Our nation is mired in a housing crisis created by poor management of home mortgages. Because of this crisis many Iowa families are currently struggling to keep the homes they worked so hard to buy and maintain.
USA Today reports that, “Foreclosure rates for homes purchased using non-standard, high-interest loans have reached historic highs in Iowa and around the USA.” And according to some housing experts, we still have yet to see the worst of this crisis. It is estimated that 2.5 million homeowners will face rapidly rising mortgage payments in the next 18 months and these increases are expected to send approximately 1.5 million subprime borrowers into foreclosure. For the rest of us, the National Association of Realtors reported a 12.8 percent drop in home sales in 2007, and expects home prices to plummet 6.1 percent in the first quarter of this year.
It is extremely important to me that those involved in the mortgage industry do everything that can be done to help Iowa families keep their homes. I would like to highlight a couple of resources available to help Iowa homeowners.
· FHA Secure. FHA Secure is a new loan service that allows qualified borrowers to obtain the Federal Housing Authority’s mortgage insurance, even if they have recently become delinquent, as long as they have maintained a good credit rating. More information on FHA Secure, and a number of tips on steps consumers can take to avoid foreclosure and keep their homes, can be found at: www.fha.gov or by calling: 1-800-CALL-FHA (800-225-5342).
· HOPE NOW. Hope Now is a public-private partnership that has been set up to provide relief to borrowers in one of three ways: by refinancing an existing loan into a new private mortgage, by moving them into an FHA Secure loan, or by freezing their current interest rate for five years. Hope Now has also worked with the U.S. Treasury to initiate Project Lifeline, a plan that freezes the foreclosure process for 30 days while the mortgage is renegotiated or refinanced. Most major banks have agreed to abide by the plan to lessen the impact of these mortgages. Your lender or credit counselor should be able to provide additional information on the Hope Now options available to you, or you can contact a HUD approved credit counselor toll-free at: 1-888-995-HOPE (4673).
· Iowa Mortgage Foreclosure Hotline. This is a project that helps borrowers and lenders modify loan terms so that borrowers can make payments—and keep their homes. Assistance for this service can be sought by calling toll-free: 1-877-622-4866.
The best advice you can take if you are having difficulty making your mortgage payments is to call your lender, or one of the above mortgage-assistance hotlines, immediately. Simply making the phone call will improve your chances of being able to keep your home and avoid foreclosure.
I will continue to work with federal and state agencies over the coming months to find help for Iowa families during this crisis because I believe that it is our duty to work together and offer a helping hand to our neighbors in need.