HOPE for Homeowners H4H

[AmericanNightmare]

Has anyone had any success with this new program? I know it's only been a few days since it came out, but has anyone made any progress with their lender?

[cutlass]

I would like to know this too

[jennscrzy]

I would like to know as well. Currently I am trying to get ahold of the guy from Hope Now to see if he can help with this..I really wish I had a different person helping me, this guy seems like he doesnt want to waste his time

[borclu]

Hello. I tried calling so many people on this but no luck so far. I called the HOPE line first and they did not know about it. Instead they told me not to pay for my credit cards but pay for my house instead. Great IDEA!!!! Then I called FHA approved agencies in my area. No answer from any of the messages I left. I reached one person who gave me a number of a person and that person asked for a BIG fee to modify my loan but not with the HOPE program. So if anybody got a hold of the right person to talk to please inform us.
Thank you...

[Maurice Bedard]

borclu,


Have you tried asking Countrywide if they are offering the FHA program and if they are to see if you would qualify?

[Worried in Florida]

I qualify for the new FHA loan Program with ONE problem . . . I have a Countrywide 1st and Second. SInce they are both Countrywide, could FHA look at that as ONE LENDER, assuming the Second (also w/Countrywide) is willing to forgo its 2nd position which it would have to in any other scenario. So, who should I ask to see "If the 1st and 2nd are with the same lender - does that automatically disqualify you from the FHA Program?"

Thanks.

[borclu]

Cat Hi. I`m a little confused. I have tried to get a loan modification from Countrywide in the past and they had said I did not qualify because of my expense /income difference. Then as I informed above in the search for this HOPE program I had called the 1800HOPE line and they had taken my financial information and they said they would submit it to my bank. This was in August. Yesterday I called Countrywide to ask them about the HOPE4 HOMEOWNERS BILL and as soon as I gave them my loan number they said my case was forwarded to their hardship team. I called the hardship team (they are now called HOPE team) its a 3rd party. THe HOPE team said they could not see my details because Countrywide did not send them tha package yet and also I am supposed to get a package from Them by FEDEX regarding a loan modification. So I guess this means that they will send me a loan modification offer. I don`t know if I will like that or not because the previous re-payment plans offered by Countrywide were higher monthly payments then I already have.

Question is what do I do now? Should I still call Countrywide and ask about the HOPE4Hopmeowners bill? Or Should I wait for this fedex package and see what that brings? And now I read about the DECEMBER bill.. I`m so confused

[Maurice Bedard]

o.k..................you are referring to three different options here.........which is why it is confusing...............and they all have similar names.

HOPE is 1-888-995-HOPE and they help you achieve a modification (which you had mentioned you were turned down for)

For Hope for Homeowners (which is a new FHA loan being placed on the property for which your current investor would need to accept a short payoff, that is what you would need to ask Countrywide...........as long as you have only one loan on the property.......they are looking at this options first.........so that would mean that they would refi you into this program) and they are doing this now........

The program that is starting on Dec. 1st also has criteria that needs to be met and there is a separate number for this...........and it is called the Homeownership Retention....and you would need to call.......for information about that and if that is an option.
1-800-669-6607



If the FedEx is on the way you will have time to see what it is..............

[borclu]

Thank you. I will post the outcome.

[JoJoJodyJo]

Hope For Homeowners (H4H) is a crock. It will not help the majority of us because if we had the cash required to utilize this program, we wouldn't be in foreclosure in the first place.

Yes, it will help people who are upside down on their loans, IF they have access to cash (lots of it), and can afford a fairly hefty mortgage payment.

Here are some facts: FHA will allow a homeowner to refinance up to 90% of the value of their home (up to a maximum loan amount of $550,440) if the current lender agrees to waive the deficiency balance. If there is a second trust deed, it is wiped out. This 90% includes the Up Front Mortgage Insurance Premium (UFMIP), which will be 3.00% for the H4H program. So in actuality, the maximum loan is 87% of the appraised value and FHA gets the other 3%. This means that the homeowner must pay 13% of the property value plus closing costs and impounds as FHA requires the taxes and insurance be included with the payment. The monthly insurance premium (MIP) is 1.5% and the Up Front MIP (UFMIP) is 3%, compared to monthly MIP of .55% and UFMIP of 1.75% for a standard FHA loan (the standard monthly was .5 and UFMIP 1.5% until recently).

On top of the increased insurance premiums charged by FHA, the lender will charge points based on several factors – for example, there is a 2.5% hit for the FHA Secure loan (I imagine the hit for the H4H loan will be much higher), and hits ranging anywhere from .5% to 2% or more for your credit score, which will be very low since you are late on your mortgage.

So let’s say Joe Blow has good credit and wants to buy a home with an FHA loan. Joe’s interest rate on a 30-year fixed rate mortgage would be 5.5% at par (0 points for the rate). If the sales price is $300,000, Joe’s total cash requirement (including down payment, closing costs, and impound account) will be about $19,600, the loan amount will be $291,000 ($295,365 with the UFMIP of 1.75%), and Joe’s total monthly payment will be around $2,211.94.

Now let’s say Henry Homeowner uses the H4H program to save his home which is worth $300,000. Henry’s loan amount will be $261,000 ($268,830 with the UFMIP of 3%). Total cash to close will be about $49,300, interest rate 7%, and Joe’s total payment will be approximately $2,503.41 (even though it’s a much lower loan amount) per month. This is because of the increased FHA insurance fees, and points charges due to Henry’s credit score and this loan program.

Now let’s say Henry wants to get the standard FHA rate of 5.5% to bring his payment down. In that case, Henry will pay an additional 3.5% in points for his credit score and the H4H program (I’m basing this on the 2.5% fee for the FHA Secure program and a 1% fee for a credit score in the 500 range - the H4H cost may be much higher). So to get the same 5.5% Joe is getting on a regular FHA loan, Henry’s cash requirement just jumped to $58,500 with the H4H loan. But even though Henry got the same 5.5% as Joe and Henry’s loan amount is smaller, Henry’s payment is $2,241.27 compared to Joe’s of $2,211.94 because Henry is paying 1.5% monthly MIP and Joe is paying .55% monthly MIP.

This program simply won’t work because not only do we not have the cash lying around that will be needed for this program, many times our payments will actually increase instead of decrease. Not only that, but we have to somehow talk our lenders into “magically” erasing our deficiency balances and making our seconds disappear. Yeah, right.

This is another load of BS wrapped up in a neat little package to make us all believe someone is actually doing something to help us. All I know is that if I had access to $50,000, I wouldn't be in foreclosure!

[JoJoJodyJo]

I tried to add this to my other message but unfortunately I passed the five minute mark so I can't edit my post any longer.

I did some more research and this is more on the H4H program (aka Hoodwink 4 Homeowners)

FHA will place a lien against your property in second position called a Shared Equity Mortgage (SEM) which is the difference between the appraised value, and the original principal balance of the H4H loan. So if your home is worth $300,000 and you owe $350,000, the SEM will be for $50,000 which gets paid back to FHA when you sell or refinance. This will be recorded as a second trust deed against your property.

On top of this, there will be a lien in third position called a Shared Appreciation Mortgage (SAM) which says that you will share your future equity with FHA as follows (and on top of the SEM):

During Year 1 -- 100% of equity is paid to FHA
During Year 2 -- 90% of equity is paid to FHA
During Year 3 -- 80% of equity is paid to FHA
During Year 4 -- 70% of equity is paid to FHA
During Year 5 -- 60% of equity is paid to FHA
After Year 5 -- 50% of equity is paid to FHA (that’s right boys and girls – that’s FOREVER)

So let’s say FHA gave your lender $50,000 for you to use the H4H program and 25 years later, your home has increased substantially so you sell and net $250,000 (after the first trust deed, SEM, and all seller’s costs are paid off). You now owe FHA $125,000 despite having already reimbursed them for the initial $50,000. This is in addition to the $69,111 more in monthly MIP that you paid at 1.5% compared to Joe at .55%, and the $2,738 more in UFMIP you paid at 3% compared to Joe’s 1.5%. So the total amount you will give FHA in this scenario for the $50,000 they used to bail you out is $246,849 ($196,849 MORE than they gave your lender on your behalf). $50,000 + $69,111 + $2,738 + $125,000 = $246,849. Seems to me that the increased monthly MIP and UFMIP would have been more than sufficient to pay FHA back with interest for the $50,000 used to bail you out. But apparently they are not satisfied with just being reimbursed, I guess.

Finally, for the first five years of the H4H loan, you may not take out a second trust deed except for the purpose of repairs required for health and safety issues. If you do take a second for repairs, the total loan to value of all the loans may not exceed 95% of your property value, and the trust deed will actually be in fourth place as FHA will not subordinate their positions. After the first five years you may take out an equity loan; however it will be in fourth place as FHA will not subordinate their positions – ever.

[dwdrag]

Everything is correct except the SEM portion, the SEM ortion is the initial equity (10%) it has nothing to do with the your original loan/current balance. In your example the SEM would be $30,000. This is $300,000 appraised value, 90% loan value is the 1st lien positionn, the SEM is the second lien position and finally the SAM with graduated equity split is the SAM. The reading does state that HUD in the SAM may agree to split the SAM with the current lien holders in order for them to release or sign off to make this happen.

[JoJoJodyJo]

Dwdrag - I stand corrected. I misread the document and misunderstood that the borrower is paying the 13% plus giving FHA a note and sharing 50%. That's what happens when you tried to understand this type of stuff when you have husband and teenagers who won't leave you alone. :~)

Upon reading the actual SEM Note, I realized that the SEM is a silent second and the borrower doesn't have to come up with the 13% in cash (they still have to pay their closing costs and impounds). Remember the LTV is 90% including the 3% UFMIP so the actual loan to value is 87% on the base loan amount, 90% on the total loan amount which includes the UFMIP.

So in actuality, the borrower is taking a new first at 90% LTV with a silent second for the difference, then throwing in half their future appreciation. I think it's ridiculous that the borrower has to pay 50% of their long term equity on top of the increased mortgage insurance required by this loan, especially since the lenders don't get a full reimbursement.

[Worried in Florida]

For what it is worth . . I deeply appreciate this debate.

I, for one, must say that the 90% current appraisal value is a SUBSTANTIAL decrease in my scenario - at a time when finding steady Construction work in FL is very difficult. So getting a 50% DECREASE in my Principle balance is something I do not mind paying for.

The biggest down side in my situation are the higher Insurance fees but . . . otherwise, its no house at all.

As you can tell, . . . I appreciate the discussion.

[jet-a]

If someone participates in this program, and they refinance at anytime, does the lien for the shared appreciation stay until the house is sold? or does it disappear once the refi is completed?

I am also thinking a lot about it since it also would be a significant difference for me & my payment.

Thanks!

[dwdrag]

My question is who does the negotiating with the current lender and gets them to waive or write off the difference. Is it the mortgage holder, the new lender, a 3rd party? So many questions and very little direction.

[Worried in Florida]

Dwdrag,

There is ALOT of information on this H4H Program on the FHA website. I have spent hours on it and continue to learn something every time I visit. Today I found all of the ACTUAL loan Origination documents that your FHA lender will give you at closing! Here is the LINK to those :

http://portal.hud.gov/portal/page?_pageid=73,7606147&_dad=portal&_schema=PORTAL

They are the REAL DETAILS if you prefer that over the Summary sheets and Facts Summaries found all over the web site.

I have an FHA Lender in my area who is getting 6+ phone calls a day to do this Loan Program. I am dropping off my package to him this weekend or Monday - depends on if I can get it all done!!

My Lender is Countrywide and they will negotiate with FHA directly once I am approved.

FHA is "encouraging" lenders (CW) to accept the loan write-off . .. and CW has already told me they are willing to do this for those who qualify.

We will see . . it will be one hell of a fight in the months ahead.

Good Luck to you.

Worried in FL

[Worried in Florida]

Dear jet-a,

The SAM (Shared Appreciation Mortgage) and the SEM (Shared Equity Mtg) BOTH stay on the home until it is sold - could be 1 year or 50 years. It is registered at your local Courthouse like a Lien and does not come off - ever - until paid. YOu cannot refi either without paying it off. There is a time limit before you can Re-FI and still keep the home. I think it is 5 years, but it is all on the FHA website. I spend hours on that site.

Hope this help,
Worried

[jet-a]

Dear jet-a,

The SAM (Shared Appreciation Mortgage) and the SEM (Shared Equity Mtg) BOTH stay on the home until it is sold - could be 1 year or 50 years. It is registered at your local Courthouse like a Lien and does not come off - ever - until paid. YOu cannot refi either without paying it off. There is a time limit before you can Re-FI and still keep the home. I think it is 5 years, but it is all on the FHA website. I spend hours on that site.

Hope this help,
Worried

Hi WIF,

I've been on the site a lot too, but was having trouble figuring it all out LOL

So that does makes sense from how I understand it. Lets say you do the H4H. The mortgage is written down to $100,000. After 3 years the value goes up to $130,000 and you decide to refinance. If I am thinking correctly, you would owe the government the amount of appreciation minus the closing costs for the new loan (~25,000 or so) and that would take care of the SAM.

Is that how you interpret it as well?

Thanks!

[2blessed2stress]

The FHA lender I found is requiring I pay the appraisal fee up front ($300-400). Does that sound right?

[AmericanNightmare]

I would call FHA or another lender and find out what they say.

[2blessed2stress]

I called FHA and they had no clue.

[Worried in Florida]

Yes, you have to pay your own appraisal fee which I just did last weel - $300. ONE IMPORTANT FACT: FHA requires that the Appraisl be NO OLDER than 90 days at closing. If it is older than 90 days, the broker (or someone) must attach a "form" to explain that the appraisal is older than 90 days due to uncontrolled delays. (That should be fairly easy with the H4H Program - lol!)

WIF

[yymike]

Does anyone know where I can get a copy of the loan docs for the H4H loan? I want to read the verbiage in it, but I can't seem to find it anywhere....

[JORDAN63033]

Countrywide is offering a new program starting 12/1, it's on the front of there web page. A lot of things are changing for CW homeowners to help. We were Blessed to modify but now they seem to really be willing to help

[pepper61]

All I know is that I tried (last week) to help my sister who is facing foreclosure proceedings to begin any day now. After repeatedly requesting a loan modification "due to the recent Bank Bailout program" by the govt., she was "offer" a loan modification deal from Washington Mutual. The deal included a 30-year fixed at 6.25% at the supposed appraised value of $525,000. The problem is that her property's current market value is approx. $200,000 and even at real estate's peak a couple years ago, was only worth about $445,000 (Max.). I believe the problem with this bailout is that the Govt. has given the bank an "option" to renegotiate these mortgages, and should MANDATE that they renegotiate. Am I wrong? How many more of us could be in this same situation soon? Scary.

[JORDAN63033]

I'm not sure what the deal is with the bail out, Continuing to thank God for Loansafe and Naca, We saved our home.

Point, Countrywide is helping is homeowners (nothing to do with the bailout at this time) They have really changed the way they do modifcations to help it's homeowners. If you call 1-800-669-6107 they will help, even if you had a previous modification. It took us from September to June to do a modification, God blessed us to redo recently. Call countrywide they can HELP

[cahomeowner]

The Hope for Homeowners program has given me some "HOPE" that I might be able to avoid losing my home. I got caught up in the hype and overextended myself by borrowing against my primary to purchase rental homes. I had new equity in all of the properties before the subprime meltdown. Now I am short selling all of my properties and at risk of losing my primary home. My stomach turns every time I think about the mess I am in and the risk I put my family in.

I noticed a couple of things about this new H4H program that just doesn't work out for me. I currently have a 1st, 2nd and 3rd with Wells Fargo. I have no problem sharing the equity if I can save my home.

Refinancing at 90% of the current market value sounds good but then you have to factor that it is a Principal & Interest Loan with origination fees plus PMI not to mention there is a 550K loan limit. Most of us have interest only loans so with all the things factored in my payment actually increased.

I hope they consider the high home prices here in the bay area and raise that limit accordingly. Also if there was a 40 year loan product that would help a lot of us afford to keep our homes. I pray the government figures out the holes in the H4H program and acts quickly.

I don't see how it could be productive to foreclose on homes and continue driving homes values down. Figuring out a way for people not to lose their homes is going to instill confidence and help turn things around.

Countrywide just announced their new Home Retention Program which seems to incorporate the H4H program. I hope other banks follow and take the proactive measures to stop the foreclosures.

perhaps we may see more programs after the election. help is needed and needed badly. The only way I am going to be able to stay in my home is through a principal reduction. Is that even possible through Wells Fargo?

[Maurice Bedard]

cahomeowner,

Welcome to the forum and thank you for joining...............
The program has already been finalized and began on October 1st.....
Unfortunately with the program you can not own more than one home either.................

see page 20 of 34

here are the final rules for the H4H program..........

H4H Final Rules

[Bert C]

Cat, a few posts back you make mention of a program becoming available on the 1st of December. Can you provide some details? Is this for anyone? I haven't heard of anything. Thanks.

Bert

[mayela]

Well.... I called a local approved mortgage company I got from the FHA website.
The gentleman told me they still cannot originate these loans because they have not received final guidelines from FHA.

Has anyone had any luck with a mortgage company?

[AmericanNightmare]

After inquiring about H4H and saying they were going to participate, my lender told me to call HUD, which I did. I was then referred to a Springboard case worker who forwarded my monthly expenses/income back to my lender. My lender requested a hardship letter and my monthly expenses/income which I just mailed today. How many hoops do to I have to jump through? I feel that FHA is inept and my lender is waiting for bail-out before acting.

[garyys]

Mayela, I am working with a local lender from the list. They told me they are waiting on the SEMS, SAMS (I don't know if this is the right acronym, but they are the forms for the agreed appreciation, and equity). I have sent them everything (they sent me a list of documents they will need), waiting to hear back at this point.

[mayela]

Do you mind sharing the lenders information. My local lender wont take any information will not originate any loans untill they get the guidelines so they say?

[garyys]

Anyone know how I send Mayela a PM, I can't find the link like other forums I'm on????

[Maurice Bedard]

PM is not enabled on this forum..................too many spammers.

If the lender is on the FHA approved list at www.fha.gov then you can post the link to the page here on the forum.

[Leigh]

So do the fees get written into the loan? Sorry new to this... This is from FHA's site:

The loan amount (including the 3 percent UFMIP) for the new H4H loan cannot exceed 90 percent of the current appraised value of the property.


So the 3% up front mortgage ins becomes part of the 90% and written into the loan? Basically, how much cash do we need to come up with? For us it would reduce our mortgage potentially several hundred thousand, if the lenders forgave the debt. Also will the forgiven debt be taxable? Thanks
Leigh

[garyys]

Mayela, I have had no response from them, two calls to them in two weeks and nothing. So I would hesitate to recommend them.

[garyys]

I have been reading conflicted reports of how many people are getting this loan done (a fox news report said 70 something, local paper said 38)? Talked to a second lender from the FHA list, they told me they are trying to do these loans but no investors want to fund them?

I contacted my lenders (Aurora, and EMC) they will not release the investor info to me for my current mortgage? I have been looking through the posts but cant find a simple way of finding out who the investor is (I think this would help me in my negotiations if I knew what footing the investor was standing on). Would this be something that could be gathered by a qualified written request? Any Ideas?

Another question,

If you close one of these loans and wait, say a year for the value of your home to decrease (yes decrease, I live in California) and manage to refinance into a new loan do you “split” any equity (if I remember this off the top of my head after 1 year 90% to FHA 10% to me) at that point. Then you are free and clear of the FHA restrictions and equity sharing for any future increases in value?


Thanks, Gary
>>

[Maurice Bedard]

garyys,

If you click on the link and look to the right there is a sheet with examples of the equity sharing..............all the info on this program and what is known is in those documents on the right side of the article.......
If you have additional questions about the program, FHA might be able to answer those questions...........

1-800-CALL-FHA (225-5342)

HOPE for Homeowners