Home Loans and Support

HOPE for Homeowners H4H

Discussion in 'Foreclosure Bail Out Loans' started by AmericanNightmare, Oct 3, 2008.

  1. AmericanNightmare

    AmericanNightmare LoanSafe Member

    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?
  2. cutlass

    cutlass LoanSafe Member

    I would like to know this too
  3. jennscrzy

    jennscrzy LoanSafe Member

    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 :(
  4. borclu

    borclu LoanSafe Member

    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...
  5. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    borclu,


    Have you tried asking Countrywide if they are offering the FHA program and if they are to see if you would qualify?
  6. Worried in Florida

    Worried in Florida LoanSafe Member

    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.
  7. borclu

    borclu LoanSafe Member

    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:(
  8. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    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..............
  9. borclu

    borclu LoanSafe Member

    Thank you. I will post the outcome.
  10. JoJoJodyJo

    JoJoJodyJo LoanSafe Member

    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!
  11. JoJoJodyJo

    JoJoJodyJo LoanSafe Member

    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.
  12. dwdrag

    dwdrag LoanSafe Member

    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.
  13. JoJoJodyJo

    JoJoJodyJo LoanSafe Member

    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.
  14. Worried in Florida

    Worried in Florida LoanSafe Member

    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.
  15. jet-a

    jet-a LoanSafe Member

    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!
  16. dwdrag

    dwdrag LoanSafe Member

    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.
  17. Worried in Florida

    Worried in Florida LoanSafe Member

    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
  18. Worried in Florida

    Worried in Florida LoanSafe Member

    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
  19. jet-a

    jet-a LoanSafe Member

    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!
  20. 2blessed2stress

    2blessed2stress LoanSafe Member

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

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