Hope For Homeowners

iVillage Member
Registered: 07-22-2008
Hope For Homeowners
1
Sat, 10-18-2008 - 9:09am

I hadn't seen this topic discussed here yet, and I know there are a lot of posters this may help. With all the talk of the bank bailout, there was a program for homeowners that took effect on October 1st, called Hope for Homeowners.

My understanding if the program is this: You bought your house for a price, say it was $300,000, (the mortgage had to have been originated before January 2, 2008, this is one of the criteria that has to be met) now, with home prices declining, mortgage rates rising, for those with ARM's you may be having trouble affording the mortgage. You would call your lender and ask to take part in the new program. IF you lender agrees to it, that's the thing, they do not have to agree to let you participate, but, if they do, you would get a new appraisal. Say the new appraisal came in at $220,000, your new mortgage would be rewritten for that amount and the other debt would be forgiven. Another catch though, for anyone who has the piggyback mortgage, second mortgage, whatever you call it, that second lender has the right to veto the whole thing, because it's their loan that would be written off. So, there are some hoops to get through, but, if it works, then this really may help some people. After all, until this housing & mortgage crisis gets better, we are going to continue to have real problems with the economy.

There is some other criteria for the program, which is:

*The house has to be the borrower's primary residence. It can't be a second home or investment property.

*Payments are unaffordable without help.

*House payments are more than 31 percent of before-tax income

*The borrower didn't lie on the loan application, hasn't intentionally defaulted on debts and hasn't been convicted of fraud in the last 10 years.

So, if anyone looks into this program, let us know how it goes, what did your lender say?

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Mon, 10-20-2008 - 7:48am

Looks interesting -- my only fear would be the amount they "forgive" will magically show up as income the next year for my taxes!!!! OUCH!!!!


I don't know, we have a funky loan and I'm afraid to touch it because I *LIKE* have the payment options.


Finacially probably a dumb thing on my part but it's what has been helping us stay in our house for so long with all the lay-offs/reduction in income we have had to deal with since 2003.