Important Information about Title IV of H.R. 3221 Foreclosure Prevention Act of 2008 - HOPE for Homeowners
Written by Scott Schang on August 27th, 2008> Loan Modification Help, CLICK HERE <
The fear of unaffordable mortgage payments is a very common reality for many, many homeowners. Knowing which way to turn can be as confusing as the loan documents that put you in this situation in the first place. One option that has received a lot of attention is the FHA Housing recovery bill of 2008.
Title IV of HR 3221is where you will find the information you have been looking for if you want to consider this program as an option to refinance your home. This program claims to serve approximately 400,000 home owners.
What hasn’t been getting a lot of press is what the requirements are for qualifying for this program. Following is an excerpt from this Legislative Notice issued June 18th, 2008 by the Senate Republican Policy Committee.
HOPE for Homeowners Program - The bill establishes a new program entitled the HOPE for Homeowners Program. The program will be overseen by a Board made up of the Secretary of HUD, the Secretary of the Treasury, the Chairman of the Federal Reserve Board, and the
Chairman of the Federal Deposit Insurance Corporation (FDIC). The Board will have the authority to develop standards within the framework of the legislation.Eligible Borrowers - Only owner-occupants who are unable to afford their mortgage payments are eligible for the program. No investors or investor properties will qualify. Homeowners must
certify, under penalty of law, that they have not intentionally defaulted on their loan to qualify for the program and must have a mortgage debt to income ratio greater than 31 percent as of March 1, 2008. Lenders must document and verify borrowers’ income with the IRS.New Loan Amount - The FHA refinancing program will let borrowers who have defaulted on their existing mortgages to refinance into FHA-guaranteed loans. Lenders must write down the principal balance of the loan to no more than 90 percent of the current value (and in some
circumstances less), and put the borrower in a 30-year fixed rate mortgage. Loans up to $550,000 are eligible. FHA is not allowed to charge insurance premiums sufficient to cover the risk of these borrowers, so it will result in a cost to the government, which will be paid for at first by funds from the Housing Trust Fund.
Equity & Appreciation Sharing -In order to avoid a windfall to the borrower created by the new 90 percent loan-to-value FHA-insured mortgage, the borrower must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the
borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner’s
access to the newly created equity will be phased-in over 5 years.
Existing Subordinate Liens - Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.
Qualified Safe Harbor - The legislation provides loan servicers with an incentive to participate in the program by offering a safe harbor against legal liability.
Program Size - The program is authorized to insure up to $300 billion in mortgages and is expected to serve approximately 400,000 homeowners.
Program Sunset - The program will begin October 1, 2008 and sunset on September 30, 2011.
The biggest challenges many folks will find with this program are the strict guidelines for qualifying. It is important that you completely understand this program when assessing your options.
In the borrower qualification guidelines issued by the Department of Housing and Urban Development on July 24, 2008 you will find even more restrictions….Here are some of the highlights:
- Borrower must certify that they have not intentionally defaulted on the eligible morgage or on any other debt (false statement = fine and/or 5 years in prison)
- Current lender must voluntarily forgive balance of existing loan to 90% of current market value.
- No pre-payment penalties can exist
- No subordinate financing (2nd mortgages) can exist. Subordinate lien holders must forgive liability.
- Requires borrowers to share equity and any future appreciation in the value of the property with the Federal Government.
Since this program does not begin until October 1st, 2008 there are still some detail about how it will work that have not been released. It does seem that this program is a viable option for those that do not plan to ever move or refinance (due to having to pay the Federal Government 50% of all future equity) and can qualify for an FHA loan using full income tax returns, pay stubs and asset documentation.
Loan modification is another option for folks that are looking for temporary to permanent payment relief and even buy some time to figure out what is best for you and your family. This can also be a confusing process due to an increase in loan modification Scams that are beginning to rear their ugly heads in these difficult times.
It seems that as quickly as sub-prime lenders where going out of business, new loan modification companies are opening up to prey on the folks that they took advantage of the first time!
For an honest assessment of your options please do some research on this site - HelpUmodify.org or call us today at 1-866-667-6724 and ask for Nancy, Diane or John.
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How can we find out if we qualify? Is there someone we can meet with?
31
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I am interested in Fixing my Mortgage Terms as I just went into an ARM 8/01/08
Thanks
James Eikelboom
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Principal Reduction, lower monthly mortgage payment which is currently $1,170
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my houe payments are simply to much for me to make…and my debt to income ratio is vey high i need help quickly as my rate is expected to go up in october…i have a second loan, iam not behind on my payment, or any other bills, yet. I am a single income women. Thank you for any help you can offer me. Sincerely Karen Demuth
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Hi Karen,
There are definitely options available that you can explore for payment relief. I recommend that you visit this website first - http://www.helpumodify.org to get more information about what options may be available to you.
There are many “sub-prime” lenders that have jumped into the business of assisting in reducing your mortgage payments, many of these folks are asking for large up-front fees. NEVER pay up front for a loan modification.
If you have questions about how to contact your lender to see what your options are, please call us at 1-866-667-6724
3
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Hi Jeffrey and Rosalind,
I am going to offer you the same advice as I have several others in your same situation.
There are definitely options available that you can explore for payment relief. I recommend that you visit this website first - http://www.helpumodify.org to get more information about what options may be available to you.
There are many “sub-prime” lenders that have jumped into the business of assisting in reducing your mortgage payments, many of these folks are asking for large up-front fees. NEVER pay up front for a loan modification.
If you have questions about how to contact your lender to see what your options are, please call us at 1-866-667-6724
3
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Hi James,
You need to contact your lender to discuss your options for fixing your payments. Most lenders are very cooperative if you can show that you have experienced some hardship that makes it difficult for you to make the new payment.
Many times this hardship is simply that the lender was not completely upfront with you regarding the terms and changes in the loan you have now.
Please read through the other comments here, many folks are in the same situation that you are. It is important that you do NOT pay someone upfront that promises you that they can help.
You can actually contact the lender yourself and negotiate a solution although I do not recommend it. Lenders seem to be much more willing to deal “straight” with third party organizations. Go to http://www.helpumodify.org for more information about how we approach the process.
If you have any questions at all you may call us a 1-866-667-6724
3
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Hi Genee,
Re: How can we find out if we qualify? Is there someone we can meet with?
The HOPE program does not go into effect until Oct. 1st, 2008.
Feel free to call us if you have any other questions about this program - there are many things I would want you to be aware of. For example, your current lender must voluntarily cooperate and forgive the amount of money you owe to current market value.
Also, there are steep mortgage insurance rates on this program as well as the federal government shares 50% of all future equity you earn.
If you would like more information, please feel free to call us at 1-866-667-6724
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I currently can’t afford to pay my mortgage and my income does’nt even make it right now I’m really having financial disabilities and i want to refinance before it goes up in oct. 2008 but since mymotgage payments haven’t been on time they tell me that I can’t i really can’t afford this home I’m single and a single mother it’s really hard would this program work for me in anyway? I’m currently behind 2 months
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I have missed 3 mortgage payments to date. will i still be considered for this program. i could really really use some relief and this is what i need.
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Hi Kapri,
There may be something that you can do to get caught up on the payments and temporarily or permanently reduce your payments so you can keep your home. This is definitely worth looking into.
Give us a call at 1-866-667-6724. There is no charge for talking to your lender to find out what options you have.
5
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Jaime,
The HOPE program is not available yet and there are quite a few factors that go into qualifying. You would still have to qualify for FHA financing and being 3 months behind might make that very difficult.
I recommend that you contact your lender immediately to find out if there are other options available to you if you intend on keeping your home.
Give us a call at 866-667-6724 and ask for John. He specializes in negotiating with lenders to help folks in your exact situation. There is no charge for contacting the lender and finding out your options.
20
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we have a auction date is it anything you can dofor us?
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Hi Katrina,
Yes! It’s not too late but you have to move quickly. Please call the office and speak with either John, Nancy or Maria - either of them can help you. 1-888-271-9767
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Oh come on, $300B to help 400K. That’s $750,000.00 per home. How many million dollar homes are encluded in this??? This is as bad as the $700B Bailout. How stupid can our representatives be. Both me and my wife have worked for 50 plus years, sometimes each 2 and 3 jobs to make ends meet but we didn’t give up.
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Im in Chpt 13 now, this is the begining of my secong year, I was out of work for 1 year, found a job and was forced to file Chpt 13 to save my home, was doing ok till I suffered some personal hardships and with my ARM going up and pay the chpt 13 I have fallin behind, I would like to modifiy my loan to a fixed rate, and begin again, but my loan company said they cant offer me anything because of the Chpt 13. I have contacted a non-profit counseling agency, who gave me a referral in my area, I am unable to make contact with this agency. I not sure what to do next, I filed 13 to save my home, and now it seems that I may lose it. If you can help me in anyway I greatly appreciate it.
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help, im trying to even do a loan mod but the bnk will not help me my first mortgage is 8.75% interest only and my second is 12% AND I DONT WANT TO LOSE MY HOME PLEASE CONTACT ME PLEASE ABOUT YOUR PROGRAM THANKS MELANIE
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Melanie,
The banks are not very helpful sometimes, at least not with homeowners. Go to http://www.helpUmodify.org for more information about what your options are. There are NO upfront fees to analyze your situation and contact your lender. You may also call 1-888-271-9767