FHA Mortgage Refinance and Insurance Program
The Act establishes the HOPE for Homeowners Program under the FHA with a Board to administer standards and requirements for that program. The Act authorizes the FHA to insure payment of up to $300 billion of mortgage loans originated from October 1, 2008 through September 30, 2011. The program would be voluntary for eligible borrowers, and their lenders would have to agree to release the existing mortgages at a discounted payoff amount from the proceeds of a new FHA-insured loan. To participate in the program, borrowers and their mortgage loans must meet the following eligibility criteria:
Eligibility of the borrower:
The borrower must be unable to pay the existing mortgage loan and must certify that he or she has not intentionally defaulted on that loan. The mortgage debt-to-income ratio on the existing loan, using only verified and documented income in the computation, must be greater than 31 percent as of March 1, 2008;
The borrower must occupy the mortgaged property as his or her principal residence; and -The borrower must have no fraud conviction in the previous 10 years; Eligibility of the existing loan to be refinanced: -The loan was originated on or before January 1, 2008; -The existing lender(s) must waive any prepay penalties or other outstanding fees related to default or delinquency; and -The existing lender(s) must accept the proceeds of the insured loan as payment in full of all existing mortgage debt and extinguish all liens.
Officially, this program will commence October 1, 2008 and will run to September 30, 2011
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