Hope for Homeowner Options

Since we addressed that Hope for Homeowners will not help the vast majority in this blog.

Here are some alternative options for those that need help.

1. Try to get a regular FHA refinance. If you are still current this may be the best route. Even if you owe more on your home than it is worth presently, we have had great success in getting the lenders to take "short" payoffs. Some lenders will roll the deficiency into a personal loan, but this is still better because most of your debt will be at much better terms and in a financial crisis you can let the personal debt go without it impacting you as much as losing your home.
   
2. If you are currently behind, there are two potential options.
   
   1. A Chapter 13 bankruptcy. If you qualify for this route, your debts are reorganized, giving you payments based on your income. This allows the arrearage for your mortgage to be put into the bankruptcy. So now you will either have two payments, one to the trustee and one to the mortgage company OR just one to the trustee and they will pay your mortgage. If you pay on time for over a year, you may even qualify for a refinance on your mortgage with an FHA loan. You must have ZERO late payments over that time frame and fulfill other qualifications.
      
   2. An attorney based loan modification. As much as the non-profits claim you can do this for free, paying an attorney who specializes in this is a far more efficient way to get one done, with much better terms for you. We have had a HUD counselor call us in the past asking US how to help a person.
      

      
       

      Why an attorney negotiating on your behalf works better is because the lender does not want a lawsuit. If the lender is unwilling to co-operate then the attorney does a forensic audit on your loan papers looking for RESPA violations. They then go back to your lender and say, "if you don't help this client, we will sue you for all of these violations." This works MUCH better than hoping your lender will be nice. You can go here to fill out a form to see if you would qualify for a loan modification. The attorney's know which cases have a high likelihood of success, so they do a FREE pre-qualification first before they go forward with the modification process.
      

Hope for Homeowners (H4H), is it real?

The simple answer for most people out there is not what they want to hear: No.

Currently there is not a market for this product. None of the big investors are willing to buy this loan in the secondary market. None of them are underwriting this loan.

A few of the big SERVICERS are using this program with their CURRENT customers only. And that is only if they don't think a regular loan modification is better.

So you are asking: "why did the government get everyone's "hopes" up then?" That is a good question. I think the government puts out programs to make people "think" they are trying to help, I mean how many saw the press release that don't need this help?

Also the other major piece of this bill was the ability for the government to buy Fannie Mae and Freddie Mac. Instead of the bill being all about that, they threw in the "Hope for Homeowner" piece that they KNEW would not get used, but it made it look like they were trying to help.

As a lender/broker, we want to help as many people as we can. But we need the tools to do so. HUD needs to relax it's default guidelines. I have a HUD identification number, they track my defaults. If they are higher than the median number, I risk losing my HUD ID and ability to do FHA loans. If that happened I would be out of business. The same thing is happening with the secondary market lenders. Their default rates are high right now, so they have to be MORE RESTRICTIVE to whom they lend to, thus getting their default rate lower.

What are your options then? Click here to read the blog on your options

FHA Misconceptions

Watch video instead click here

1. FHA is for first time home buyers ONLY. This is wrong, you can use an FHA loan for your first home or your 10^th home. You can use it for both purchase and to refinance.
   
   
2. The government lends me the money. WRONG. The government INSURES the loan, thus allowing the lenders to help people that may not qualify for a conventional loan.
   
   
3. FHA has income limits. Nope, there are no income limits. There are however LOAN SIZE limits, and these are based on the median home price in your geographic area. Click here to find your FHA loan limits.
   
   
4. FHA will take the profit in my home when I sell.
   This one I have heard a few times, so I thought I would address it. This is wrong. An FHA loan is a mortgage just like any other. You have a balance you owe the bank, anything above that balance is yours when you sell.
   

As always any questions you can give my office a call at 866-295-9339 hit 1 to speak with one of my specially trained Mortgage Planners For Life. Or Visit our website to learn more FHAinfoCenter.