Guest Author - Dianne Walker
Help may finally be on the horizon for some homeowners who are facing a mortgage crisis. The program is called “HOPE for Homeowners (H4H)”. The purpose of the program is to help financially strapped homeowners to keep their homes and to help the mortgage companies that are also struggling with the large increase in defaulted loans. The program runs from October 1, 2008 through September 30, 2011.
Many homeowners are struggling with high mortgage payments. With the increasing unemployment rate, many families are finding it very difficult to make ends meet. A press release dated October 1, 2008 by HUD Secretary Steve Preston stated, “For families struggling to keep up with their mortgage payments, this program will be another resource to refinance into a loan they can afford.” HUD is asking for homeowners to work with their mortgage company to see if they can receive assistance by using the HOPE program.
Lender participation in the program is entirely voluntary. For the properties participating in the program, the lender must “write down” the home appraisal to 90 percent of its value. This option helps to avoid foreclosures which are more costly in the long run.
There are certain restrictions that are included in the HOPE for Homeowners program. The program allows successful candidates the ability to get a 30-year fixed rate mortgage. It’s important that the homeowner contact their mortgage company as quickly as possible to obtain a complete listing of the rules and regulations required for participation. Below is a partial list of the criteria for program participation as stated in the HOPE for Homeowners fact sheet:
- Mortgage must have originated on or before January 1, 2008;
- The homeowner is unable to maintain payments at the current mortgage;
- The homeowner had to have made six full payments on the existing mortgage and not have missed mortgage payments on purpose;
- The mortgage to debt to income ratio is at least 31 percent;
- The property is the only home owned by the homeowner;
- The homeowner did not “knowingly or willfully provide false information” when they obtained the current mortgage; nor have been convicted of fraud in the previous 10 years.
- The homeowner must fully document income and employment;
- The homeowner must agree to share the equity created at the beginning of their new mortgage and any future increase in value;
- Any secondary lenders must release outstanding mortgage liens.
HOPE for Homeowners is designed to be a win-win situation for both struggling homeowners and lenders facing large numbers of defaulted home loans. It’s important that any homeowner, who feels that they may be a fit for the program, find out about their eligibility as quickly as possible. There are 4 ways to get the information:
1. Contact your current mortgage company.
2. Visit www.fha.gov to find a HUD approved counseling agency.
3. Call the HOPE NOW Alliance at 1-888-995-HOPE.
4. Call the Federal Housing Administration (FHA) 1-800-CALL-FHA.
It is important for people to keep in mind that not everyone will be eligible to participate in the HOPE for Homeowners program. Even if you are eligible, you may find that participation in the program might not be suited for your family. The best way to find out is to do some research and gather as much information as you can prior to making the commitment to the program.