Information on Hope for Homeowners

First, if anyone ever wants to find out the "latest" information pertaining to FHA's or HUD's programs, you can go to HUD Letters. The section that will most likely apply to what you are interested in would be "Mortgagee Letters". Under this section is where you will find very detailed information on HUD/FHA's newest program called Hope for Homeowners. It's a 13 page document but the information is very informative and will answer most questions on this new program being offered.

http://www.hud.gov/offices/adm/hudcl...es/08-29ml.doc

I'll point out some (not all) eligibility requirements of this program:

· Borrowers who are current or delinquent on their mortgage at the time of the refinance are eligible for this Program, if they:

o Have not intentionally defaulted on their mortgage or any other debt (Intentionally defaulted means the borrower had available funds that could pay the mortgage and other debts without hardship. Debts subject to a documented bona fide dispute may be excluded.) AND

o Have made a minimum of six (6) full payments during the life of the existing senior mortgage (full payment is defined as what was acceptable to the lender for meeting the monthly payment obligation under the terms and conditions of the mortgage).

· Borrowers must reside in the property securing the loan being refinanced, and may not have an ownership interest in other residential real estate, including second homes and/or rental properties.


· As of March 1, 2008, the borrower’s aggregate total monthly mortgage payment debt-to-income ratio (DTI) on all existing mortgages must be greater than 31 percent of the borrower’s gross monthly income.

· The mortgage being refinanced must have been originated on or before January 1, 2008;

· Each holder of a mortgage being refinanced must:
1. Waive all prepayment penalties and late payment fees (including insufficient funds fees) on the mortgage. Prepayment penalties are defined in the Federal Reserve Board’s Regulation Z (Truth in Lending), 12 CFR 226.32(d)(6);
2. Agree to accept the proceeds of the new H4H mortgage as payment in full, and

3. Release their outstanding mortgage liens.

· Only 1 unit properties are eligible, including condominium units, cooperative units and manufactured housing permanently affixed to realty.

Some details of the program are:

Term and Interest Rate on the H4H Mortgage Only 30-year term, fixed-rate mortgages may be offered under this Program. While the interest rate on the new mortgage is to be negotiated between the borrower and the lender, lenders should offer rates that are commensurate with interest rates on similar types of loans, if any (not considering the annual premium in that comparison).

Mortgage Insurance Premiums
The Upfront Mortgage Insurance Premium (UFMIP) is 3.00 percent of the base loan amount (loan amount excluding UFMIP) regardless of the loan-to-value (LTV) ratio. The Annual premium (collected monthly) is 1.50 percent of the base loan amount.

Calculating the Maximum Mortgage Amount
The amount of the H4H mortgage may not exceed a nationwide maximum mortgage limit of $550,440. The LTV of the H4H mortgage is limited to 90 percent of current appraised value of the property, including the UFMIP. The proceeds from the new H4H mortgage will be applied to the existing senior mortgage, and extinguish all mortgage-related debts under all existing mortgages including:

· Advances by existing lenders/servicers for taxes, hazard insurance and/or mortgage insurance; and

Out of pocket third party legal expenses of the existing lenders/servicers associated with foreclosures and preservation and protection (See Mortgagee Letters 2007-03 and 2005-30)