The story states, "Brian D. Montgomery, the F.H.A. commissioner, attributed the unanticipated losses primarily to the agency's seller-financed down payment mortgage program, which has suffered from high delinquency and foreclosure rates in recent years.
Housing officials said the agency was also hurt by poor performance in its traditional mortgage portfolio. Deteriorating economic conditions led some of its core clients ? first-time buyers, minorities and lower-income owners ? to default, they said."
The article goes on to state that the seller-financed down payment program, which was responsible for 35 percent of its loans in 2007, is the root of the most losses.
This has resulted in the fact that, the F.H.A. commissioner, Brian D. Montgomery, wants to put an end to the seller-financed down payment program.
Mr. Montgomery states, "The mortgages had foreclosure rates three times those of traditional loans and would push the F.H.A. to the brink of insolvency."
Mr. Montgomery revealed that the FHA is planning to reopen the comment period on a proposed rule to the Federal Register that would end the popular program. However, the F.H.A. has tried to eliminate seller-financed down payment loans for several years, and it's anyone's guess whether it will be successful now.
Supporters of the loans, which includes some very powerful members of Congress, are determined that the program provides much-needed assistance to low-income and minority families who would not be able to buy homes in any other way.
Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, remains steadfastly opposed to any F.H.A. rule that would discontinue the program. Regardless of whether Mr. Montgomery gets his way, or whether Mr. Frank's desire prevails, thankfully there are other forms of down payment assistance available for first time home buyers besides seller-financed loans.
Down Payment Assistance Program
Do you find yourself unable to purchase a home due to the lack of money for a down payment? Unfortunately, many people are currently in this same situation. Many people often stop the pursuit of home buying once they discover the amount they will need for a down payment. However, if you do not have the necessary down payment to purchase your home, you will find there are many down payment assistance programs available to help you achieve your goal of being a home owner.
Prior to October 1, 2008, those who took out a FHA loan were able to have the seller contribute funds towards the down payment. However, on October 1, 2008, a new law went into effect that prevents the seller from contributing any money toward the down payment on a loan or closing costs on any loan that is funded by the FHA. This made it more difficult for buyers who lacked the funds for a down payment. The many changes to the economy also have made an impact on home buyers as many loan companies are now requiring as much as a twenty-percent down payment.
With more and more people struggling to make ends meet, buyers are having difficulty coming up with the down payment to purchase their own home. Many people often pursue home ownership, only to find the down payment is holding them back. With the downslide of the housing market, the government responded to the need and there has been an increase in the amount of down payment assistance programs that are available to the home buyer.
The largest benefit to going through a down payment assistance program is the money will not have to be paid back. Basically, these are grant programs that have been funded by the government to help with both urban development and the stabilization of home prices. When you receive the money to assist you with a down payment, you will not have to worry about paying back a second loan. This money is yours to be used for your down payment and you will not have to struggle to pay it back.
You will also find that the qualification process is quite simple. Your credit score and income level may not be a determining factor in whether you receive the down payment assistance. The most important qualification may simply be the area in which you are purchasing your new home and it may be the only determination of whether or not you qualify for assistance.
While more and more people may be having difficulty coming up with a down payment on the home they wish to purchase, there has been an increase of the funds available to assist them. However, many people do not even know of the down payment assistance programs that are available to them. If you are struggling to come up with a down payment on your home, be diligent in your research on home mortgage grants in your area and you may be surprised by what you discover is available to you.
Both Jennifer Stromsteen & Gen Wright are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jennifer Stromsteen has sinced written about articles on various topics from Real Estate, Brain and Anger Control. J Stromsteen has many years experience in the finance, real estate, and insurance industry. She writes for the website where you can find. Jennifer Stromsteen's top article generates over 74000 views. to your Favourites.
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