Are there any special foreclosure defense options for FHA loans?

The FHA insurance you pay when you take out an FHA loan insures that if you default on your loan, FHA will pay your lender what you owe on your loan balance. Ownership then transfers to HUD.  HUD homes are generally sold at foreclosure auctions to the highest bidder for cash.   Before this occurs, FHA foreclosure laws require that your lender provide you with a booklet entitled "How to Avoid Foreclosure". They must also meet with you in person to discuss a pre-foreclosure review and options to prevent your foreclosure before they can foreclose.  If your lender does not follow these rules, they cannot foreclose.   The Treasury Department provides incentives to lenders who reduce the principal of mortgages that are current, but where the homeowner is upside down on their mortgage (they owe more than the home is worth).  A popular foreclosure prevention option available to FHA borrowers is a loan modification under the government’s FHA HAMP Program. To qualify for FHA HAMP, you must meet the following guidelines:

• Your mortgage payment must exceed 31% of your gross income
• You must be delinquent at least 1 month on your FHA loan payment
• Only owner-occupied 1-4 unit homes qualify (no investment properties)
• Your unpaid principal balance on your home must be less than $729,500 ($934,200 for 2 units; $1,129,250 for 3 units and $1,403,400 for 4 units)
• You are only allowed to participate in the program once

If you are facing foreclosure on your FHA mortgage, your should speak with a foreclosure defense attorney immediately to find out your options and what defenses are available to you to fight the foreclosure. The attorney can negotiate with your lender, and represent you in court.