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hope for homeowners

Congress passed the bill for the “Hope for Homeowners” program to go into effect during the summer session. This bill is good news for some of those who have trouble paying off their mortgages and are in an essence on the bring of foreclosure.

The “Hope for Homeowners” program has been earmarked to receive enough funding to help at least 400,000 potential foreclosure victims.

Essentially the program will help refinance mortgages for those who can’t seem to keep up with their mortgage payments and are on the brink of foreclosure. The FHA will provide them with a secured loan refinanced in a way they can afford. HUD has given specific requirements for those who would qualify for this type of assistance.

• You must be an owner occupant – Meaning that you must live in the house that you are paying the mortgage on. No assistance will be provided to investment property owners.
• They own no other investment properties or second homes.
• They are unable to pay their existing mortgage on their own.
• Assistance will be on a first come first serve basis.
• As of March 2008, their total monthly mortgage payments due were more than 31 percent of their gross monthly income.
• They certify they have not been convicted of fraud in the past 10 years, intentionally defaulted on debts, and did not knowingly or willingly provide material false information to obtain their existing mortgage(s)

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HOPE for Homeowners also includes the following provisions:

• The loan amount may not exceed a maximum of $550,440.
• The new mortgage will be no more than 90 percent of the new appraised value including any financed Upfront Mortgage Insurance Premium.
• The Upfront Mortgage Insurance Premium is 3 percent and the Annual Mortgage Insurance Premium is 1.5 percent.
• The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.
• The existing first mortgage must accept the proceeds of the HOPE for Homeowners loan as full settlement of all outstanding indebtedness.
• Existing subordinate lenders must release their outstanding mortgage liens.

To find out more information about the Hope for Homeowner’s Program you can take a look at HUD’s website

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