Foreclosure Resolution Blog

I’ve written previously about the flaws in the proposed foreclosure legislation, but now that the differences in the Senate and House bills are narrowing, I wanted to focus on an important consideration- this legislation could actually cause more foreclosures.

Here’s how:

 The House version of the bill allows FHA to continue to insure mortgages that involve down payment assistance for borrowers. FHA Commissioner Brian Montgomery recently stated that borrowers using seller-funded down payment assistance are three times more likely to default than those who provide their own down payment.

So, if the goal here is foreclosure prevention, as the name of the bill says, then this provision should be eliminated.

However, in the name of “expanding the American Dream,” I wonder if this measure will survive.

One other thing… while in the aforementioned speech, Mr. Montgomery proudly mentions FHA’s extensive loss mitigation efforts.

However, I am finding that certain large, national mortgage servicers are NOT offering the full range of options to borrowers who are trying to avoid foreclosure.

Meanwhile, I’m hearing from plenty of FHA borrowers who are being treated like they’re sub-prime. If you are behind on payments on an FHA mortgage and you don’t feel like your situation is being handled properly, contact my office immediately: 

If you enjoyed this post, make sure you subscribe to my RSS feed!

This entry was posted on Thursday, July 17th, 2008 at 3:19 am and is filed under Avoid Foreclosure, foreclosure legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.