2009 Sept. REVAMPED H4H

[OH-WAMU]

U.S. plans third redo of key housing aid effort

Mon Aug 3, 2009 7:00pm EDT
By Patrick Rucker

WASHINGTON (Reuters) - U.S. housing officials are rewriting the terms of a $300 billion aid program that was expected to reach 400,000 distressed mortgage holders but has only helped one borrower so far, a senior official said on Monday.

At issue is the Hope for Homeowners program that was conceived last summer to help ease struggling borrowers out of costly loans and into mortgages that carry a government guarantee.

The program began in October, but has been bedeviled by cumbersome terms and costly red tape that forced the government to try to rejig it last year. Hope for Homeowner terms were loosened in mid-November, but have still failed to win popular support or industry backing.

So the government is starting over.

"We are completely revamping," said David Stevens, the program's chief.
The housing market has been in crisis since a five-year boom went bust in 2006 and a deep economic recession took hold in December 2007.

In late February, President Barack Obama unveiled a program meant to stem growing foreclosures and lower monthly payments for 9 million struggling homeowners.

After meeting with 25 large mortgage companies last week, officials said that 200,000 troubled borrowers have seen their monthly mortgage payments lowered thanks to government rescue efforts and 500,000 should be helped by November.

HOPE FOR HOMEOWNERS STUMBLES

Home values have dropped by double-digits in many markets and lenders must erase part of the mortgage amount in order to pass a loan off to the government under Hope for Homeowners.

Under other terms, the government would share in any future home price gains.

As conceived by Congress, Wall Street would buy many of the new mortgages created as a byproduct of Hope for Homeowners but there is no product and no investor interest.

As a senior administrator at the Department of Housing and Urban Development, Stevens is in charge of overseeing the rescue effort and managing the mortgage securities that will be a byproduct of the program.

"Once you create the securitization structure, you need to make sure there is a market for the security and that it will trade," Stevens told Reuters on the sidelines of a mortgage conference.

A modified program should be in place by early September that will aim to correct the flaws of Hope for Homeowners, officials said.

(Reporting by Patrick Rucker; Editing by Leslie Adler)


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[Chased around and around]

Originally Posted by OH-WAMU

HOPE FOR HOMEOWNERS STUMBLES

Home values have dropped by double-digits in many markets and lenders must erase part of the mortgage amount in order to pass a loan off to the government under Hope for Homeowners.

This would by far be the best thing that could happen to all of us. If my second was wiped out and we had across the board 4% loans, foreclosure would not be a word in the banks vocabulary.

I have to say that I will not be holding my breath for any of this though, banks want every dime from us.

Wait til next year as I have been saying for over a year, all commercial real estate ARMs are coming due, 1.8 trillion and another 900 billion in warehouse/store inventory on loan from the big banks. chase has 23%+ of these loans and with the job loses business are closing left and right...

[Jillian118]

hmmmmm.....sounds like more waiting for the rest of us who have already been on hold for 8 months or more!

[babbles]

As per,

"but there is no product and no investor interest".