HOPE for Homeowners Guidelines

By
Mortgage and Lending with Young Mortgage & Investment Group

HOPE Guidelines have been released...

Will it Work?...

 

Borrowers Must:

  • be primary & only residence (Non-Occ. Co-Borr. not allowed)
  • be deliquent or current
  • have made at least 6 payments
  • have not been convicted of Fraud in the past 10 years
  • not have made any false statements on existing loan; ex) stated their income was higher
  • have a DTI > 31% as of March 1, 2008 (proven with W-2's, tax returns or VOE)
  • prove they did not default intentionally
  • not own a 2nd or investment home

Existing Mortgage Qualification:

  • originated on or before Jan. 1, 2008
  • FHA, Convention, Sub-prime (Fixed, ARM, interest-only, neg. am.)
  • all existing lien holders must waive all penalties & fees and release their liens
  • existing lien holders must accept a short pay-off

FHA HOPE:

  • 90% Max LTV of current value, 10% Shared Equity with FHA
  • 3% UFMIP, 1.5% Ann. MIP
  • 30 yr. Fixed
  • DTI no greater than 31/43%
  • Shared Appreciation (existing lender may recover up to 12% of write-off)

Shared Equity with FHA: When the home is sold or refinanced FHA's share is as follows:

  • Up to a year after: 100%
  • 1-2 years:              90%
  • 2-3 years:              80%
  • 3-4 years:              70%
  • 4-5 years:              60%
  • After 5 years:          50%

Although this may seem like a great opportunity for many homeowners either facing or already in default, I do not believe it will get much use. Many lenders are finding other ways to work with these people. With loan modification, the lender can extend the duration of the loan, accept a lower fixed rate or workout other options to make it affordable for these people and not have to accept a short pay-off.

The FHA SECURE program features many of the same advantages as HOPE but with lower Mortgage Insurance Premiums, no min. DTI requirement, no shared equity and no max CLTV. The 1st mortgage is limited to current FHA standards and they may obtain a 2nd to cover the difference when they are up-side down. SECURE is a better option, in my opinion, for both the lenders and home-owners. Unfortunately, this program ends December 31st.

Even if the program doesn't work out, at least this is a way to force these lenders to work with these homeowners so they do not lose their home or credit...HOPEfully

 

Comments (2)

Olan Carder
Fairway Independent Mortgage - Charlotte, NC

Wow, nice post.  I have been looking for this information.  Thank you for posting it here.  I am going to print this out and keep it handy!!

Oct 02, 2008 06:19 AM
Debbie Salmon
keller williams - Vancouver, WA

Thanks for taking the time to post this ... excellent information

Dec 06, 2008 02:25 AM