List of Lenders Who Are Participating in the HOPE for Homeowners (H4H) Program
HUD officials estimate this program could help about 400,000 homeowners to keep their houses. Today the agency released a still-growing list of lenders voluntarily participating. HUD strongly urges homeowners in trouble to contact the servicing or loss mitigation departments of their lenders as soon as possible.
If they are unable to reach someone who can help or are uncomfortable dealing with their lenders directly, there is help avaible through approved housing counseling services.
The list will be updated on Fridays. If your lender isn’t on it yet keep checking. And stay in contact with its workout department. If you truly want to keep your home and can afford it (with reasonable modifications) then don’t give up.
And check out the recent NINJA post for ideas on retrenching and keeping that roof over your head.
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If you are trying to renegotiate your mortgage under the HOPE for Homeowners program, make sure you read the fine print. The H4H program, while giving great benefit up front, is costly on the back end. You get to keep your home and avoid foreclosure but at significant cost. If you participate in the program, you will have to split the equity in the house with the FHA when you sell your house. FHA gets a 50% share of the home’s equity for as long as you own the house even if you pay off the mortgage. If your home increases in value, you have to share the amount of the increased equity with FHA as well.
Program participants are prohibited from taking out a second mortgage unless the money is used to maintain the house. There is also mortgage insurance to pay at 1.5% of the mortgage amount. Usually, an FHA mortgage only has a .5% premium.
How do you apply? Do you contact your current lender?
Janice and Greg,
The appreciation split does decline over time to 50% of the appreciation. And as it is shared with the banks that had to write off those huge amounts in the first place that seems fair. Seconds are restricted for 5 years. Think, if your property had a $500k loan on it, dropped in value to $400k, the bank had to write off $140,000 to let you into a $360,000 HOPE loan. If your home appreciated to $600,000 in 5 years, you’d still get to keep $100,000 of that increase. Your original lender is still down at least $40,000. So everyone has to suck it up (except maybe HUD…hmmmm).
Per HUD “The borrower cannot take out a second mortgage for the 1ST 5 YEARS of the loan, except under certain circumstances for emergency repairs.
If the home is sold or refinanced, the homeowner will share the equity with FHA on a sliding scale ranging from a 100 percent FHA share after the first year to a minimum of 50 percent after FIVE YEARS. The lien holder that previously held the highest priority will receive payment up to a proportion of its original interest, not to exceed the amount of available appreciation. This type of delayed payoff will take place until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA.”
Rachel,
If your lender is on the list (and ther aren’t any really big ones on there yet) then call them and ask to get in the program. If not, call your lender anyway and ask to modify your terms. You need to show that your payment is too high (HUD’s threshold is 31% of yoru gross income) but that a reasonable modification could make it doable.