Foreclosure Help
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FHA Hope for Homeowners, with a download spreadsheet of lenders, contact names and numbers.
Federal housing officials have compiled a list of lenders participating in the HOPE for Homeowners program, which they say could help as many as 400,000 homeowners avoid foreclosure by refinancing problem loans into new 30-year fixed-rate mortgages insured by the Federal Housing Administration.
When released by the Department of Housing and Urban Development Thursday, the list of participating lenders totaled 67 businesses. But HUD said the list will be updated as new lenders enroll in the HOPE for Homeowners program, which kicked off Oct. 1.
Borrowers who hope to refinance into an FHA-guaranteed loan under the HOPE for Homeowners program need the cooperation of their existing lender or loan servicer, as the program will only provide loans equal to 90 percent of a home’s current appraised value.
The holder of the existing mortgage may choose to foreclose on a troubled borrower or offer them a workout or loan modification rather than accept the losses associated with declining property values, HUD acknowledges.
When contacting any of the HOPE for Homeowners lenders on the list, borrowers “are strongly encouraged to contact your servicing lender and any subordinate lien holders since their participation is vital for you to refinance into a HOPE for Homeowners mortgage,” HUD advised.
Hi Charles,
Great question. Surprisingly, the 2nd lien holder has the most motivation, because in foreclosure they usually walk away with nothing. In a short sale, or work-out, they at least get partial repayment. We’ve found sometimes with the loans being sold and re-sold for pennies on the dollar that the note holder is really only holding a fraction of the original principal.
What incentive does a second mortgage holder have to go along with this? Why wouldn’t they just refuse and wait for foreclosure? With this they have to wait until you finally sell your home which could be many years down the road. They don’t get to write off interest lost or even get paid on the note. I think if they lent over the value of the home, eg. 125% loan, they should be able to write-off that amount, and each year write off uncollected interest, then maybe after 10 years they would be able to turn in the certificate and write the remainder of the note off and release the lien. Of course they would have to argee not to report the consumer as charged-off or delinquent at all, but they shold not report as “good pay” because it wouldn’t be true either. Maybe they sould be enjoined from reporting it at all. Let me know what you think!
Now, this almost negligible risk for lenders are transformed into reduced interest rate for borrowers. Mortgage Refinance