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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. Participation in the Hope for Homeowner's Act is voluntary. Both lender(s) and borrower(s) must agree to participate.
You should contact your lender to determine eligibility, but you may be eligible if, among other factors:
The FHA does not accept loan applications for the Hope for Homeowner's Act program directly. Borrowers seeking help should contact their lender, another FHA-approved lender, a housing counselor, or an attorney to apply or learn more about their options.
If you are approved for a new mortgage under the Hope for Homeowner's act, the new mortgage will replace all of the current mortgages on your home. You will not owe any payments, fees or debts on mortgages you now hold. However, 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. Finally, you will need to pay closing costs on the loan. You will receive a Good Faith Estimate of these costs.
If you are approved for a H4H mortgage, your new mortgage will be no more than 90% of the new appraised value of your home with the lender essentially writing down your current mortgage to that amount.
You cannot take out a second mortgage for the first five years of the loan, except under certain circumstances for emergency repairs.
The interest rate for the new mortgage will be based on current market interest rates and will be provided by the lender.
Processing time will vary, but usually takes approximately 60 days. Consult your lender when you apply.
There isn't an income restriction, but you will need to demonstrate that you have sufficient, steady income to make the new H4H mortgage payments.
If your lender has started already started foreclosure proceedings, you may still be able to obtain a Hope for Homeowner’s Act loan, though it depends somewhat on which stage of the foreclosure process you are in. Talk to your lender immediately for more detailed information.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified foreclosure and alternatives lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local foreclosure and alternatives attorney to discuss your specific legal situation.