Fortunately, the government recognized this problem last August. During a speech in Phoenix, President Barack Obama said, “We should give well-qualified Americans who lost their jobs during the crisis a fair chance to get a loan if they’ve worked hard to repair their credit.”
The “Back to Work - Extenuating Circumstances” lending program does just that — across the United States, the mortgage restructure offers a second chance by allowing families to apply for a new mortgage only 12 months after losing their home.
The Federal Housing Administration’s Mortgagee Letter 2013-26 states, “FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”
Those in the program do not face premiums nor additional fees at closing. In fact, the program is designed for families afraid of complex loan processes and those who have been turned down by other banks. Lenders are making it easy for those with negative credit histories.
To apply, borrowers must first have a home mortgage lender that offers the Back to Work program. Secondly, the family must be demonstrating a full recovery from at least one type of financial crisis, including prior foreclosure, prior short sale, bankruptcy, deed-in-lieu, loan modification or forbearance agreement.
Borrowers must agree to attend at least one hour of one-on-one housing counseling, required by the FHA. Mortgagee Letter 2013-26 states, “Housing counseling enables borrowers to better understand their loan options and obligations, and assists borrowers in the creation and assessment of their household budget.”
Still struggling and searching for a shorter waiting period? Looking for a more promising mortgage restructure? A home mortgage lender offering the “Back to Work” program is waiting to help.
