August 15, 2013 FHA Mortgage change came into effect. The Mortgage Letter is called Back To Work. Here is a brief over view of the letter of help.
To give some help to borrowers who have experienced an Economic Event, that resulted in a severe reduction in income due to a job loss or other circumstances resulting in reduced Household Income.
FHA is evaluating borrowers who have experienced periods of financial difficulty due to extenuating circumstances. As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts.
Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:
certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;
the borrower has demonstrated full recovery from the event; and,
the borrower has completed housing counseling.Housing counseling is an important resource for both first-time home buyers and repeat home owners. The housing counseling enables borrowers to better understand their loan options and obligations, and assists borrowers in the creation and assessment of their household budget, accessing reliable information and resources, avoiding scams, and being better prepared for future financial shocks, among other benefits to the borrower.
Please visit the following web site for more details. http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/letters/mortgagee
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