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Information on The Hope for Homeowners Program - The Bills.com Blog
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Information on The Hope for Homeowners Program
Thursday, Nov 6, 2008
Question: Hello Bill - do you know much about the new Hope for Homeowners program? We read a lot about it earlier this month and thought we might qualify. We haven't contacted our lender about it yet, but any general advice or experiences you can share about the program would be helpful. Thanks
Answer: Hope for Homeowners (H4H) - the program primarily calls for voluntary principal reduction to 90% of the current home value, from lenders and servicers and from what we’ve learned (industry news, contacts at large national lenders, secondary market contacts, loan modification firms) this has not been happening. Unless it’s been forced on them (as in the case of Indy Mac, Countrywide and recently Chase) lenders are not ready to give principal reductions. There is a section in the H4H program that does call for mandatory principal reductions by lenders, on the condition that the homeowner makes the case that the lender and their investors will recover more from a reduction in principal to 90% of the home’s current appraised value, than from a foreclosure. It is up to the homeowner to make this case. The FHA (who governs the H4H program) just
announced that in the first two weeks after the launch of H4H on October 1st, there were 42 applications from lenders. That number, along with the overwhelming anecdotal market evidence, clearly shows that there is no meaningful activity on reductions. Larger lenders experienced large call volume in the week immediately following the announcement of H4H, but apparently those callers have not been helped.
Other Options - in addition to H4H, many homeowners may be eligible for a standard loan modification, where they receive a fixed rate payment plan for the next five years (or a variation of this). This can be done through a refinance (FHA Secure program) or more commonly, by contacting the lender and proving that the current payment is unmanageable.
Other Options - in addition to H4H, many homeowners may be eligible for a standard loan modification, where they receive a fixed rate payment plan for the next five years (or a variation of this). This can be done through a refinance (FHA Secure program) or more commonly, by contacting the lender and proving that the current payment is unmanageable.
This adjustment of rates and terms seems to be picking up quite a bit of steam, and in the wake of the recent Indy Mac and Countrywide settlements, an increasing number of homeowners are benefiting from this development. At this point, we feel that contacting your lender and making your case for reduced interest rate or an extended loan term is the most effective option. Other options include a refinance, deed-in-lieu or sale of the house.
We will continue to monitor this developing situation. Keep an eye on the Bills.com home page as we will soon be launching the Bills.com Borrower Relief Center, which will contain tips, advice, news updates and links to other relevant sites.
Thanks for your question.
Best,
Bill
www.bills.com/blog/
We will continue to monitor this developing situation. Keep an eye on the Bills.com home page as we will soon be launching the Bills.com Borrower Relief Center, which will contain tips, advice, news updates and links to other relevant sites.
Thanks for your question.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Terrence on Thursday 6th November 2008 17:58
This is great information - please keep us updated as to when you launch your new Borrower Relief Center. Thank you Bill.
2. Posted by Tim on Sunday 4th January 2009 06:10
Yes, the Bush administration is not doing anything to help people, other than the B3 - Bank Buddy Bailout, by Paulson, the former bank exec, soon to be one again, in which he bailed out his bank buddies for selling toxic loans, but not requiring that they work with people in any meaningful way, and they don't. Meanwhile, Bush, who like his Dad let the country's economy drift off into oblivion while he sat having fun and saying "What problems?", each of who I voted for their first time running, being the pawns they were and catering to those who put them there.
3. Posted by Tom on Sunday 4th January 2009 06:14
I called the Hope Program. A truly bogus program. After long waits, they referred me to the web site, which then referred me to one of the workout companies just seeking business. This company said they can't do much on helping with delinquent loans, but would be happy to work iwth my credit card company - the easy money for them - and that I shoulod budget better.
4. Posted by Bill on Sunday 4th January 2009 16:56
Bummer. It is unfortunate that Hope for Homeowners has not done a perfect job for everyone, and we do hear quite a few complaints about lack of service and lack of direction from them. Good luck and hang in there.
5. Posted by Iona Johnson on Monday 19th January 2009 19:33
I'm about to re-fi with Countrywide for a cost of about 2,500. I heard from my sister that I can get a rate reduction through the HOPE program for free. This, especially since I lost my job 1-1/2 yrs ago and my husband has had several strokes and heart attacks. I fell behind 5 months in my mortgage payments in o7 but with help from family caught up through a re-payment plan and became current in Aug of 08. Countrywide has not mentioned anything about a free reduction in my rate. Can I really get free help with this? THANK YOU!!!!!!!!
6. Posted by Bill on Tuesday 20th January 2009 14:24
You need to ask Countrywide if they participate in the program. For program details and eligibility, see here: http://portal.hud.gov/portal/page?_pageid=73,7601299&_dad=portal&_schema=PORTAL