Is The Public Really “Confused” About FHASecure Mortgages?
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HUD was supposed to help borrowers with toxic loans. After all, President Bush said the FHASecure program “will allow American homeowners who have got good credit history but cannot afford their current payments to refinance into FHA-insured mortgages.”
HUD, however, has redefined the mission. It now says that its FHASecure information has been “modified to reflect that the term FHASecure applies to all conventional to FHA refinance transactions. The previous edition of FAQs indicated that only those borrowers who were delinquent due to the reset of their non-FHA ARMs were eligible for FHASecure, causing confusion in the industry.”
Nonsense. Was the President confused? Was the original HUD material incoherent? Was former HUD Secretary Alphonso Jackson mixed-up when he testified before Congress that the FHASecure program was for “borrowers who are otherwise creditworthy, but have recently become delinquent on their mortgages as their teaser rates reset.”
Here’s the real problem: The FHASecure program is a flop. HUD’s own figures plainly show that in fiscal 2008 about 5,000 delinquent conventional mortgages are expected to be refinanced with FHA mortgages. What does a bureaucracy do when it’s off-target? It redefines the problem. It makes up new definitions. It says there’s been confusion.
What HUD ought to say is that “we can do better. It’s early in the program, it takes time to get such a massive effort underway and we’ll do more to reach families facing foreclosure.”
Everyone understands that no single program can resolve the foreclosure meltdown and that HUD has a difficult task. Everyone wants HUD to succeed because it would be good for the country. That’s fair — and there’s no “confusion” about it.
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Published originally by Realty Times on January 16, 2008 and posted with permission.
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