Bush Administration Launches "Hope for Homeowners" Program

[Mind_your_head]

The HOPE for Homeowners program was authorized by the Economic and Housing Recovery Act of 2008. Since the President signed this vital legislation into law on July 30, 2008, the HOPE for Homeowners Board of Directors has worked diligently to develop and implement the program as directed by Congress. The Board was charged with establishing underwriting standards to ensure borrowers, after any write-down in principal, have a reasonable ability to repay their new FHA-insured mortgage.

The HOPE for Homeowners program begins today and ends September 30, 2011. The program is available only to owner occupants and will offer 30-year fixed rate mortgages - so the borrower's last payment will be the same as the first payment. In many cases, to avoid what would be an even costlier foreclosure, banks will have to write down the existing mortgage to 90 percent of the new appraised value of the home.

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The borrower must agree to share with FHA both the equity created at the beginning of this new mortgage and any future appreciation in the value of the home.

<snip>

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.

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http://www.hud.gov/news/release.cfm?content=pr08-150.cfm

[sakabatou]

1. After screwing the homeowners in the ass for 8 years

they're doing this? I'm not an expert, but how is this good?

[JDPriestly]

3. It will keep families in their homes without rewarding them

for taking on debt they could not handle.

[sakabatou]

5. So it IS a "screw you" to the homeowners.

[notadmblnd]

4. I don;t see where it is. if you sell your house, they get a cut

of 50-100% of the profit?

[sakabatou]

12. I don't own a home (being 21 and all)

[JDPriestly]

15. This will help you in buying a house when you are ready.

It will allow a gradual reduction in housing prices, I predict. Right now, prices are tumbling, because buyers can't qualify for credit. The prices need to come down, but in a way that does not destroy the market that makes it possible for first time buyers like you to get mortgages.

This will also prevent an epidemic of homelessness and especially of homeless families. Once people are homeless, they have a hard time keeping their lives together. They have difficulty getting to work, keeping clean and healthy. And once they are not working and not living in their homes, the government ends up having to help them out. So, it's in the interest of all taxpayers to keep people in their homes.

This is the best solution. Let the companies that gambled on the enormous rises in interest rates live with lower returns. Let the housing market prices go down, but at a slower rate and keep families in their homes. This is not only good for the families who bought these houses, but also for their neighbors who suffer as their neigborhoods deteriorate due to vacant houses that nobody can get loans to buy.

Rentals are likely to go up -- temporarily.

I saw houses for sale in Indianapolis for as little as $10,000. Want to move and help build up a depressed neighborhood? We bought into a depressed neighborhood 20 years ago and have watched it improve gradually. (It's still under gang injunction but we like our neighbors on our street.) You might be able to pull together $10-25,000 in cash from family. Could you earn a living in Indianapolis? Look for the opportunities in this. You might have your own house before you know it if you look for opportunities.

[JDPriestly]

2. Great. This is very close to a plan I proposed. It was done in the same spirit as

mine and will achieve the same goal -- keeping as many homeowners caught in the sub-prime mortgage squeeze in their homes as possible. This is great news for many, many homebuyers.

I hope this slows the crisis and helps American families and neighborhoods.

[Mind_your_head]

7. Yeah, they can stay in their homes, but if they can't keep the

profit when they sell, isn't just like renting?

[Lance_Boyle]

9. very similar to renting, yes

this denies people facing foreclosure the ability to profit personally from the sale of the asset HUD is helping them keep (they can't afford to keep it on their own without HUD help, hence the foreclosure). I see no problem with that. I would see a HUGE problem with rewarding homeowners facing foreclosure with equity in the property they can't really afford to own. This lets them stay there, but says "you're not going to profit from getting in over your head and then getting bailed out."

[RB TexLa]

11. The program is what allows them to afford their home after it absorbs the loss

They are absorbing the loss so people can stay in their homes that they are about to get kicked out of. If in 7 or 6 years the house sells for a 10,000 profit maybe the government gets 3,500 or 3,000 of it to offset what they absorbed.

The program is voluntary, if someone feels they can pay their mortgage they don't have to enter and keep any and all profit from a sell of their home.

This isn't a plan to reduce people's housing costs it's to keep people from being kicked out of their home, something witch guarantees they have no profit from the sale of the home.

[JDPriestly]

16. The sub-prime mortgages were like renting in the first place

in that they paid very low amounts in the beginning. The homebuyers caught in these loans can take it or leave it. It keeps them in their homes. If they can refinance to something better later, let them do it.

[fed_up_mother]

6. This sounds good to me.

Takes out some of the risk for us taxpayers, but if the homeowner stays in the house long enough, he gets more equity in his house.

As it is, the bank will have to write down the appraised value of the home, and someone is going to lose that ten percent. That someone is going to be the taxpayers. This sounds like it could be a win/win. They get to stay in the house, but can't make a quick profit off of us. The longer they stay and pay their mortgages, the more equity they will build in the home.

[dkf]

8. They are going to keep track of this 40 years from now?

What an accounting nightmare.

[ixion]

10. Lookout homeowners, the * cabal wants to 'help' you

better grab the lubricant...:scared:

[sandnsea]

13. There are problems qualifying for this

and there is no demand that mortgages get rewritten. Perhaps if all the progressives who are up in arms today had paid attention a few months ago, this would have been a better bill.

[Jack Rabbit]

14. From the people who brought you Healthy Forests and Clear Skies . . .

This sounds like upwardly mobile money to me.