As part of the Federal Governments efforts to assist homeowners who are potentially facing foreclosure a refinancing program has been created called HOPE. This FHA program allows homeowners having difficulty paying their existing mortgages to refinance into FHA secured mortgages that they can afford. For borrowers who refinance using this program, lenders will be required to "write down" the size of their mortgage to a maximum of 90% of the homes new appraised value.
Only owner occupants with no second homes are eligible for this program. Additionally, the following criteria must be met:
- Their mortgage must have originated on or before January 1, 2008;
- They cannot afford their current loan;
- They must have made a minimum of six full payments on their existing first mortgage and did not intentionally miss mortgage payments;
- They do not own a second home;
- Their mortgage debt-to-income must be at least 31 percent;
- They did not knowingly or willfully provide false information to obtain the existing mortgage, and they have not been convicted of fraud in the last 10 years;
- They must follow FHA's long-standing and strict policy of fully documented income and employment.
- Homeowners must agree to share both the equity created at the beginning of their new HOPE for Homeowners mortgage and any future appreciation in the value of their home.
- To participate, existing subordinate lenders must agree to release their outstanding mortgage liens.
If you are facing foreclosure I encourage you to act quickly to seek mortgage relief. You can do this by contacting your current lender, contacting your local HUD approved counseling agency or call the HOPE NOW Alliance at (888) 995-HOPE.
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