Program aims to help avoid foreclosure

ANCHORAGE, Alaska — It’s estimated nearly 900 homes in Alaska currently face foreclosure, but a new program aims to reduce that number

The Federal Housing Administration has a new program to help people with good credit get out of their foreclosure situation.

Foreclosures don’t just effect homeowners, lending companies lose about $50,000 per home, and it costs the community an average of $40,000 per home in lost taxes, depreciated home values for surrounding houses and job losses.

In the last five years the dream of owning a home turned into a reality for people who previously couldn’t afford it.  All thanks to special deals, called sub prime loans that make interest rates extremely low.

Jan Jones with Consumer Credit Counseling Service of Alaska said in many cases the borrower got the loan when they really shouldn’t have.

“The sub prime market takes the marginal borrower and gives them a home loan and some of them are in a position to where maybe they shouldn’t have gotten the loan,” Jones said.

Even though they offer a home ownership opportunity, it could be on a shaky foundation.

Sub prime loans come with adjustable mortgage rates, which after a few years reset to a much higher percentage, leaving some borrowers scrambling to keep their home.

“Many of them are trying to hold onto that dream until the last minute and unfortunately the homes are in the position to where they’re going to be going into foreclosure,” Jones said.

Rod Dunston thought he got a good deal when he signed up for his adjustable rate mortgage. Dunston’s interest reset and he is trying his best to refinance while facing foreclosure.

“If I can’t get it to where I am comfortable with it, they’re going to have to foreclose it,” Dunston said.

A new program from the FHA, called the Secure Program, may help Dunston and many others keep their house.

It helps borrowers refinance their home into a traditional fixed rate loan so it can’t reset to a higher interest rate.

There are rules for this program however; to qualify you must have an adjustable rate mortgage that has reset, enough income to make your mortgage payment, a history of on-time mortgage payments before the loan reset and reasonably good credit.

This program gave Dunston a light at the end of the tunnel.

“It would ease my mind if I could get under it and I would probably stay up here,” Dunston said.

If you think you qualify, you need to act fast.

“The sooner people take advantage of it, the less damage they’re going to have to their credit report and the better interest rate they’ll get,” Jones said.

Time is of the essence in getting your home loan on a solid foundation.

The Secure Program ends Dec. 31, 2008.

Contact Jennifer Zilko at jzilko (at) ktuu (dot) com

by Jennifer Zilk, WorldNow and KTUU

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