Hope for Homeowners mortgage assistance

The Hope for Homeowners program has been expanded and more focus is now on this federal government mortgage program. As one example, you can now slash your second-mortgage interest rates to as low as 1% for five years for some homeowners. In addition, the program now seeks to revive a Federal Housing Administration effort to help persuade banks and lenders to lower loan balances enough so that borrowers again have equity in their homes and thus have options.

The revised plan will provide cash incentives and grants to many businesses to encourage them to help borrowers. A loan officer or banker would receive up $500 upfront, plus they can get up to $250 a year, for up to 3 years, for working with the homeowners as long as the mortgage remains current. Help is also provided to homeowners from this mortgage assistance program. Borrowers who pay their mortgage on time will receive $250 a year for as many as five years.

In addition, this new plan also would allow bankers and lenders the option of asking the federal government to buy second mortgages at pennies on the dollar, thus eliminating homeowners' obligations to repay the loan However Treasury officials said they expected reductions in interest rates be a much more popular option over a buyout.

 

 

 

Terms of the Hope for Homeowners program

Also given new life with the recent announcement is the federal governments Hope for Homeowners mortgage assistance program, which allows borrowers who are underwater to lower their loan balances. Now, mortgage holders and owners who are attempting to renegotiate an interest rate reduction for borrowers through the federal government program will be required to evaluate whether borrowers and homeowners are eligible for a mortgage write-down on the principal amount owed through Hope for Homeowners program. More on Hope for Homeowners.

New refinancing options

Until just recently, the highest dollar amount that could be refinanced was 105% of the appraised value of the house. Now, with the new revised program, borrowers who are underwater by more than the prior limit may be eligible for mortgage help under the FHA's Hope for Homeowners program.

Compare that to what was happening. Under the original Making Home Affordable federal program a homeowner with a $120,000 mortgage on a home now worth $100,000 would not have been able to qualify for loan refinancing because the debt is 120% of the home's value, above the 105% maximum limit. Now, under the newly revised Hope for Homeowners program, the homeowner may be eligible for a new refinanced loan of an amount of say $96,500. The bank or lender would take the loss of $23,500.