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April 29th, 2009

What about ‘Hope for Homeowners’?

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We last wrote about the Hope for Homeowners program (H4H) just over a month ago, when we noted that after five months, the $300 billion program had helped exactly one homeowner.

How has it done now that it’s been in action for six months? No progress:

The Treasury Department also is attempting to breathe new life into another government foreclosure prevention program, called Hope for Homeowners. That program, launched last year, refinances homeowners into more affordable mortgages. But lenders have balked at requirements that they cut some of the principal that borrowers owe. Only one homeowner has received a government-backed loan under the program so far.

H4H is the foreclosure-prevention program that’s supposed to encourage lenders to voluntarily write down the outstanding balance of mortgages held by homeowners having real trouble paying their loans. The government originally estimated that it could help up to 400,000 families, but now hopes for 25,000 over the next 10 years at a cost of $675 million.

The lenders can’t take all the blame; the program’s requirements are just too onerous, requiring, for example, that homeowners need to all but default on their loans if they want to participate. Treasury is trying to revamp the program, and we’ll let you know when that happens.

If you think you might be eligible for Hope for Homeowners, you should certainly go for it. Here’s a list of lenders participating in the program. Let us know how you make out.

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8 Responses to “What about ‘Hope for Homeowners’?”

  1. Mark Says: April 30th, 2009 at 12:17 pm

    While I technically didn’t qualify for H4H, I could have used the FHA Forward refi but neither mortgage broker I talked with returned with a quote or a plan. It seems like that since they can’t help me that they say nothing. Tell me the bad news! I can handle the truth!

  2. Paul Havemann Says: April 30th, 2009 at 3:48 pm

    Sadly, most government programs are too complicated to be really workable. In their defense, that’s because there’s already a lot of blowback about bailing out irresponsible borrowers. The result was that they went too far, and no one gets helped.

    Still, you shouldn’t give up with the FHA. Their program could help you, but the reason many brokers won’t bother is because there, too, it means a ton of paperwork.

  3. Patti Says: May 2nd, 2009 at 8:41 am

    I have spent a week trying to help my son who lives in Phoenix,AZ. He has an FHA loan owes about what it is worth (99,000.) I tried his lender GMAC who do not work with H4HP, but offered a streamlined refinancing. It would lower his monthly payment from $951 to $780 at a closing cost of almost $7,000 tacked onto his loan. He cannot afford this monthly payment.

    I then checked out several other lenders from the list of lenders participating in the program. All said it was a not goer and could offer nothing more than what GMAC offered. I also checked into NOVA, HARP, & HASP; no luck. My son is now going to have to let his home be repossessed. So much for
    hope for this homeowner.

  4. Tim Manni Says: May 4th, 2009 at 11:50 am

    Patti,

    We’re sorry to hear about your son’s situation. I think thousands of homeowners are unfortunately feeling as helpless as your son. Hope for Homeowners has been a let down at best. It’s a shame because it sounds like the new payment is both affordable and significantly lower (nearly $200), but the closing costs are way up there. If you’re struggling to make your monthly payments, what makes them think you can afford $7,000 in closing costs? I agree, there’s not much hope for homeowners out there.

    Thanks for commenting,
    Tim

  5. April Says: May 5th, 2009 at 4:30 pm

    After having my mortgage payment increase from $1050 to over $1700 per month due to the ARM mortgage, and the house not appraising for the loan amount, we almost lost our house. The day before the foreclosure sale date, we learned of the Hope 4 Homeowners program. We completed the massive amounts of paperwork. Waited and waited. Then had to fill it all out again because too much time had gone by. We were finally told we qualify for the program and we were just waiting on FHA to negotiate the new loan amount. Everything was looking good. Now, were being told that congress is currently meeting to address the Hope 4 Homeowners program. Now we wait again. The bank and FHA are waiting to see if it will be continued or what new “terms” are going to be placed on the program. So, still waiting. After reading that only one family has received the benefits of this program, I’m not getting my hopes up too high.

  6. Tim Manni Says: May 6th, 2009 at 1:12 pm

    Hi April,

    Sorry it has been about a day since you left your comment. See, one of the problems with Washington constantly changing, improving, switching (whatever you want to call it) their programs is that they don’t give them time to work. It sounds like you were on the cusp of benefiting from this program until it was changed (again). We’re sorry to hear that.

    Unfortunately I agree with you — I wouldn’t get your hopes up.

    Thanks for sharing your story, we hope to hear from you again soon,
    Tim (HSH)

  7. Chris Says: May 15th, 2009 at 8:54 pm

    I have found out through 2 applications that to get a loan modification you have to have anywhere from 2500.00 to 4000.00 cash upfront- if I had money like that, I would not be in a jam. Aren’t there any companies out there that are more reasonable?

  8. Tim Manni Says: May 18th, 2009 at 1:42 pm

    Chris,

    Great point! You said it perfectly! “if I had money like that, I would not be in a jam.”

    I think the cash is the lender’s incentive to start the process. That’s why I believe the White House has introduced the lender and borrower (monetary) incentives (which many disagree with) to encourage lenders to make these things happen.

    Keep doing your research. Your best bet will be to look as long as it takes to find someone who can do it for less.

    Good luck, and thanks for sharing your research,
    Tim

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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