One of the cornerstones of personal finances – home ownership, has become nearly synonymous with financial ruin in the past year or so. Home loans are at now record levels of default, and you can hardly drive down any street in any town and not see a for-sale sign that says foreclosure somewhere on it. The situation has reached a point where nearly everyone that has owned their house for less than 10 years are in total despair about how to keep their dreams alive.
A new program called “Hope for Homeowners Program,” legislated by Congress, came into effect on October 1, 2008 and will continue through September 30, 2011. This program offers hope to the millions of homeowners who are at risk of losing their homes.
The H4H program provides for the refinancing of homes through affordable mortgages so that those homeowners who are on the cusp of financial ruin can remain in their homes by entering into a 30-year fixed-rate loan with significantly lower payments.
According to the Federal Housing Administration, there are four ways you can participate in this program:
* Homeowners may contact their existing lender and/or a new lender to discuss how to qualify and discuss their eligibility for this program.
* Services working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a Hope for Homeowners loan.
* Originating lenders who are looking for ways to refinance potential customers out from under their high-cost loans and/or who are willing to work with servicers to assist distressed homeowners.
* Counselors who are working with troubled homeowners and their lenders to reach a mutually agreeable solution for avoiding foreclosure.
The primary way homeowners will initially participate in this program is through the servicing lender on their existing mortgage. Servicers that do not have an underwriting component to their mortgage operations will partner with an FHA-approved lender that does. For those living in Denver, you may want to check Denver home mortgage for help in finding an appropriate way to take advantage of this program.
How does this work? Basically, the lender would write a mortgage with an appraised value of up to 90%. The FHA appraiser would re-appraise your home and then the discounted amount would be paid by the government. Ultimately, the mortgage would become a 30-year fixed rate mortgage. Besides being able to remain in your home, you will receive 10% equity in your home as well. In addition, you would not incur any penalties or late fees.
To find out if you qualify, you can go to the FHA website at: http://portal.hud.gov/portal/page?_pageid=73,7601299&_dad=portal&_schema=PORTAL
Research this program on the website given. Then decide if you are willing to concede to government intervention in order to save your home.
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