HOPE FOR HOMEOWNERS  PARTICIPATING LENDERS

HOPE FOR HOMEOWNERS PROGRAMS

BORROWER ELIGIBILITY:

Borrowers who are current or delinquent on their mortgage are eligible for this Program, if they:

§        Mortgage must have been originated on or before January 1, 2008.

§        The program is currently scheduled to end September 30, 2011.

§        Have not intentionally defaulted on their mortgage or any other debt without hardship.

§        Are not able to pay without help and or can’t afford current loan.

§        Have made a minimum of six (6) full payments during the life of the existing senior mortgage

§        Reside in the property securing the loan being refinanced, and may not have an ownership interest in other residential real estate, including second homes and/or rental properties.

§        Not been convicted of fraud in the last 10 years which will be verified by FHA.

§        Borrowers cannot take out 2^nd mortgage for first 5 years of new Hope loan.

§        Borrower agrees to share with FHA both equity created at beginning of the new mortgage and any future appreciation in value of the home on a sliding scale: First year 100% equity for FHA to a minimum of 50% after 5 years.

§        All previous lien holders will be paid first out of future appreciation.

§        Certify you did not knowingly or willfully provide material false information to obtain the existing mortgages being refinanced under the H4H Program.

§        An aggregate total monthly mortgage payment debt-to-income ratio (DTI) on all existing mortgages must be greater than 31 percent of the borrower’s gross monthly income (as of March 2008).

§        Will be required to meet FHA’s long standing requirement that new loans be based on a family’s ability to repay the mortgage.

NEW HOPE LOANS WILL:

§        Have upfront Mortgage Insurance Premium of 3% and the annual Mortgage Insurance Premium is 1.5%.

§        Loan may not exceed a maximum of $550,400.00.

§        Must follow FHA’s long standing and strict policy of fully documented income and employment.

§        Allow lenders to extend mortgage terms from 30 to 40 years.

§        Simplify the process to remove subordinate liens by permitting upfront payments to lien holders.

§        Increase the loan to value ratio (LTV) to 96.5% for some H4H Loans whose mortgage payments represent no more than 31% of their monthly gross income and household debt is no more than 43%.

§        Continue to allow 90% debt loads to homeowners whose mortgage payments represent no more than 38% and total household debt is no more than 50%

MORTGAGE COMPANY ELIGIBILITY REQUIREMENTS:

The mortgage being refinanced must have been originated on or before January 1, 2008; Each holder of an existing senior mortgage or existing subordinate mortgage being refinanced must:

§        Waive all prepayment penalties and late payment fees (including insufficient funds fees) on the mortgage. Prepayment penalties are defined in the Federal Reserve Board’s Regulation Z (Truth in Lending), 12 CFR 226.32(d)(6);

§        Agree to accept the proceeds of the new H4H mortgage as payment in full, and

§        Release their outstanding mortgage liens.

Any type of mortgage is eligible for refinancing under the H4H Program, including conventional (prime, Alt-A, subprime) or government-backed (FHA, VA, or Rural Development), fixed-rate or an adjustable rate mortgage; and the mortgage being refinanced may have a variety of payment characteristics, including interest only, payment   option, negative amortization and/or any other exotic features. Only 1 unit properties are eligible, including condominium units, cooperative units and manufactured housing permanently affixed to realty.

DISCLAIMER: This information was summarized from websites and press releases made by the Federal Government and other sources. This summarization is intended to help you be aware of some of the program offerings. Government sponsored programs are subject to change at any time. The Hope program was originally announced on October 1, 2008 and was updated and changed in March of 2009 including to establish additional program standards as the program is implemented. So when reviewing information on Hope be sure you are reviewing the most current version. FRG encourages all distressed homeowners to review the Government’s website at www.hud.gov. You may also call FHA at 800.CALL.FHA. (Version Date 4/13/09).