FHA loans are becoming evermore popular. Since the sub-prime fallout many people are left holding the bag as lenders are jumping ship.

FHA loans are going to emerge as the next big thing and we here at Access Granted can do 100% financing for people with serious credit problems who just want a fresh start.

Take a look at this:

HOW DO WE DO 100% FINANCING ON A LOAN THAT OTHER CAN ONLY DO 97%???

By Holden Lewis • Bankrate.com

The Federal Reserve cut interest rates this week. So naturally, mortgage rates went along for the ride, right?

Wrong.

The benchmark 30-year fixed-rate mortgage rose 4 basis points, to 6.32 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of one percentage point. The mortgages in this week’s survey had an average total of 0.34 discount and origination points. One year ago, the mortgage index was 6.44 percent; four weeks ago, it was 6.58 percent.

The benchmark 15-year fixed-rate mortgage rose 4 basis points, to 6 percent. The benchmark 5/1 adjustable-rate mortgage rose 11 basis points, to 6.41 percent. On larger loans, the benchmark 30-year jumbo rose 3 basis points, to 7.23 percent.

On Tuesday, the Federal Reserve cut the overnight federal funds rate by half a percentage point. The central bank explained that “the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally.”

The Fed’s goal wasn’t to send mortgage rates lower. Among other things, the central bank wanted to induce lenders to say yes more often — especially to jumbo borrowers, who have applied for mortgages greater than the conforming limit of $417,000. In the past month, lenders have become more reluctant to extend jumbo mortgages, because investors are scared of buying packages of jumbo loans. Investors are not sure about the quality of the loans out there. That’s what has frozen up the jumbo market, and observers believe the Fed was trying to thaw it out.

“I think the Fed took an aggressive stance here,” says Bob Walters, chief economist for Quicken Loans. The central bank, Walters says, showed clear concern over what’s happening in credit markets, the housing market and the overall economy.So why did mortgage rates go up this week, instead of heading down? Mortgage rates got ahead of the Fed, that’s all. Two months ago, the benchmark rate on the 30-year fixed was 6.82 percent. Not long after, investors started to get clued in that the Fed really might cut short-term rates — and mortgage rates have fallen in six of the nine weeks since then.

How much did rates fall since that mid-July peak? Last week, they had fallen 54 basis points. This week, the Fed cut short-term rates by 50 basis points, and the 30-year fixed went up 4.

In other words, both the federal funds rate and the 30-year fixed have fallen by identical amounts in nine weeks. The Fed was just catching up.

By JEANNINE AVERSA, AP Economics Writer Thu Sep 13, 6:20 PM ET

WASHINGTON - Former Federal Reserve Chairman Alan Greenspan acknowledges he failed to see early on that an explosion of mortgages to people with questionable credit histories could pose a danger to the economy.

In an upcoming interview, Greenspan said he was aware of “subprime” lending practices where homebuyers got very low initial rates only to see them later jacked up, causing severe payment shock. But he said he didn’t initially realize the harm they could do.

“While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late,” he said in a CBS “60 Minutes” interview to be broadcast Sunday. “I really didn’t get it until very late in 2005 and 2006,” Greenspan said.

An excerpt of the interview was released Thursday.

A meltdown in the subprime mortgage market has rocked Wall Street. Foreclosures and late payments have soared and lenders have gone out of business. Nervous financial institutions tightened credit standards, making it harder for even more creditworthy borrowers to get financing. This has increased chances the economy might slide into a recession.

 Greenspan, who ran the central bank for more than 18 years — the second-longest serving chairman in history — left in 2006. His successor, Ben Bernanke, has had to deal with a credit and financial crisis stemming from the subprime mortgage mess.

When he was at the helm, Greenspan maintained there was little the Fed — which also oversees the safety and soundness of banks — could do about the subprime situation. One of the Fed’s governors, however, had raised a red flag about questionable lending practices.

“Well, it was nothing to look into particularly because we knew there was a number of such practices going on, but it’s very difficult for banking regulators to deal with that,” Greenspan said in the interview.

Some blamed Greenspan’s interest rate policies for feeding the housing frenzy. Sales had hit record highs and house prices galloped from 2001 to 2005. Then the market fell into a deep slump.

The Greenspan Fed from early 2001 to the summer of 2003 had slashed interest rates to their lowest level in decades. It was done to rescue the economy from the blows of the bursting of the stock market bubble, the 2001 recession, the terror attacks and a wave of accounting scandals that shook Wall Street.

Critics say the Fed kept rates too low for too long, encouraging a Wild West mentality in housing.

Greenspan, however, defended the institution’s actions.

“They are mistaken,” he said of the critics. “It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low,” he said.

Meanwhile, some believe that Greenspan would have acted more aggressively than Bernanke in dealing with the current financial crisis. “I’m not sure that’s true,” Greenspan said. “I think (Bernanke) is doing an excellent job,” he said.

Greenspan has written a book, looking back on his life and his days as Fed chief. It will be released on Monday.

Mortgage brokers and lenders that change rate? It’s disgusting, deceitful, and these type of companies should be exposed for what hey are.  Click the link to see what I’m talking about.

WATCH THIS VIDEO…PROTECT YOURSELF FROM THINGS LIKE THIS

QUESTION: My parents are in their mid-70s and have some health issues. They would like to stay in their home. Would a reverse mortgage make sense for them?
— Keven Engel, Scottsdale, Ariz.
ANSWER: For cash-strapped seniors rich in home equity, a reverse mortgage can spell the difference between burgers at Denny’s and steak at a four-star restaurant — but that steak does come at a high cost. Reverse mortgages are the inverse of traditional mortgages. Here, you borrow against your home’s equity. But instead of making payments to the bank, the bank makes payments to you. Unlike a regular mortgage, your debt (rather than equity) grows over time. But as long as you continue to live in the home, you won’t owe a dime. The loan is paid back when the house is sold (often upon death) or your heirs can pick up the tab. Only folks age 62 and older are eligible.

MORE REVERSE MORTGAGE PITFALLS

Reverse-mortgage market zooms forward

Plenty of new products are emerging, but consumers still need to be wary

By Andrea Coombes, MarketWatch

The new breed of reverse mortgages generally allow for higher loan amounts and lower fees than the traditional, government-backed loans, but may charge higher interest rates.

There’s even a new product that sidesteps banks entirely and structures a reverse-mortgage loan between family members.

 hat growth may be spurred by a new generation of homeowners who are more willing to tap their home equity.

“There is an older generation that believes strongly in paying off the mortgage and having the home free and clear, but many boomers have used home-equity lines of credit their whole lives. They’re much more likely to see their home as a financial resource,” Rother said.

A willingness to tap your home equity isn’t always a good thing, he warned, particularly if you’re a younger retiree with many years of property taxes and maintenance costs ahead of you — costs which you’ll have to pay even with a reverse mortgage in hand.

But “the bigger risk, frankly, is just the cost of taking out a reverse mortgage,” Rother said. “This is a lot more expensive than a first mortgage, a second mortgage or a home-equity line of credit. The fees involved are much, much higher,” he said.

With the most common reverse mortgage, the FHA-backed home equity conversion mortgage, loan limits vary by locale, but top out at about $362,000. Borrowers can expect to pay about 4% of the loan amount in origination and insurance fees, plus another $900 to $1,200 in various other closing-cost fees, according to NRMLA.

Reverse-mortgage interest rates can be fixed or variable, although the Federal Trade Commission says most are variable. Those rates are tied to financial indexes such as the London Interbank Offered rate or 1-year Treasury rate and move up or down with market conditions.

“Our advice is that this could make sense for some people, but it’s risky and it’s expensive. It really should be a last resort if you really don’t have another option,” Rother said. “It’s more appropriate for people in their late 70s and 80s. They’re much more likely to find themselves in that situation.

MORE INFO ABOUT REVERSE MORTGAGES

Reverse mortgages are loans that are available to elderly homeowners. The loan amount is based on their age and the amount of equity they have in their home, and doesn’t have to be repaid until the homeowner passes away, moves out, or sells the house.

A reverse mortgage can be dispersed in several ways:

1. A line of credit can be extended, from which the homeowner can draw money as needed.
2. A fixed, monthly amount over a short period of time (5 years, for example).
3. A fixed, monthly amount for the rest their lives (or until they sell the home).
4. One lump sum.

The most popular type of reverse mortgage is FHA.s Home Equity Conversion Mortgage. This loan has the lowest interest rates, but also has the lowest maximum amounts you can borrow against the home’s equity. Maximum amounts vary by state and county, ranging from $200,160 to $362,170.

Fannie Mae also offers a reverse mortgage program called Home Keeper. The interest rates with Fannie Mae are a little higher, and adjust monthly. The benefit of the Fannie Mae program is that the maximum mortgage limit is higher. The limit for 2006 is $417,000 and does not vary by county or state.

To be eligible for a reverse mortgage, the borrower must be 62 or older, and the home must be the borrower’s permanent residence. Because there’s no repayment obligation, borrowers need not have excellent, or even good, credit.

by David Bach

If you’re a homeowner and are having trouble paying your mortgage, this article could save your house and your family’s finances.

As I write this, several million Americans are in jeopardy of losing their greatest investment to foreclosure within the next 18 months. But help is available, and there are ways to work with your lender to help keep your home.

Unfortunately, too many people don’t know this. In fact, according to a survey conducted by lender Freddie Mac and market research firm Roper Public Affairs and Media, nearly two-thirds of delinquent borrowers are unaware that their lender even offers repayment options.

Pressure on Lenders, Help for Borrowers

Banks really don’t want your house, and there’s enormous financial pressure on lenders that foreclose. According to a recent New York Times article, it actually costs a bank an average of $40,000 to foreclose on a loan.

Equally important to lenders is the political pressure currently being placed on them to “work out this problem.” The Federal Reserve, Congress, the Senate, and presidential candidates are all paying attention to the issue of record foreclosures, many of which are a result of adjustable rate mortgages (ARMs) and subprime lending.

In addition, agencies like Fannie Mae, Freddie Mac, and the Federal Housing Administration have begun putting pressure on lenders to offer more options to borrowers in trouble. As a result, there will be more help than ever for borrowers to work out a way to stay in their homes.

The Six Steps

With that in mind, here are six things you need to know if you or someone you know is having a problem making their mortgage payment:

1. Call your lender immediately.

The single biggest mistake borrowers make when they fall behind on their mortgage is not contacting their lender. As soon as you realize you have a problem, you’ve got to make that call.

“The sooner the lender is approached, the better,” says Tim McGarry, spokesman for Washington Mutual. “Even after one receives a default notice, one should contact the lender and open up discussions.” The foreclosure process for most lenders has a set schedule (see point 6 below), so the longer you wait the fewer options you’ll have.

2. Ask to speak to the “loss mitigation” department.

See if your monthly statement contains the phone number to the lender’s loss mitigation department. If not, call the customer service number and ask for that department.

At most lenders, the loss mitigation department helps borrowers determine which workout option they qualify for. Keep in mind, though, that some lenders have their collections departments advise borrowers on workout options, so don’t be alarmed if you’re sent straight to collections.

3. Be prepared to review your situation in detail with your lender.

Your lender will ask a series of questions to assess your financial situation. Some lenders, like Wells Fargo Home Mortgage, have specialists with both the training and technology to pre-qualify a caller for a workout option right over the phone.

If you have the right financial documents in front of you when you make the call, you might be able to get a resolution within minutes. So organize your bills, statements, and anything else that will help give an accurate picture of your current financial status.

Patrick Carey, senior vice president of Default and Retention Operations at Wells Fargo Home Mortgage, advises borrowers to be completely honest and upfront about their personal financial situation. “You’ve got to be candid,” Carey says. “If you make your situation out to be better than it actually is, you’ll get a workout agreement that isn’t going to help you, leaving you worse off than where you started from.”

On the other hand, he goes on, “If you make your situation out to be more dire than it is, your lender might determine that there’s no way for you to afford your payments and may only offer liquidation options.”

4. Know the ways your lender can help you avoid foreclosure.

Depending on how serious your situation is, your lender can either offer you retention options (ways to keep your house) or liquidation options (ways to give up your house without going into foreclosure). Specifics for each vary from lender to lender, but here’s a general list of what to expect:

Retention options: A 2004 Freddie Mac study showed that retention options could lower the probability of foreclosure by 80 percent among all borrowers and by 68 percent among subprime borrowers. Retention options include:

• Forbearance: Generally lets you pay less than the full amount of your mortgage payment for a temporary period.

• Repayment plan: A form of forbearance where you pay the outstanding amount in installments divided over a period of time.

• Reinstatement: You pay your lender the total outstanding amount in one lump sum by a specific date.

• Loan modification: Your interest rate and/or term of loan is altered — that is, the mortgage note itself is changed.

Liquidation options: If you simply can’t afford to stay in your home and haven’t been able to sell it, you may qualify for one of the following liquidation options:

• Short sale: When you get an offer that’s less than the amount you owe, your lender could consider it as a settlement.

• Deed in lieu of foreclosure: This allows you to transfer your property voluntarily to your lender.

• Assumption: Permits a qualified buyer to take over your mortgage debt and pay the mortgage payments.

If you have an FHA loan, you may have additional options available to you. For example, HUD provides interest-free loans to repay past-due interest and escrow amounts. It’s important to check with your lender for details.

5. Know where to turn if you aren’t getting the help you need from your lender.

There are other places to go for help if you find that your lender isn’t being helpful. It’s important not to give up, and to take further action. The Homeownership Preservation Foundation is a HUD-certified, nonprofit organization that offers advice and resources to help homeowners with financial challenges. Reach out to them by calling 1-888-995-HOPE.

6. Be aware of the foreclosure process — and consequences.

If you’re not making monthly payments and haven’t discussed workout options with your lender, eventually the foreclosure countdown gets under way.

In general, there are four stages:

1. Redemption: The lender’s attorney contacts you and gives a deadline — known as a cure date — by which all missed loan payments must be paid back in full in order to avoid foreclosure.

2. Default: If the cure date comes and goes without you doing anything about it, the lender posts a notice of default.

3. Foreclosure: If you don’t cure the delinquent payments after the default notice has been posted, the lender exercises his rights under the trust deed he holds and forecloses on the mortgage, taking possession of your house. If you’re still living there, the lender will get a court order to have you evicted.

4. Sale: The lender sells the foreclosed home at public auction. This can take place within 30 to 120 days depending on state law.

You should avoid foreclosure at all costs. Not only will it ruin your credit rating, but losing your home to foreclosure is one of the scariest experiences a family can go through.

Take Control of Your Future

If you have a subprime or ARM, pull out your loan documents today. Figure out whether you’re going to have a problem meeting the monthly payments in the future. If so, call your lender right away to find out about refinancing options.

The bank will usually contact you 45 days before your mortgage resets, but by then it’s too late to take any real action. Instead, take control. Contact your lender 120 to 180 days in advance to get working on your options.

Remember, your home is probably your best investment and largest asset. Do all you can to protect it — and yourself.

by David BachBack in April, I wrote “Six Steps to Avoiding Foreclosure” as a practical guide for homeowners who are having trouble meeting their mortgage payments.

The most important nugget of advice I gave in that column — and something that not enough homeowners do — is to take the initiative to call your lender as soon as you realize you have a problem.

The same advice holds true if you have an adjustable rate mortgage that’s going to reset to a higher interest rate — which in turn will raise your monthly mortgage payment.

Get Ready Now

More than a trillion dollars in adjustable rate mortgages are scheduled to reset this year. As a result, experts predict that foreclosures could double in 2007, and reach an even higher level in 2008.

With all this negative news, you have to wonder if you’ll be affected. What are you doing right now to protect yourself? Are you simply waiting for something to happen? I hope not, because you need to be proactive if you have an adjustable rate mortgage.

For instance, have you called your lender to determine what your new monthly payment will be and when it will take effect? Do you have a mortgage that’s currently 4.75 percent and headed to 7.5 percent when it adjusts? Do you have a clue as to when that adjustment will occur?

Contact Your Lender

As standard procedure, your bank or lender will probably send you a letter shortly before the new payment amount goes into effect. The problem is that by then your higher rate and payment will be ready to kick in.

You can’t afford to wait for that letter — you need to proactively contact your lender 120 to 180 days in advance and discuss what your options are. Can you refinance? If not, what solutions can your lender offer to allow you to handle the rate increase?

Many of you will see your home mortgage payment increase by as much as 50 percent in the next 18 months. If you can’t handle this increase — and many of you can’t — you need a plan now.

No Advance Notice

In my travels, I’m often asked, “Why don’t lenders reach out earlier to borrowers — especially the ones who’ll see huge increases once their loans reset?”

The New York Times just ran an article revealing that some lenders are now being more proactive in reaching out to their borrowers than ever before.

That’s great news, but the article also points out that not all servicers in the industry have the freedom to change the terms of a loan. What that means is they can’t call you in advance to discuss your rate adjustment. In those cases, the borrower (that’s you) needs to reach out to the lender.

Many Hands in the Pie

Many homeowners assume that their mortgage is a straightforward legal agreement held directly between themselves and their lender. In reality, it’s more complex than that.

A mortgage contains terms that are influenced by a number of constituents — the lender who made the loan, the servicer who manages the loan, the regulators who oversee it, and the investors who buy it. All these components of the mortgage market work together in order to extend a mortgage loan to you, the consumer.

Here’s how the cycle works: You get a mortgage loan from a lender, and most lenders hold the loan for a short period before selling it. The sale of your mortgage gives the lender the money it needs to give a loan to someone else who wants to buy a home.

The mortgage market in the United States has worked this way for decades — very successfully, I might add. It’s why millions of people all over the country can borrow money to buy a home.

From Mortgage to Investment

Traditionally, mortgages have been one of the safest and most stable investments going, since so few homeowners default and a relatively low percentage of people pay off their loans in any given year.

For this reason, capital market investors — usually Wall Street institutional investors or securities underwriters like Bear Sterns or UBS — buy a large number of loans and then group them to back security bonds.

Big corporations invest in these bonds through their pensions, mutual fund investors buy the bonds for their bonds funds (which you and I then invest in through our 401(k) plans), and insurance firms buy the bonds to cover future insurance claims.

Rock the Boat

Why won’t your lender call you “early” to prepare you for a rate hike? If you’re showing no outward signs of being delinquent on your mortgage, the lender — who’s servicing your loan on behalf of the investors who loaned you the money to buy a house — has to be sensitive to their desire for a stable investment.

So, depending on the product you have, the lender might not initiate a conversation with you if your loan payments have been coming in on time.

For this reason, you must do the initiating. You have to pay attention to your mortgage, interest rate, and the date it will adjust, and it’s up to you to call early instead of waiting to be contacted.

A Solution on the Horizon

Given the recent uptick in delinquencies, investors, lenders, regulators, and legislators are discussing proactive solutions for consumers who need help. That’ll take some time, since they have to figure out a method of relief that doesn’t disrupt a complex financial system that supports both a healthy exchange of investment capital and homeownership — the key driver of the American economy.

The brutal truth is that you don’t have enough time to wait for their solution. You have to take matters into your own hands. So if you have an adjustable rate mortgage, take out your loan documents today. Call your lender and have them calculate your adjusted monthly payment. Finally, ask about your refinancing options.

The same advice holds true for anyone having trouble making their mortgage payments — call your lender immediately. It’s a simple approach to a not-so-simple set of circumstances.

Ironically, June is National Homeownership Month, and my advice to all the Automatic Millionaire homeowners out there is to stay the course during challenging times. Be smart, responsible, and proactive. Your home is probably the best investment you’ll make in your lifetime, so protect it by paying attention to your mortgage and how the financing works. The more you know, the more you can do.