May 22 • 05:28 AM

Losing your home due to an adjustable rate increase

October 03, 2007

My mortgage payment just increased dramatically since I have an adjustable rate mortgage. I cannot afford the new payment and the lender is threatening foreclosure. Is there anything I can do at this point to save my house?

— D.S., Dryden

D.S., Yes, there is a program that the government just authorized to stem the rise of foreclosures that happen due to circumstances like yours. The program is called FHA Secure. It allows homeowners to refinance their current adjustable rate mortgage into a fixed rate FHA loan. You can still qualify even though you may have missed several months of the higher payments. You need to act fast though as the window of opportunity for your situation may be closed soon. This FHA Secure loan program is only open to homeowners who were making timely payments at the lower rate and then have been unable to make the higher payments once their mortgage rate adjusted. This loan program is not available to those with fixed rate mortgages currently. This is only for those homeowners who have adjustable rate mortgages and have been unable to make the higher payment upon adjustment. You must also have at least 3% equity in your home or pay 3% down since FHA mortgages are limited to 97% of the value of your home. This may be difficult for some homeowners who refinance too often and may owe more than their home is currently worth. Another option if the FHA Secure program does not work for you is to negotiate with your current mortgage holder to reduce your rate to something you can afford. The bank only forecloses as a last option. You might be able to convince them to lower your rate to keep you in the home. You first should look into the FHA Secure program though. Call a lender who is familiar with the FHA Secure program immediately. There is one lender that I know well that specializes in these mortgages. I would recommend that you and anyone else in a similar situation call this lender immediately. His name is Don Schultz from Watson Group Financial. He can be reached by phone at (810)-614-0977. As more and more foreclosed homes flood the market it lowers the values of all homes. If this program can save someone from foreclosure, then the entire community as a whole benefits.

Alex Lengemann is a licensed Real Estate Broker who operates, a local real estate company. You can Ask Alex your real estate or mortgage questions by phone 810-664-1819 or by email


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