Posted on 10/10/2008 12:10:03 PM PDT by Tennessee Nana
U.S. Senator Lamar Alexander hopes to raise awareness about a program that could help thousands of Tennesseans. He says roughly 67,000 Tennessee homeowners with overdue mortgages could use "Hope for Homeowners" to refinance their loans.
“HOPE for Homeowners" is a way for homeowners to refinance delinquent mortgages if their lenders agree to participate. This program is a good step toward boosting confidence in the housing market and helping preserve the American dream for the millions of people facing possible foreclosure,” says Alexander.
His office says "HOPE for Homeowners" is a voluntary initiative to help distressed borrowers refinance their mortgages. It was established as part of the Housing and Economic Recovery Act of 2008. Alexander voted for HERA, which was signed into law in July.Tennesseans who had delinquent mortgages in the second quarter of this year and are at risk of losing their homes may be able to refinance their mortgages if their lenders agree to participate in the program.
Only certain owner-occupants would be eligible to refinance their primary residences – no investors or investment properties would qualify. Homeowners must certify that they have not intentionally defaulted on their loans. Loans must have originated earlier than 2008. And borrowers are required to retire any debt on the home (such as a home equity line of credit).
The program is temporary and will runs from October 1, 2008 through September 30, 2011.
For more information call 1-800-CALL-FHA or visit www.FHA.gov
Hmmmmmmmmmmmmmmmmmmmmmmmmmm
Bailout PING
Tennessee Bailout PING
Maybe they should simply downsize.
If they are having trouble making payments, maybe that’s a sign.
Get outa here...
That comment has to be racist, or something
/s
:)
Hmmmmmmmmmmmmmmmmmmmmmmmmmm indeed!! Refinancing is only a small part...do they have the income to make this a long term commitment? Just curious when the rest of us get such a sweetheart deal. Oh, right we’re the ones who must pay for our homes as well as someone else’s. Never mind....
This is another example of the federal government throwing bread crumbs at mortgage holders. The terms and conditions of this program are not at all good.
Ok, I guess we will have to take them at their word. How could one prove otherwise? This just has a kick me sign taped on the back of the taxpayer.
HOPE for Homeowners
NOTE: Homeowners, contact your existing lender and/or a new lender to discuss how you may qualify for the H4H program.
The list of participating lenders is not available yet. We will publish it in the coming days.
The HOPE for Homeowners (H4H) program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. H4H is an additional mortgage option designed to keep borrowers in their homes.
The program is effective from October 1, 2008 to September 30, 2011.
As many as 400,000 homeowners could avoid foreclosure through this program over the next three years. If you are having trouble making your mortgage payments, HOPE for Homeowners may be able to help you, by refinancing your loan into a new 30-year fixed rate loan with lower payments.
How the Program Works
There are four ways that a distressed homeowner could pursue participation in the HOPE for Homeowners program
Homeowners may contact their existing lender and/or a new lender to discuss how to qualify and their eligibility for this program.
Servicers working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a HOPE for Homeowners loan.
Originating lenders who are looking for ways to refinance potential customers out from under their high-cost loans and/or who are willing to work with servicers to assist distressed homeowners.
Counselors who are working with troubled homeowners and their lenders to reach a mutually agreeable solution for avoiding foreclosure.
It is envisioned that the primary way homeowners will initially participate in this program is through the servicing lender on their existing mortgage. Servicers that do not have an underwriting component to their mortgage operations will partner with an FHA-approved lender that does.
Step 1: Cost-Benefit Analysis
Lender considerations:
Given their fiduciary responsibilities and financial obligations, lenders will assess their portfolio and perform a cost-benefit analysis to determine the feasibility of offering this program to struggling homeowners.
Affordability versus value: lenders will take a loss on the difference between the existing obligations and the new loan, which is set at 90 percent of current appraised value. The lender may choose to provide homeowners with an affordable monthly mortgage payment through a loan modification rather than accepting the losses associated with declining property values.
Borrower eligibility: Lenders that determine the H4H program is a feasible and effective option for mitigating losses will assess the homeowner’s eligibility for the program:
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 borrowers gross monthly income;
The homeowner did not intentionally default, does not have an ownership interest in other residential real estate and has not been convicted of fraud in the last 10 years under Federal and state law; and
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.
Consumer considerations:
The lender will disclose to the homeowner the benefits of the program:
Home retention,
New affordable mortgage based on current appraised value,
10 percent equity
The lender will also disclose to the homeowner the costs of the program:
3 percent upfront mortgage insurance premium and a 1.5 percent annual premium,
Equity and appreciation sharing with the Federal government, and
Prohibition against new junior liens against the property unless they are directly related to property maintenance.
Step 2: Negotiations Between Borrowers and Lien Holders
If the lender refinancing the loan does not hold the senior mortgage lien, it will need to secure an agreement from the existing lien holder to waive all prepayment penalties and default fees on the existing loan and accept the loan proceeds from the H4H loan as payment in full. The loan amount (including the 3 percent UFMIP) for the new H4H loan cannot exceed 90 percent of the current appraised value of the property.
The lender will engage existing subordinate mortgage lien holders to extinguish all subordinate liens on the subject property. To entice subordinate lien holders to participate in the negotiation process and release their liens, FHA has the authority to share its future appreciation entitlement with them.
Step 3: Originating an H4H Mortgage
The lender will qualify the homeowner for the new H4H mortgage using the guidelines established under the terms of the program’s unique statutory requirements, ensuring the homeowner has the capacity to make the new payment on the H4H mortgage in a timely manner.
During underwriting of the loan, the lender will calculate the future appreciation interest amount for each subordinate lien holder in accordance with instructions provided by FHA.
At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD’s appreciation share.
Following funding of the loan the lender will record – in addition to the typical security instrument and note for the first mortgage – a shared equity note and mortgage (SEM) and a shared appreciation note and mortgage (SAM). These mortgages will be serviced by FHA.
The lender will also submit the new mortgage for insurance to FHA, certifying that it has been originated, underwritten and closed in accordance with the H4H program guidelines.
Step 4: Fulfilling H4H Mortgage Obligations
Upon sale of the property, the homeowner will use their sale proceeds to pay off the H4H mortgage as well as the shared equity and shared appreciation mortgages.
FHA will provide instructions to the settlement agents regarding subordinate lien holders who are entitled to a portion of any appreciation. The lien holder that previously held the highest priority will receive payment up to the full dollar amount of its interest, not to exceed the amount of available appreciation, and so on, until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA.
In instances where the homeowner failed to make the first payment on their new H4H mortgage, the H4H statute prevents FHA from paying claim benefits to anyone holding the mortgage.
http://portal.hud.gov/portal/page?_pageid=73,7601299&_dad=portal&_schema=PORTAL
Lamar!
People who sacrifice to make their mortgage payments get jack sh$t. People who went to Disney (for the second time) and have a boat in the yard next to the new 2 suv’s get bailed out.
BS
BS
BS
BS
ARGH!!!!!!!!!!!!!!!!!!
If you can’t afford the house get the f&^* out and get a go back to renting till you can afford a smaller one.
I hear ya! I moved to TN only recently and wonder how Corker & Alexander could have gotten elected esp Corker. Then I recall the Sasser/Gore days and all wonder disappears. The only sane one in the bunch is Duncan. Wamp needs to get a real job and stop inflicting himself on us.
Well I guess this is good news for the illegals who managed to buy 200,000 dollar homes when they can’t even speak English.
I read some Realtor news today saying that there are 75.5 million mortgages in the country and 1 out of every 6 are either in foreclosure or about to enter. This is 12.5 million homes. And, according to the report yesterday, 5 million of those are illegals. Really ticks me off!
So if I lose my job now and then have to default I’m out of luck. Sure that’s fair. This whole thing sucks.
Barf Bump!!!...:0/
HOPE for Homeowners is a voluntary initiative to help unwitting people become more dependent on government and indoctrinated into socialism.
Duncan is the most Conservative Congressman in Tennessee as well as one of the more so in the House. I'd like to see him take Corker or Alexander's seat in the senate. It would be a major improvement.
The northern part of Wamp's district {Anderson County} has an over abundance of illegals. This includes the city of Oak Ridge and the town of Clinton. Any housing projects close to an Industrial Park here and you'll see a plenty of them. Many drive shinny new Yukons and stand in line at the Western Union counters in the stores.
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