10,000 COLORADO FAMILIES NOW ABLE TO ACCESS AFFORDABLE, GOVERNMENT-BACKED MORTGAGES
New loan limits in Colorado will open the door for more families to use FHA

DENVER - Nearly 10,000 Colorado families will be able to receive mortgage relief through affordable refinancing solutions, U.S. Department of Housing and Urban Development’s Regional Director, John Carson announced today.  Speaking at the "Stop Foreclosure Now" workshop, Carson said even more homeowners could be helped through recent changes to HUD's Federal Housing Administration (FHA) as a result of President Bush's Economic Stimulus package.

Signed into law last month, a key provision included in President Bush's Economic Stimulus Package temporarily increases FHA's loan limits, which will help thousands of Colorado families become eligible to purchase or refinance their home with FHA-backed loans. The new loan limits vary across Colorado, but are now $406,250 in the Denver area. Previously, the maximum FHA loan limit in Denver was $308,370---an increase of nearly $98,000.

"The math looks very hopeful. The increased mortgage limits allow FHA loans to be
more competitive with other loans so we can offer help to more families," Carson said.

For nearly two years, legislation has been awaiting Congressional approval that would help more families use FHA-backed loans. The FHA Modernization bill would increase
loan limits permanently, make the minimum down payment for FHA-backed loans more flexible, and create a fairer insurance premium structure. HUD estimates these reforms could help as many as 250,000 more families nationwide by the end of 2008. 

In the interim, the Administration created a new product, called FHASecure, to help homeowners facing foreclosure refinance into a safer, more secure FHA-insured loan. Already nearly 125,000 homeowners have been able to
refinance with FHA. 

"In the last three months, there are more households in Colorado with FHA-backed loans. By year's end, we expect FHA will be able to help more than 300,000 families refinance into affordable FHA-insured mortgages, many of whom are in Colorado," Carson stressed.

Backed by the full faith and credit of the federal government, FHASecure has made a significant and positive impact on the housing market. From September 2007 through January 2008, FHA helped pump more than $47.5 billion of much-needed mortgage activity into the housing market, and more than $19 billion of that investment came
through FHASecure. More than 90 percent of borrowers who refinanced from the subprime market into FHA now
have 30-year fixed rate loans with much lower monthly mortgages.

"Foreclosure is tragic. But it is not inevitable. There is much we can do...and much we are doing. Many people can avoid foreclosure, if they take some important actions. Together, we can save hundreds of thousands of people
from foreclosure. If you are in the process of foreclosure, right now, we may be able to help you save your home," Carson told homeowners who attended the workshop seeking assistance with their current mortgages.

With more families looking for an alternative to their exotic subprime loans, FHA has seen a dramatic increase in business in Colorado. In February 2007, 794 Colorado families turned to the FHA to refinance or purchase their
homes. One year later, in February 2008, more than twice as many did, 1,824, a significant increase, and a direct result of HUD's aggressive FHASecure refinancing product.

To improve financial literacy and ensure families understand the fine print of their mortgages, the President has requested $65 million in his new budget for housing counseling. Since 2001, the Administration has increased
housing counseling funding by 150 percent and has seen positive results from its 2,300 HUD-approved housing counseling agencies. HUD estimates 96 percent of those who saw a HUD-approved housing counselor in 2007
avoided foreclosure. 

"Housing counselors can help homeowners gain a better perspective about affordability. Families must understand
the features of financing and the ramifications of resets, and the terms and the timelines. Prospective homeowners must have a prudent mortgage. We must remove the mystery, confusion, and vagueness from the process," Carson said. 

Finally, Carson announced that the Bush Administration is proposing powerful reforms to ensure it is easy for homeowners to understand the fine print when they sign their mortgage documents. Last week, HUD announced suggested changes to the Real Estate Settlement Procedures Act (RESPA). This proposal presents homebuyers
with a standard form disclosing important aspects of their home loan, which will bring much needed transparency
and simplicity to the home buying process for the 12.5 million Americans who buy or refinance a home every year.
This new disclosure would provide complete, accurate and understandable mortgage information to families early in the homebuying process and would save consumers almost $700 in closing costs.

"We must make mortgages understandable and clear. These regulations are an important step forward in changing
the climate of the lending culture," Carson said.

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HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities;
creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the
Internet and espanol.hud.gov.