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FHA Hope for Homeowners (H4H) program - is it a false front?

By Wendy Cutrufelli

Real Estate Agent with Alain Pinel Realtors

December 02, 2008 12:02 PM

After a frustrating week, I am coming to the Active Rain community - specifically the mortgage professionals - for feedback and direction.

I received a referral from a current Short-Sale client. During the initial meeting with the new clients, I learned:

the clients don't want to sell their home if there is any way to save it
their lender has agreed to a short-refinance as long as they got it from a different institution
they have only been late on their mortgage once and that was because their lender TOLD THEM TO in order to be considered a "hardship" - even though the true hardship could easily be established.
The buyers qualify to a "T" under the FHA "Hope" program (I was a mortgage lender for 20 years)

As would be true with any ethical realtor, I had no desire to list a home for sale if it wasn't the best option (or only remaining option to avoid foreclosure) for the client so I started dialing lenders. I first called the Big 5 (you know who they are). None of them offer the program and, frankly, some of the "corporate hooey" that I received was hysterical.

I then went to the HUD website and pulled the 42 page list of "participating lenders" and started calling them. Much to my surprise, even the "participating lenders" don't currently offer the program because there are NO INVESTORS FOR THE PROGRAM.

To add insult to injury, during the same week I read an article from the Secretary of HUD stating that the program is a dismal failure because lenders are unwilling to take the short-refi losses. How does the Secretary of HUD not know that it is impossible to find a lender who will actually DO the program?

Do any of YOU offer the program or know a reputable lender who does?

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Michael Eisenberg

eXp Realty - Bellingham, WA

Bellingham Real Estate Guy

Is this just another government boondagle ........ what is going on?

Dec 02, 2008 12:35 PM

Wendy Cutrufelli

Alain Pinel Realtors - Walnut Creek, CA

Contra Costa Realtor

Hi Michael, Exactly my question! If you visit the HUD website, it appears that they are helping millions of homoewners with this program. Why then cannot I not find a single lender able to offer it for homeowners that meet the program criteria perfectly? Definitely smells like boondogle.

Dec 02, 2008 12:40 PM

Steve Richman

Genworth Financial - Raleigh, NC

Hi Wendy -

I work with Genworth Mortgage Insurance. We have a "work out" department that is extremely active in helping homeowners avoid foreclosure through many means including loan mods and short sales. As an MI provider we have tremendous incentive to help the work out go though and we work with just about every servicer in the country. Yes, the homeowner must have Genworth MI on their loan for us to get involved. So, please ask your customer if they have private mortgage insurance on their loan. If they do not, I am sorry that we will not be able to help in this case, but please always keep the MI question in mind as we are very active in helping families avoid foreclosure. And, we do this at no additional charge as it is part of the premium and is a primary borrower benefit of mortgage insurance. Hope this helps.

Dec 02, 2008 01:04 PM

Heidi Symms

Long and Foster - Gainesville, VA

Hi Wendy,

I too have been trying to find a lender that will participate in the H4H program. After looking at the HUD website, it made it sound as though as long as you qualified it would be no problem. I called HUD and they pointed me to the information page and the page gives you an option to find the participating lenders. I have not been able to find one that does participate.

I was given a lead to a company who may offer it in early 2009. GMAC said they don't have all the particulars to be able to offer it - I just laughed.

I am looking for any insight, direction or help on this program.

Heidi

Dec 13, 2008 01:07 AM

Steve,

If there is mortgage insurance, how do they find out who is the company?

Dec 13, 2008 01:09 AM

To the person who chose to leave a comment on my Blog without providing a name:

While I appreciate that you went to the FHA website read the posted requirements for the program, at the time I wrote this Blog, no lenders were actually offering the program even though there was a 42 page "approved lender" list on the HUD website. I called the majority of the CA lenders and did not find a SINGLE LENDER who could actually DO the program.

Feb 09, 2009 06:52 AM

Jose Castro

Property Consultants - Orlando, FL

Hello Wendy,

I can identify to the T with your situation and frustration. I try to keep an inventory of 35 to 40 listings at any given time, obviously lately the percentage of short sales is higher that the long sales, and between those short sales you come to meet families who were victims of the predatory lenders, cases that still your heart and who's only solution the be able to keep their homes is trough a program like the FHA Hope for Homeowners, H4H. I did exactly the same you did, went to HUD and FHA websites downloaded the list of approved lenders and call every company on the list. I had several meetings with the Director of my closer office of FHA here in Orlando, FL and they even gave me the underwriting guidelines for the H4H loan, but were not able to guide me to a lender doing it. Recently one of my clients call a company based on New York "Lend America" and they told them they could do the program since their loans are insured by the Government but issued directly by Lend America.

I called and talk with one of the representataives, they send me the package and told me that as long as the lender holding the lien on the property (In this case Nations Star Mortgage) were willing to accept the program they will do it. Nations Star Mortgage did not want to honor the program or any other program under Obamas Stimulus Package. We went to step one again. The link to Lend America is http://www.lendamerica.com, you need to call since there is not enough information on the face page.

Also on my quest for information on the H4H I subscribe to the HUD and FHA newsletters. On a publication from HUD named FHA OUTLOOK they report under Single Family Operations for March 1-15 that there were 69 H4H applications for this period and 1 was insured. Link to the report http://www.hud.gov/offices/hsg/comp/rpts/ooe/olcurr.pdf , If there were 69 applications for this period somebody other than Lend America is doing the H4H program. I will keep rsearching until I find a lender to help my clients, there is not money involved in doing it and I will be loosing a listing but maybe I'll have a friend for life and the satisfaction of helping a family keep a roof over their heads is priceless.

Hope this information can help you in any way, you are not alone on your quest.

Sincerely,

Jose

Apr 18, 2009 05:32 PM

FHA Hope for Homeowners (H4H) program - is it a false front?

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