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Wednesday, September 29, 2010

Proposed bill would allow borrowers to sell equity for lower mortgage payments

This is a proposed pilot program by the FHA.  FHA is also has negative equity refinance program.  And they have a sub-prime program.  Remember these loans are insured by the US equal to 20% of the purchase or refinance price.
Under the proposed bill, all investments go toward the principal loan amount and may not be used for downpayment or closing costs. The mortgagor must retain at least 60% equity share. Additionally, borrowers must comply with all FHA requirements for homeownership including mandatory downpayment requirements.
Investors must be arm's length in order to qualify.
Read it all

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