Program Provides Relief to Troubled Homeowners
The HOPE for Homeowners (H4H) program assists borrowers at risk of default or foreclosure to refinance their mortgages to affordable, 30-year fixed-rate, FHA loans. Under the program, lenders take losses on existing debt obligations and new loans are set at 96.5 percent of current appraised values.
- The existing mortgage was originated on or before January 1, 2008;
- Existing mortgage payment(s) as of March 1, 2008, exceeds 31 percent of the borrowerï¿½s gross monthly income;
- The homeowner did not intentionally default, does not have an ownershipinterest in other residential real estate and has not been convicted of fraud in the last 10 years under federal and state law;
- The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the H4H mortgage;
- They must have made a minimum of six full payments on their existing first mortgage and did not intentionally miss mortgage payments; and
- `They do not own a second home.
H4H mortgages require borrowers to share the future equity in their homes with the government in return for loan modifications. Upon sale of H4H mortgaged properties, sale proceeds will pay off the H4H mortgage, as well as the shared equity and shared appreciation mortgages. The shared equity ranges from 100 percent from year one to 50 percent after year five, paid to FHA. The H4H program will conclude on September 30, 2011.
Homeowners in need should act now by calling the HOPE NOW Alliance at 1-888-995-HOPE.