UPDATE 11/18/2008 - In my Personal Opinion this program is more talk than benefit to consumers. A number of other programs have been announced that seem more likely to succeed. Your first step should be is to contact your current lender(s) to see what programs they are participating under.
I welcome anyone reading this blog entry to post any information that they have found with respect to any particular lender programs that you find available.
FHA/HUD has released information on the Hope for Homeowners (MORTGAGEE LETTER 2008 - 29)
Below you will find the Eligibility Requirements for the Borrower to qualify for the program.
If borrowers are eligible they will need their current lender to agree to accept the proceeds of the H4H as full payment on their loan. There is also a provision for Sharing the Equity and Equity Appreciation.
Because of the details of the program it is best that any homeowners speak with a lender that participates in the program.
Borrower Eligibility
Borrowers who are current or delinquent on their mortgage at the time of the refinance are eligible for this Program, if they:
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
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.
Borrowers cannot have been convicted of fraud under state and Federal laws in the last 10 years.
Similar to its validation tool for social security numbers, FHA will use an automated tool at the time of case number assignment that will check the borrower's name against several databases for convictions of fraud and an ownership interest in other residential properties. In the event that the lender receives a warning at case number assignment and believes it is in error, it must provide evidence to the appropriate Homeownership Center documenting that the borrower has not been convicted of fraud or does not have an ownership interest in other residential properties. Once the Homeownership Center evaluates the documentation, it will determine whether to lift the warning.
Borrowers must certify that they did not knowingly or willfully provide material false information to obtain the existing mortgages being refinanced under the H4H Program.
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 total monthly mortgage payment is defined as the fully-indexed and fully-amortized Principal, Interest, Taxes and Insurance (PITI) payment (this includes principal and interest, taxes and insurances, homeowners' association fees, ground rents, special assessments and all subordinate liens).
FHA recognizes that reconstructing the borrower's prior total monthly mortgage payment DTI as of March 1, 2008 may be difficult, especially as the H4H Program nears its sunset date. To comply with this eligibility requirement, lenders must obtain:
From the borrower, evidence that the prior mortgage DTI was more than 31 percent on March 1, 2008, such as pay stubs for March 2008, or a signed and dated copy of the individual 2008 Federal tax return, when available, to determine gross monthly income for that month (earnings divided by 12), or W-2s, financial records, or verification of employment from the borrower's employer.
Lenders may also rely on the borrower's signed and dated 2007 Federal tax return if the lender has no reason to believe that the borrower's income in March 2008 was materially different than the income reported on the 2007 Federal tax return.
To determine March 2008 income for self-employed borrowers, obtain a copy of the quarterly tax return that contains income stream information for March 2008 or a signed and dated Profit and Loss Statement and balance sheet that contains income stream information for March 2008 or a signed and dated copy of the individual 2008 Federal tax return, when available, (earnings divided by 12).
From the servicer of the mortgage, the borrower's total monthly mortgage payment due for March 2008, including any amounts due on subordinate liens.
For mortgages without escrow accounts, the lender should obtain tax and insurance information from the borrower. If the borrower does not provide insurance information, then the servicer of the mortgage should estimate the monthly cost of hazard insurance (and flood insurance, if applicable) based on the property's location and the rates in effect for 2008. If the borrower does not provide real estate tax information, the lender should obtain it from public records.
In Ohio please consider visiting
www.AllOhioMortgage.com
