Coconut Creek Real Estate, Remax ParkCreek

The real estate and mortgage industries are a main perpetuator of today's downward spiraling economy. Alternative loan options were readily made available to buyers who could not qualify for conventional, fixed rate mortgages. Often times, these loans did not require a verifiable source of income or a minimum credit score which lead to people purchasing homes that they could not afford. When reality set in for these borrowers, many of them defaulted on their loan creating record losses for bank and loan institutions. The combination of record high foreclosure rates and record high profit losses for banking institutions created instability on Wall St. thus putting our economy into the situation it remains in today. This year we have seen the government pass a $700 billion dollar bailout plan and money has been injected into the failing banks and loan institutions in an effort to stabilize the economy. So we have seen what is being done to cut losses for banking institutions but what measures are being taken to reduce the rate of foreclosures in the U.S.? This three part series will cover the efforts of the government and some private lending institutions to help struggling homeowners avoid foreclosure and get back on track.

Federal Housing Administration - HOPE for Homeowners Program

This program was a part of a bill that was signed into law on July 30, 2008. This program has been in effect since October 1, 2008 and is estimated to assist 400,000 homeowners across the country. Click here for more information from the FHA on the HOPE for Homeowners program.

Basic Consumer Facts about the HOPE for Homeowners Program from FHA.gov

What is the HOPE for Homeowners Program?   

This is a new program for borrowers at risk of default and foreclosure.  The program provides new, 30-year, fixed rate mortgages that are insured by the Federal Housing Administration (FHA). It may help you refinance your mortgage into a more affordable payment. H4H is voluntary.  Both lender(s) and borrower(s) must agree to participate.

When does H4H Begin?

The program begins October 1, 2008 and ends September 30, 2011.

Who is eligible?

You should contact your lender to determine eligibility, but you may be eligible if, among other factors:

• The home is your primary residence, and you have no ownership interest in any other residential property, such as second homes. 
• Your existing mortgage was originated on or before January 1, 2008 and you have made at least six payments. 
• You are not able to pay your existing mortgage without help. 
• As of March 2008, your total monthly mortgage payments due were more than 31 percent of your gross monthly income. 
• You certify that you have not been convicted of fraud in the past 10 years, intentionally defaulted on debts; and did not knowingly or willingly provide material false information to obtain existing mortgage(s).

Who should I contact?  

FHA does not accept loan applications.  Contact your existing lender or another FHA-approved lender to see if they are participating in the H4H program. Like all FHA programs, you can only apply through a participating lender.  You may also wish to contact a housing counselor to learn more about your options.

How much can I borrow?             

Your new H4H mortgage will be no more than 90% of the new appraised value of your home with your lender essentially writing down your current mortgage to that amount. Your lender may choose not to write down your mortgage, in which case you would not be able to participate in the program.

What costs do I have to pay?     

• The new mortgage, if approved, will replace all of the current mortgages on your home.  You will not owe any payments, fees or debts on mortgages you now hold.
• You must agree to share both the equity created at the beginning of this new mortgage and a portion of any future appreciation in the value of your home. 
• In addition to an upfront mortgage insurance payment of 3%, you will pay a 1.5% annual mortgage insurance premium on your outstanding mortgage balance.  This premium will be included in your monthly payments.
• You will need to pay closing costs on the loan.  You will receive a Good Faith Estimate of these costs. 
• Will my new interest rate be lower than my current rate?            
• The interest rate for the new mortgage will be based on current market interest rates and will be provided by the lender.

If needed, can I take out a second mortgage under this program?           

You cannot take out a second mortgage for the first five years of the loan, except under certain circumstances for emergency repairs.

How can I learn more about the program and start the application process?

• Review the Frequently Asked Questions page at www.fha.gov  to learn more about the program.
• Read the Consumer Disclosure on www.fha.gov.
• Contact an FHA-approved lender to apply.  You can find a list of lenders at www.fha.gov.
• Contact a Housing Counselor.  A list of Housing Counselors can be found at www.fha.gov.

If you feel that you qualify for this program and would like to take advantage of it, please visit hopenow.com. This website has been established to connect homeowners with counselors who can guide them through the process of qualifying for and obtaining a Hope for Homeowners (H4H) mortgage. In addition to this program, a larger-scale plan to help millions of homeowners is rumored to be in the works. More details on those plans to come as they are made available to the public.

To Begin Your Search for the Perfect Home or to Sell Your Home in
the Township of Coconut Creek, Begin Your Journey by Calling 
Silva Stoyanova at (954) 673-4402. 

Related Articles:

Hope Now Expected to Help Numerous Homeowners Starting October 1^st

Hope for Homeowners Act 2008: Help For Coconut Creek Real Estate Owners

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