COLORADO SPRINGS, Colo - Gram is getting a new lease on a home buyer's life. I'm calling him Gram because he doesn't want his real identity used. His life changed in an instant after his home was foreclosed on last July. He lost his job, went through his savings, got a new job but then the bank wanted to charge him 20 thousand dollars for him to keep his home. He told me it was a decision that changed his life, "I had to make the decision to cut my losses and unfortunately let my house go."
Thirteen months later, Gram has got new hope to get into a new home and stop renting. On August 15th, The Federal Housing Administration sent out a new rule change on all F-H-A approved mortgages. Essentially it says the clock has been reset from 36 months to wait to buy a new home to one year under certain conditions. Those conditions include someone losing their home to foreclosure because of loss of employment, the borrower has completed housing counseling and gotten their credit on the right track.
When I told Gram about the new rule change he told me, "It actually excited me very much. Obviously I'm renting right now and my preference would be to be back in my home."
Lending expert, Jay Garvens with Garvens Mortgage Group is happy about a new group of potential home buyers, "Hopefully this will help the recovery for the local economy and on the national scale, we'll see." Garvens skepticism is a reality check because as he told me, "Now we have to see what the investors do. Are they going to adhere to the exact policy from the Federal Housing Administration or will investors say we appreciate the aggressive nature for people to recover but with our guidelines, we are going to restrict our money to two to three years after a foreclosure."
The Federal Housing Administration insures home loan money. Investors are the ones who put their money on the line and can decide how they want to invest it.
The rule change is so new that we haven't gotten a feel for how man lenders are going to agree with it.