The FHA Hope for Homeowners Program starts today!
Good news, right?
Maybe.
It depends on whether your current lender is willing to participate and it appears that not all lenders are excited to participate in this program.
According to the Assistant Secretary for Housing at HUD Brian Montgomery:
“I think lenders will be enthusiastic about the program but they have other things they’d like to do before they do a principal write down.”
According to an article in the Realty Times:
At a House financial services hearing last Wednesday, a top Bank of America executive, Michael Gross, said Congress may have unrealistic assumptions about how many lenders and investors will agree to participate in Hope for Homeowners refinancings.
“My biggest concern,” said Gross, “is that expectations for (this) program might be too high.”
In the meantime, borrowers who believe they might benefit from a Hope refinancing should start talking with their servicers to see whether there’s a chance. The law expressly makes the decision voluntary for all financial institutions — borrowers cannot compel them or take them to court to force their hands.
What are the signs that lenders are less-than-excited about the Hope for Homeowners program?
- There is no official published list of lenders who are participating in the program.
- There is no standardized method of working with these lenders, so each scenario with each lender is handled on an individual basis.
- There is growing sentiment among lenders that any other loss mitigation method (loan modification or workout) is financially better for the current lender than the Hope for Homeowners program.
Even Federal Deposit Insurance Corporation (FDIC) head Sheila Bair praised the FHA program but said that few borrowers with IndyMac, the bank that the FDIC took over in July, would use it and her “responsibility to maximize profits for the investors would probably limit the number of IndyMac borrowers who would take advantage of the Hope for Homeowners program,”according to the CNN article.
Do you think that you are a candidate for the FHA Hope for Homeowners Program?
The first step is to get on the phone with your current lender and find out if they are participating in the Hope for Homeowners Program before you start talking with anyone about refinancing your loan.
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Comments
9 Comments so far
Monroe on a Budget » FHA’s new program for homeowners started Oct. 1
[...] Mortgages Unzipped: Mixed reaction to FHA Hope for Homeowners. [...]
Brian Brady
“The first step is to get on the phone with your current lender and find out if they are participating in the Hope for Homeowners Program before you start talking with anyone about refinancing your loan.”
Reasons homneowners might want to avoid doing this are that their current lender:
(a) originally financed them through a stated income loan program; that may fail the misrepresentation test (without the borrower even knowing it)
(b) may be unwilling to refinance a delinquent homeowner (even with the HUD loan guarantee)
(c) is not a HUD-approved lender
Danyell Storey
I am a homeowner who thought I would benefit from this program. But after doing everything that I have been told to do, call this person, call that person, send documents here, then there. I find out that NO ONE is participating in this program outside of their current customers. My lender is only servicing loans at this time and is willing to take less than I owe on the loan should I be able to find a lender to refinance. So in my opinion I am on a merry go round and I can’t get off.
Justin McHood
Danyell,
Many of the people that I talk to are sharing similar experiences — except — it sounds like your current lender is willing to work with your new lender, so you may actually be in exactly the right spot to take advantage of the program.
You can call me anytime to discuss your options:
480 374 0303
Justin
terri kopcsek
I have called every helpline and web site I can find and your right, all i get is a merry-go- round of referal to someone else who can help me either, most places tell me they are just for informational help , not and actual program with funding. All this talk my is just fluff to waste time, I live in michigan and we as wage earings for lost 65% to 75% wage lost in this state from 2 years ago. All I ever hear is are you over 50-60 years old. We are working class poor with one child at home and loosing everything, there seems to be no help for families who had the income when we bought our home. We did nothing wrong , I’m sick of listing to news caster and every other person on TV say people just made wrong choices, they have Ballon Mortgages, Wrong, I have a fixed Mortgage bought in 2002 with 25% down. Any answers please email Matt.kopcsek@hotmail.com
Don Harding
I just got off the phone with Litton loan servicing co. It was related to me that they were reviewing their loans and will be sending out letters to people that qualify for the program.It was also related to me that if the investor do not want to participate in the program my only option is loan modification.I had one modification already which was of little help.
Sandra R
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Cheers! Sandra. R.
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