FHA Launches Letter-Mailing Campaign, Targets At-Risk Borrowers
The U.S. Department of Housing and Urban Development said late Friday that it will begin mailing letters this week to hundreds of thousands of at-risk homeowners, as part of a campaign to drum up refinancing activity for FHA-backed mortgages. In particular, the effort appears to target FHASecure applicants. The recently-announced program -- intended to target delinquent and defaulting subprime borrowers -- has been less effective than originally hoped. In a press statement, HUD officials said the first round of 280,000 letters was sent this week with another 570,000 letters to be sent through September 2008. "For hundreds of thousands of families, this letter might be the most important piece of mail they receive all year," said HUD Secretary Alphonso Jackson. "Not only could this information keep a roof over their heads, it could provide them with financial sustainability and security for the long term. Our aggressive outreach will ensure families are educated about the safe mortgage alternative that FHA offers." Letters are being sent to homeowners who have already faced or are experiencing the first reset of their adjustable rate mortgages, Jackson said, and live within geographic locations that are currently subject to FHA loan limits nationwide. FHA loan limits are set to receive a big boost, however, with legislation passed by Congress last week that will see FHA loan limits temporarily lifted from their current maximum of $362,790 to a new maximum of $729,750. President Bush is expected to sign the bill into law this week. The HUD letter, interestingly, directs borrowers to call an FHA-specified help number if they want to speak to a housing counselor -- and does not direct borrowers to the so-called HOPE hotline that has been promoted by administration officials heavily during the past few months.