HOPE NOW for Troubled Borrowers

By
Real Estate Agent with High Profile Realty

If you're facing some tough financial times, you're under a lot of stress right now, to say the least.  It is important to know there is help out there. Troubled borrowers need to know what their options are without having to go to a variety of different mortgage lenders.

The national HOPE NOW counseling hotline, manned by HUD-approved counselors, can assess your situation and provide you with information regarding the option that might be right for you.  The counselors are are part of a non-profit organization called the Homeownership Preservation Foundation.  In mid-December, about 180 counselors assisted in over 22,000 calls received daily, and the counselor growth has increased to over 400 the first of this year.

The solution for you depends on your particular situation.  A few examples from this month's Realtor Magazine:

Owners who are able to stay current even with a rate reset

Solution:  Counseling and refinancing. Lenders may be able to take these borrowers through a fast-track process into a more affordable loan.

Owners who face default after a rate reset

Solution: Counseling and rate freeze of up to five years.  To qualify, the borrower must be eligible for refinancing (e.g., have a loan-to-value ratio of greater than 97 percent), occupy the property as a primary residence, and have a credit score of less that 660 that hasn't improved more than 10 percent since the loan orginated.

Owners already in default

Solution:  Counseling and loss-mitigation strategy, such as a short sale or deed in lieu of foreclosure.  Under the mortgage debt forgiveness law signed by President Bush December 20th, borrowers who receive debt forgiveness as part of a loan workout over the next three years won't have to pay federal tax on the forgiven amount.

The most important advice right now is if you're a troubled borrower, call the hotline right away.  The number is 888-995-4673 (888-995-HOPE) and is available 24/7.  For more on Hope Now, see http://www.hopenow.com/.

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Rainmaker
136,646
Jeff Kessler
Austin Homes, Realtors www.OwnAustin.com - Austin, TX
Broker,GRI 512.801.5666

That is a great program.  I will have to bookmark this post.  Thank you,

J.

 

Feb 08, 2008 10:01 AM #1
Rainer
32,260
Sharon Roark
Re/Max Elite - Lexington, KY
Realtor Extraordinaire in Lexington KY
Thanks for the informative post!
Feb 08, 2008 10:02 AM #2
Rainer
84,141
Joe Adams
Major Mortgage USA/Branch Manager - Montrose, CO
there is a large hole in this........  the borrower is keeping the house payment current at the cost of the other bills therefore killing their credit score and since they have lates on the credit now they can not be refi ed with FHA and since the house payment is current they can not get approved with FHA Secure
Feb 08, 2008 10:22 AM #3
Rainer
34,429
Joyce "Joy" Mahaney Brewster
High Profile Realty - Glendale, AZ

Jeff and Sharon, I'm glad you found the information informative.  Have a great day!

Joe, Of course, not everyone will be eligible for help.  Lenders estimate 1.2 million borrowers will be.  Also, these initiatives apply only to purchase-money mortgages, not home equity loans, and only to borrowers who secured financing during the height of the housing boom.  But, counselors CAN assist borrowers who don't meet the eligibility for these initiatives.  Income problems as a result of a job loss and unexpected expenses like a medical emergency continue to be the main reason people call.  Have a great day!

Feb 08, 2008 04:20 PM #4
Rainer
2,891
Joe Patterson
Princeton Capital - Morgan Hill, CA

It's too bad they have a credit sore maximum. There are a lot of homeowners who need help that cannot get it because of this criteria. I was on a conference call with a Hope Now lender and the homeowners and the lender was absolutely no help at all. 

 Joe

Feb 09, 2008 09:23 AM #5
Rainer
34,429
Joyce "Joy" Mahaney Brewster
High Profile Realty - Glendale, AZ
Joe, I agree regarding the credit score.  I believe something really needs to be done on that note.  I understand the credit risk when it's too low but, right now, it seems unusually high.  It would be nice to find a middle ground.  I understand HOPE NOW may not be able to help 100% of the people, all of the time.  But, if it could help one person, then it is worth getting the info out.  THANK YOU!!!!
Feb 09, 2008 10:40 AM #6
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Rainer
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Joyce "Joy" Mahaney Brewster

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