t be so negative. We had the pandemic, then add inflation to the mix, having them reduce the loan 30% is a huge help. It helps the folks get back on their feet AND do some repairs if needed. That’s exactly the kind of help they need. It’s more than just postponing a few payments. That’s great help a lot of people need. It’s not kicking the can up the road. It’s how you look at it, glass half full or empty and you’re looking at it half empty.
FASB yield adjustment. In your scenario a 5.00% mortgage would become 2.12%
Ya but you know the banks can only do so much to help property owners.
They dont have a choice but to do this.
Mortgage modify by taking 30% off loan and putting at the back end at no interest sounds more like a loan with hefty balloon payment.
The Current Crises are Created by the Systems. The Way is to Restore the Systems to the Sound One with Equal Playing Field for All!
Home prices are obviously incredibly over inflated, and the government is doing everything they can to keep them that way. Powell even acknowledged that home prices were in a bubble due to Covid stimulus and low rates. He said by raising rates it was his goal to bring down home prices and bring back balance in the housing market. Well, they can't have it both ways. Providing all kinds of ridiculous support to keep people in their homes and try to bring down prices at the same time. They are creating a situation where nobody will ever want to sell their homes due to the low rates they have or the incentive programs they were given. This is so wrong.
This is insanity.
Renters have gotten so screwed. The govt just keeps bailing out anyone in a home, keeping the inventory off the market. What an absolute theft of the poor.
I'm starting to wonder if a US default on debt would actually work in favor of the responsible in society right now. Mortgage rates would rise. People with lots of revolving credit would be pinched very hard. But these are both things that actually are helpful to the responsible among us, because these things force false competition out of the market… Competition from people who have no business being in the market in the first place. This brings down prices, potentially a lot.
If not foreclosures then short sales for sure… one way or another it’s gonna crash
The black swan is coming