Refinance Rescue

From the IHT:

Today, President Bush and Democrats in Congress are all counting on the FHA to lead the national effort to rescue homeowners at risk of foreclosure. And Montgomery, a long-time Bush loyalist who came to this job with little housing experience, has gained prominence as an unexpectedly influential official whose quiet efforts to modernize a stagnant agency have won the respect of Democrats and Republicans alike.

Bush has asked the FHA to help borrowers in crisis refinance into stable, government-backed mortgages. By December, the plan, called FHA Secure, is expected to help about 500,000 families refinance. The FHA insures mortgages for many first-time, minority and low-income borrowers. Critics warn that the agency, which is overseen by the Department of Housing and Urban Development, lacks the capacity to handle such an extraordinary increase in business.

Housing officials say they need to fill 300 vacancies by Sept. 30, when the fiscal year ends.

The housing bills under consideration would allow the agency to borrow personnel from other agencies.

Montgomery has defied expectations since he left his job in 2005 as secretary of the cabinet in the White House to head the FHA. From 2002 to 2006, the number of single-family loans insured by the FHA fell from about 1.3 million to just over 300,000 as homeowners abandoned FHA’s conventional loans in droves for the subprime market. "You were kind of starting to see FHA fade into the night," Montgomery said.

But lawmakers and industry experts say Montgomery brought an unexpected sense of vigor to the moribund agency.

In 2007, he created an FHA Web site to allow lenders to more easily navigate the agency’s rules.

"I made the decision early on," said Montgomery, who served under Housing Secretary Alphonso Jackson, who resigned amidst a contracting scandal in April. "Actually, I rather like him," said Representative Maxine Waters, the California Democrat and chairwoman of the housing subcommittee in the House. Allen Jones, chairman of the Mortgage Bankers Association, said Montgomery listened to their concerns. Montgomery has criticized FHA’s seller-financed downpayment loan program, which has left the agency on the brink of insolvency. Most of the program’s participants are homeowners who have made their mortgage payments on time.In addition, HUD’s inspector general has criticized the agency’s failure to consistently refer potentially fraudulent loans to the inspector general and its failure to weed out appraisers with expired licenses from FHA approved lists. Some worry that the agency’s expanding workload will exacerbate such troubles. Montgomery notes that he shifted course when necessary.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
This entry was posted in Refinance and tagged , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.