Housing is the most important part of getting the Economy back in shape – (according to many of the guys that met for The Global Economic Summit in Davos). Keeping that in mind, it’s important to remember how FHA and the Government Backed “Mortgage” Programs might be able to help with our housing issues, and hopefully fix them.
When the Great Depression hit in 1929, millions of Americans began to loose their homes to foreclosure. Short term mortgages (3-5 years) and balloon payments were common. The banking crisis during the 1930s forced banks to call in loans, and there were no refinancing options for the average homeowner.
As a result the federal banking system was restructured and in 1934 The National Housing Act was passed. This legislation created the Federal Housing Administration (FHA) with the intent to regulate interest rates and mortgage terms on the loans that it insured. The agency purchased mortgages and insured them, allowing banks to turn around and make another loan without putting out substantial capital of its own.
Today, we have some of the same problems they had during The Great Depression, and that’s one of the reasons the Obama administration is looking at new ways to use FHA mortgage loans to help with the current crisis! With these changes, many “vague” statements on the Internet about FHA mortgage loans could be wrong… so if you are considering purchasing a home in Raleigh, or refinancing in Cary, NC – please call Steve and Eleanor Thorne at Connect With Us on Facebook, Inc to get the most up todate information! 919-649-5058