Monday, November 12, 2012

FHA Foreclosure Recovery

In the past it was standard for people to wait seven years after a foreclosure to buy a home. This is no longer the case. While mortgage lenders Fannie Mae and Freddie Mac still require a seven year waiting period the Federal Housing Administration will back a mortgage after three. They require that the buyer has established good credit and the ability to pay their mortgage in this time.
The Federal Housing Administration insures home loans so that banks have the ability to be more flexible. It allows them the ability to provide loans with lower down payments and a wider variety of income requirements. In 1934 the FHA was created in an attempt to revive the housing market.

For those who can qualify an FHA loan is a good option. While the FHA does not does not provide data on the number of loans which involve people who are buying following a foreclosure or short sale some statistics can be derived from other lenders. Wells Fargo is the country’s largest FHA loan originator and servicer. According to their spokesman they have provided more than $73 billion in FHA-backed loans during the first six months of the year. This is in stark comparison to the $47 billion that was provided in the entire twelve month period of 2011.

While some may complain that an FHA loan takes more work and time it may be the answer for those who would otherwise have to wait seven years to reenter homeownership.

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Ruben Garmyn & Jim Birtola
Team Birtola - Garmyn, Oregon's #1 Real Estate Team
Prudential High Desert Realty
Bend, OR 

Office: 541-312-9449

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